Nityas Gems had 97% cash-credit use backed by property

Nityas Gems and Jewellery Limited had Rs 13.12 crore outstanding under a Rs 13.58 crore cash-credit facility on August 31, 2026, using 96.59% of the sanctioned limit. Nityas Gems secured the revolving working-capital facility with charges over company assets, specified Surat property and personal guarantees from three named individuals.

How much of Nityas Gems’ cash-credit limit was in use?

Nityas Gems had used 96.59% of its cash-credit limit as of August 31, 2026. The company disclosed Rs 13.12 crore outstanding against a sanctioned limit of Rs 13.58 crore, leaving Rs 46.30 lakh of the facility undrawn at that date. Cash credit is a revolving bank facility that permits borrowing up to a sanctioned limit, subject to the lender’s terms.

Nityas Gems’ cash credit accounted for 98.50% of its Rs 13.31 crore total fund-based borrowings outstanding on August 31, 2026. The remaining Rs 19.50 lakh was outstanding under a term loan, against a sanctioned term-loan amount of Rs 25 lakh. The indebtedness table listed Rs 13.83 crore of sanctioned fund-based facilities, comprising the cash credit and term loan.

The August 31, 2026 disclosure shows that funded bank borrowing was concentrated in working capital rather than the term loan. Nityas Gems stated that it had availed credit facilities in the ordinary course for working-capital and other business requirements, but the filing does not assign the Rs 13.12 crore cash-credit draw to a specific inventory purchase, expansion project or operating expense.

What security backs Nityas Gems’ cash-credit facility?

Nityas Gems’ cash-credit facility is secured by operating assets and mortgage security over specified Surat properties. The filing lists an exclusive hypothecation charge over movable fixed assets, stock and book debts, as well as a charge over the company’s present and future current assets and movable fixed assets. Hypothecation gives a lender a security interest in assets while the borrower retains possession.

The disclosed mortgage security includes floors 5, 6 and 7 of Rathi House at Katargam in Surat, owned by Rajnikant Lallubhai Chanchad. The working-capital disclosure also refers to floor 4 of Rathi House as security. The term-loan table identifies floor 4 as owned by Sonalben Rajnikant Chanchad, while the working-capital table identifies a floor 4 property as owned by Rajnikant Lallubhai Chanchad, creating different ownership descriptions across the facility tables.

Nityas Gems also disclosed personal guarantees from Sonalben Rajnikant Chanchad, Rajnikant Lallubhai Chanchad and Raj Dineshbhai Monpara in the working-capital security terms. The Rs 13.12 crore balance therefore relied on the company’s charged stock, receivables and fixed assets, together with the stated property mortgages and guarantees, remaining available under the lender’s documentation.

What are the repayment and interest terms?

Nityas Gems’ cash credit is repayable on demand and carried a disclosed current interest rate of 8.00%, comprising the Repo Rate plus 2.75%. The facility requires monthly interest servicing, is revolving in nature and has 12 months’ availability subject to annual review. The availability period means continued access depends on the lender’s review rather than on a fixed long-term repayment schedule.

The working-capital documentation also lists a Rs 9.25 crore working-capital demand-loan sub-limit, a Rs 5 crore export packing-credit foreign-currency sub-limit and a Rs 5 crore post-shipment-credit foreign or Indian-rupee sub-limit. Each had nil outstanding on August 31, 2026. As the filing describes them as cash-credit sub-limits, they are not separate capacity to be added to the Rs 13.58 crore cash-credit limit.

The financing terms permit prepayment charges of up to 2% in specified circumstances. Nityas Gems also disclosed penal charges of 2% on average facility utilisation, payable monthly during non-compliance with certain obligations; default charges of 2% on overdue amounts; and a possible 18% default interest rate if facilities continue to be used after their limits expire.

How does the August 2026 debt snapshot compare with Fiscal 2026?

Nityas Gems reported Rs 23.42 crore of total borrowings and Rs 79.43 crore of total equity in its Fiscal 2026 capitalisation statement. Total borrowings were therefore 0.29 times total equity, while Rs 12.88 crore of long-term borrowings equalled 0.16 times total equity. Fiscal 2026 refers to the 12 months ended March 31, 2026.

The Rs 13.31 crore August 31, 2026 fund-based borrowing figure is not directly comparable with the Rs 23.42 crore Fiscal 2026 total-borrowings figure because the disclosures use different dates and classifications. The Fiscal 2026 statement included Rs 10.54 crore of short-term borrowings and Rs 12.88 crore of long-term borrowings, including current maturities of long-term borrowings and non-current lease liabilities. The August table instead identified secured term-loan and working-capital facilities.

The difference in definitions matters because the August 31 table did not present a non-fund-based borrowing balance, whereas the Fiscal 2026 capitalisation statement included borrowing categories under Schedule III of the Companies Act, 2013. Nityas Gems’ cash-credit utilisation therefore measures use of a particular working-capital facility, not a complete change in consolidated debt between March 31, 2026 and August 31, 2026.

Which lender conditions could affect Nityas Gems’ funding?

Nityas Gems requires prior written consent from YES Bank Limited, referred to as YBL in the filing, before undertaking specified financing actions. The restrictive covenants cover additional secured or unsecured borrowing from banks or financial institutions, except certain auto, vehicle or equipment loans, and the issue of financial bank guarantees for financial institutions unless explicitly approved.

Nityas Gems must also route turnover through accounts maintained with YBL and maintain existing adjusted tangible net worth, or ATNW, during the facilities’ currency. The filing describes ATNW as adjusted for loans and advances to and from group or associated companies. It also requires unsecured loans and related interest treated as quasi-equity to be subordinated to YBL loans.

The stated events of default include diversion of funds, delayed creation or perfection of security, and breaches or delays involving financial, non-financial or information covenants. A default by Nityas Gems, its subsidiary, group companies or affiliates on other YES Bank facilities may also be treated as a default under this facility. In such circumstances, the lender has the stated right to invoke security or credit held with the anchor company to settle dues.

Conclusion

Nityas Gems’ August 31, 2026 indebtedness disclosure indicates that its funded bank borrowing was concentrated in a single working-capital line. The Rs 13.12 crore cash-credit balance used 96.59% of the Rs 13.58 crore limit and represented 98.50% of the Rs 13.31 crore reported fund-based borrowing balance. The facility’s security combined charges over operating assets with specified Rathi House property and named personal guarantees.

The next disclosed point to watch is the annual review of the 12-month revolving facility and continued compliance with YBL conditions on turnover routing, security, ATNW and additional finance. Nityas Gems stated that it had obtained required loan-agreement consents for issue-related activities, while its post-issue capitalisation data had not been determined pending completion of the public issue.