Board approves corporate guarantee for subsidiary's ₹30.00 crore credit facilities and deed of indemnity

Corporate guarantee approved in favour of Bank of Baroda for credit facilities aggregating to ₹30.00 crore sanctioned to Solapur Bioenergy Systems Private Limited, a wholly owned subsidiary.

Mon 12 Oct 2026

Corporate Guarantee Amount

₹30.00 crore

Underlying Projects Aggregate Contract Value

approximately ₹101.55 crore

Aggregate EPC Performance Security

approximately ₹10.80 crore

Corporate guarantee for a wholly owned subsidiary

The Board, at its meeting on October 12, 2026, approved providing a corporate guarantee in favour of Bank of Baroda in connection with credit facilities aggregating to ₹30.00 crore sanctioned to Solapur Bioenergy Systems Private Limited (SBESPL), a wholly owned subsidiary of the Company.

How the facilities are split

• Working Capital Demand Loan/Overdraft for the Raipur BPCL project: ₹9.50 crore
• Working Capital Demand Loan/Overdraft for the Mysuru BPCL project: ₹9.50 crore
• Overdraft for existing business: ₹1.00 crore
• Bank Guarantee facility for BPCL projects: ₹10.00 crore

In simple terms, the subsidiary is the borrower and the parent company stands behind that borrowing. The guarantee is to secure SBESPL's obligations to the extent and in the manner specified in the guarantee documents.

What the update says about the impact

• The guarantee creates a contingent financial exposure for the Company.
• If SBESPL defaults and the guarantee is invoked, the Company may be required to discharge the guaranteed obligations in accordance with the guarantee terms.
• The facility is intended to support the subsidiary's working capital and project execution requirements.

Deed of indemnity for insurance surety bonds

The Board also approved execution of a Deed of Indemnity in favour of Kiwi General Insurance Limited, in connection with Insurance Surety Bonds issued or proposed to be issued on behalf of SBESPL for meeting the performance-security requirements of its project contracts. SBESPL is the beneficiary of the underlying Insurance Surety Bond arrangement.

The underlying projects

• Mysuru CBG project and Raipur CBG project awarded by Bharat Petroleum Corporation Limited (BPCL)
• Gorakhpur project, for which a work order has been received from Indian Oil Corporation Limited (IOCL)

Aggregate contract value: approximately ₹101.55 crore, including GST, as set out in the Board papers.

Aggregate EPC performance security: approximately ₹10.80 crore.

What the update says about the impact

• The indemnity creates a contingent financial exposure for the Company.
• If a claim is made under the Insurance Surety Bonds and the indemnity is invoked, the Company may be required to discharge its obligations in accordance with the deed.
• The arrangement is expected to help SBESPL preserve working capital and cash flow for project execution.

Promoter interest and arm's length

Mr. Sarang Bhand, Promoter and Managing Director of the Company, is also Promoter Director of SBESPL and is interested in the proposed transactions to that extent. The update states the proposed transactions are done at arm's length.

How to read this

Both items are contingent in nature. They are not a direct cash outflow today, but they are obligations that could crystallise if the subsidiary's projects ran into trouble. At the same time, the credit facilities and the surety bonds are tied to named projects for BPCL and IOCL, and the stated purpose is to fund the subsidiary's working capital and support project execution.

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