Neopolitan Pizza Temporarily Diverts ₹207.96 Lakh from Capex to Working Capital Amidst Expansion Push; No Change in IPO Objectives
By Shishta Dutta | Published at: Jul 10, 2025 10:46 AM IST
Mumbai, 10 July 2025: Neopolitan Pizza and Foods Limited (BSE: 544269) has announced a temporary reallocation of ₹207.96 lakh from its capital expenditure (Capex) plan to working capital needs for the half year ending March 31, 2025. The update was shared in its latest disclosure filed under Regulation 32 of the SEBI (LODR) Regulations, 2015. The company clarified that while the funds were diverted from their original purpose, there is no change in the objectives laid out in its IPO prospectus dated 24 September 2024.
Interim Shift in Fund Usage to Address Immediate Liquidity Needs
The company’s revised allocation reveals a strategic shift to ensure short-term liquidity. The ₹207.96 lakh, initially designated for opening 16 new QSR outlets, has instead been used to meet growing working capital demands. This move, Neopolitan Pizza confirmed, is provisional and intended to support daily operations without affecting its long-term expansion plan.
Revised Fund Allocation Shows Surplus Working Capital Usage
| Original Purpose | Original Allocation (₹ lakh) | Modified Allocation (₹ lakh) | Utilized (₹ lakh) | Deviation (₹ lakh) | Remarks |
|---|---|---|---|---|---|
| Expansion of 16 New QSR Outlets | 708.00 | — | 200.04 | -207.96 | Balance held in Fixed Deposit |
| Security Deposit and Advances Rent | 26.00 | — | 26.00 | — | — |
| Brokerage Charges | 13.00 | — | 13.00 | — | — |
| Working Capital Requirements | 352.00 | — | 559.96 | +207.96 | — |
| General Corporate Purposes | 71.00 | — | 71.00 | — | — |
Audit Committee Recommends Prompt Action as Auditors Flag Overutilisation
The Audit Committee acknowledged the interim change and instructed the management to implement timely corrective steps. While reiterating that the company remains aligned with IPO objectives, the committee stressed on restoring the original allocation when possible.
Statutory auditors, while validating the full utilisation of IPO proceeds (net of issue expenses), drew attention to the ₹207.96 lakh additional use under working capital, deviating from the IPO’s stated disclosure.
IPO Funds Fully Utilised; No Change in Stated Objectives
-
Mode of Fund Raising: Public Issue
- Fund Raised: ₹1,170 lakh (Net of issue expenses)
- Date of Allotment: October 7, 2024
- Monitoring Agency: Not applicable
- Shareholder Approval for Deviation: Not required, as objects remain unchanged.
Operational Adjustment Made to Support Ongoing Business Expansion
Neopolitan Pizza clarified that the shift in fund usage does not reflect a deviation from its IPO terms but rather an operational decision to ensure business continuity. The company intends to restore the funds toward Capex as and when liquidity permits. The reallocation continues to support the broader mission of sustainable growth.
Company Overview
Neopolitan Pizza and Foods Limited, listed on the Bombay Stock Exchange, is a Gujarat-based quick service restaurant (QSR) brand with aggressive nationwide expansion goals. Operating through a mix of franchise and company-owned models, the brand made its stock market debut in October 2024 and is using its raised capital to boost reach in India’s organised food service sector.
REF: https://www.bseindia.com/xml-data/corpfiling/AttachLive/c37cb044-02af-4e17-8ae9-130700dc8215.pdf
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