Qualiance borrowings are dominated by on-demand export debt

Qualiance International Limited reported Rs 28.37 crore of secured borrowings at March 31, 2026, of which Rs 22.49 crore, or 79.3%, was short-term. Qualiance’s short-term debt was primarily Bank of Baroda export working-capital funding repayable on demand, secured by company assets and personal guarantees from promoter family members.

How are Qualiance borrowings dominated by on-demand export debt?

Qualiance’s secured borrowing profile was weighted toward short-term facilities, which accounted for Rs 22.49 crore of the Rs 28.37 crore total at March 31, 2026. Long-term borrowings, including current maturities of long-term debt, were Rs 5.88 crore, leaving 20.7% of the secured total in the longer-term category.

The two largest short-term balances were Bank of Baroda export facilities: Rs 13.82 crore under Export Packing Credit, or EPC, and Rs 8.44 crore under post-shipment Foreign Bills Discounting, or FBD. EPC is working-capital funding for goods before shipment, while FBD is funding against export bills after shipment. Together, these balances were Rs 22.26 crore, or 99.0% of Qualiance’s short-term borrowings.

A separate unsecured loan from Krupa Rajesh Badani was Rs 12.85 lakh at March 31, 2026, bearing 10% interest and repayable on demand. The indebtedness statement presents that amount outside the Rs 28.37 crore total for secured long-term and short-term borrowings. The distinction means the reported secured total does not encompass every loan balance disclosed in the statement.

Why do Qualiance’s on-demand export facilities matter?

Qualiance’s main export facilities did not have a stated instalment schedule because they were repayable on demand. Bank of Baroda reported Rs 8.44 crore outstanding under its post-shipment FBD facility and Rs 13.82 crore under its EPC sub-limit at March 31, 2026, both with on-demand repayment terms.

The Bank of Baroda post-shipment FBD facility had a sanctioned amount of Rs 30 crore and a stated interest rate of 8.25% a year, calculated as Baroda Repo Linked Lending Rate, or BRLLR, plus 0.35 percentage point. The source listed BRLLR at 7.90% on the relevant sanction date. The Rs 30 crore EPC facility was described as a sub-limit of the FBD facility, so the sanctioned amounts are not separate facilities that can be added to calculate total capacity.

CSB Bank Ltd also disclosed a Rs 6.50 crore EPC facility, including a Rs 6.50 crore post-shipment FBD sub-limit and a Rs 1 crore cash-credit sub-limit. These CSB Bank facilities were repayable on demand at a stated rate of 8.50%, calculated as the Repo Rate plus 3.25 percentage points. Rs 23.38 lakh was outstanding in the CSB Bank FBD line, while no balance was shown in its EPC and cash-credit sub-limits.

The reliance on export working capital corresponds with Qualiance’s sales mix. Exports accounted for 98.82% of revenue from operations in FY 2025-26, compared with 93.87% in FY 2024-25 and 87.77% in FY 2023-24. Continued use of on-demand export funding therefore depends on the company’s export shipment, receivable and collection cycle continuing to support the facilities.

What collateral and guarantees support Bank of Baroda borrowing?

Bank of Baroda’s facilities are supported by company property, operating assets and three personal guarantees. The disclosure states that all Bank of Baroda credit facilities carry personal guarantees from Vipul Badani, Krupa Badani and Bhoomin Badani, including the Rs 22.26 crore of outstanding EPC and FBD balances at March 31, 2026.

The stated security includes an equitable mortgage over Qualiance’s factory plot in Tirupur, Tamil Nadu, measuring 1,046.300 square metres. It also includes four company offices at Knox Plaza in Malad West, Mumbai: office numbers 405, 406, 407 and 206, with stated areas of 37.75, 49.30, 44.80 and 49.30 square metres, respectively.

Bank of Baroda also has hypothecation over Qualiance’s present and future plant and machinery, stock and book debts. Hypothecation is a lender’s security interest in an asset without transfer of possession. The security disclosure further lists Rs 4.80 crore of NCGTC coverage for a working-capital term loan sanctioned under the CGSE Scheme, alongside the mortgage, hypothecation and guarantee arrangements.

CSB Bank’s facilities have a narrower disclosed guarantee group: Vipul Badani and Krupa Badani. The statement also says all CSB Bank credit facilities have collateral security over immovable property owned by Qualiance. Its Rs 23.38 lakh FBD balance was small relative to the Rs 22.26 crore Bank of Baroda export-facility balance, but both lenders’ facilities rely on collateral and personal guarantees.

How does long-term debt differ from export working capital?

Qualiance’s Rs 5.88 crore long-term borrowing total was largely made up of a Rs 4.80 crore Bank of Baroda working-capital term loan outstanding at March 31, 2026. The loan had a 48-month repayment period ranging from January 2026 to December 2029, a 12-month moratorium and a BRLLR-linked rate stated as 7.90% at the relevant sanction date.

Other reported long-term balances included Rs 66.08 lakh under a Central Bank of India vehicle loan and Rs 41.50 lakh under a Bank of Baroda working-capital term loan. The Central Bank of India loan ran from January 2025 to December 2029, while the Bank of Baroda loan ran from January 2022 to December 2026. CSB Bank’s dropline overdraft had Rs 6,000 outstanding at March 31, 2026 against a sanctioned amount of Rs 2.85 crore.

The schedule listed an L&T Finance Limited working-capital facility sanctioned at Rs 4.90 crore, with a 120-month term from June 2024 to May 2034, but no outstanding amount at March 31, 2026. L&T Finance’s collateral was personal property owned by Vinup Badani, and Vipul Badani and Krupa Rajesh Badani were stated to be co-borrowers. This differs from Bank of Baroda’s disclosed package of company property, operating assets and three promoter guarantees.

What operating information affects Qualiance’s debt profile?

Qualiance’s higher operating scale coincided with higher finance costs in FY 2025-26. Revenue from operations increased to Rs 76.89 crore from Rs 53.07 crore in FY 2024-25, while finance costs rose to Rs 3.75 crore from Rs 2.82 crore. The ability to keep on-demand export funding aligned with the operating cycle depends on inventory procurement, production, shipment and collection of export receivables.

The company disclosed periodic reconciliations between bank stock statements and books, which are relevant because Bank of Baroda’s security includes stock and book debts. In December 2025, net sundry debtors were Rs 12.48 crore in the stock statement and Rs 21.47 crore in the books, a Rs 8.99 crore difference. At March 2026, the net-debtor difference was Rs 3.04 lakh.

Qualiance attributed the reconciliation differences to timing of bank advice, purchases finalised after stock-statement submission, raw material in transit and differing creditor definitions. The company said creditors submitted to banks relate to unpaid stock, whereas book creditors also include services. These disclosed mechanisms explain why reported collateral information sent to banks can differ from book values at particular reporting dates.

Conclusion

Qualiance’s secured borrowings at March 31, 2026 were principally short-term export working-capital facilities rather than amortising term loans. The Rs 22.49 crore short-term component was almost entirely represented by Bank of Baroda EPC and FBD balances, placing demand repayment terms, export receivables, company collateral and promoter guarantees at the centre of the debt profile.

The disclosed matters to watch are utilisation and repayment under Bank of Baroda’s Rs 30 crore FBD facility, the January 2026 to December 2029 repayment period for the Rs 4.80 crore working-capital term loan, and subsequent stock-statement reconciliations. The indebtedness statement does not disclose a new borrowing plan, while it confirms that Bank of Baroda and CSB Bank facilities continue to be supported by collateral and personal guarantees.