Company Has Rs 125.01 Crore Lines, Mostly Non-Fund

Company had Rs 125.01 crore of sanctioned banking facilities as of August 3, 2026, but only Rs 5.309 crore was outstanding. Rs 90 crore, or about 72% of the total, was allocated to letters of credit and bank guarantees, indicating that Company’s bank lines were chiefly intended for procurement, contract execution and statutory obligations rather than funded borrowing.

How much of Company’s Rs 125.01 crore bank capacity was drawn?

Company had drawn Rs 5.309 crore of its Rs 125.01 crore sanctioned facilities on August 3, 2026, equal to about 4.25% of total capacity. The entire outstanding amount was under the Rs 30 crore secured cash-credit facility, while the overdraft, letter-of-credit and bank-guarantee, and derivative facilities had no reported outstanding balance.

A sanctioned facility is a lender-approved limit, while an outstanding amount is the portion used on a specified date. Company’s Rs 125.01 crore total therefore does not represent funded debt alone, because it includes facilities for contingent instruments and hedging. The August 3, 2026 schedule included Rs 90 crore of letters of credit and bank guarantees and Rs 5 crore of derivative capacity that were undrawn.

The difference of Rs 119.701 crore between sanctioned capacity and outstanding amounts is not all available cash borrowing. Of that total, Rs 90 crore was designated for letters of credit and bank guarantees, and Rs 5 crore was for derivative instruments. The principal disclosed funded working-capital line was the Rs 30 crore cash-credit facility.

Why are most of Company’s bank lines non-fund facilities?

Company’s Rs 90 crore letter-of-credit and bank-guarantee limit was its largest facility category, accounting for about 72% of the Rs 125.01 crore sanctioned total. A letter of credit supports payments to suppliers, while a bank guarantee supports an obligation to a beneficiary; neither necessarily results in an immediate funded borrowing shown as outstanding.

Company stated that letters of credit are available for procuring raw materials, consumables, stores, spares, tools and capital goods for normal capital expenditure. Bank guarantees can support bid bonds, security deposits, earnest money deposits, contract performance guarantees, advance payments and retention money. The disclosed uses also include customs, goods and services tax, electricity and insurance requirements.

The Rs 90 crore allocation is consistent with Company’s sole reportable business segment, Construction Activities, under Indian Accounting Standard 108, or Ind AS 108. Company reported that its Board of Directors collectively acts as chief operating decision maker and evaluates the segment’s performance through profit and loss. The facility mix indicates that its banking arrangements support procurement and contract-related requirements within that segment.

Company also had a Rs 5 crore secured derivative facility, with no reported use on August 3, 2026. The facility may be used with ICICI Bank Limited for forward contracts, swaps, options or other derivative instruments to hedge interest-rate risk or Indian rupee risk. Its tenor is valid for up to 12 months from the date of the relevant deal.

What funded working-capital borrowing does Company have?

Company’s main funded working-capital facility was a Rs 30 crore secured cash-credit line from ICICI Bank Limited, of which Rs 5.309 crore was outstanding on August 3, 2026. Cash credit is a revolving facility used to finance working-capital requirements, and Company disclosed that this line remains valid until July 28, 2027.

Interest on the cash-credit facility is charged at the applicable repo rate plus a spread and any applicable statutory levy, calculated daily on outstanding principal. The repo rate is the rate published by the Reserve Bank of India, or RBI, as the repo or policy repo rate. Company disclosed a 5.25% repo rate and a 2.75% spread as of the prospectus date, equalling 8% before any statutory levy.

The cash-credit line requires fixed-deposit collateral equal to 40% of the entire exposure, to be created upfront. Company must also create security over current assets upfront and complete security perfection within 90 days from security creation. The ability to use the Rs 30 crore line therefore depends on its validity through July 28, 2027 and compliance with these collateral and security conditions.

Company also had a Rs 0.01 crore secured overdraft facility from Bank of India for working-capital requirements. The facility was sanctioned and disbursed on May 2, 2025, carries interest at 1% above the applicable fixed-deposit rate, and is secured by a term deposit receipt. No amount was outstanding under the overdraft on August 3, 2026.

How do Company’s facilities compare with reported borrowings?

Company’s Rs 125.01 crore facility total on August 3, 2026 was larger than its Rs 6.682 crore reported borrowings on March 31, 2026 because the two disclosures measure different items. The March 31 capitalisation statement measured accounting borrowings, while the August 3 facility schedule included sanctioned limits for letters of credit, guarantees and derivatives that had no reported outstanding amount.

At March 31, 2026, Company reported Rs 4.736 crore of non-current borrowings and Rs 1.946 crore of current borrowings, totalling Rs 6.682 crore. Total equity was Rs 259.884 crore, comprising Rs 16.927 crore of equity share capital and Rs 242.957 crore of other equity. Non-current borrowings were 0.02 times total equity and total borrowings were 0.03 times total equity.

The Rs 5.309 crore cash-credit balance reported on August 3, 2026 should not be treated as a direct comparison with the Rs 6.682 crore total-borrowings figure at March 31, 2026. The earlier amount includes current and non-current accounting classifications, whereas the later amount records facility utilisation at a later date. The disclosures distinguish recorded debt from approved capacity for working capital, contractual support and hedging.

Company disclosed a uniform 1.15% commission for bank guarantees and letters of credit, subject to a minimum of Rs 1,000 for each instrument. Financial and performance guarantees are limited to a maximum tenor of 30 months, including the claim period. Company also stated that financing documents may contain additional terms and requirements and identified compliance with repayment and other covenants as a financing risk.

Conclusion

Company’s Rs 125.01 crore banking arrangement was primarily an operational-support structure rather than a funded-debt measure on August 3, 2026. Rs 90 crore was sanctioned for letters of credit and bank guarantees, while the only reported outstanding balance of Rs 5.309 crore was under the Rs 30 crore cash-credit facility.

The next disclosed date to watch is July 28, 2027, when Company’s cash-credit facility is valid through. Future use of the Rs 90 crore non-fund limit, the Rs 5 crore derivative facility and the cash-credit line will depend on procurement, guarantees, hedging needs and compliance with fixed-deposit collateral, current-asset security and other financing-document conditions.