Balkrishna Paper Mills Limited has informed the Exchange about Adoption of new line(s) of business
BALKRISHNA · price
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Balkrishna Paper Mills Limited's Board has approved diversification into real estate development and allied activities, including residential and commercial projects. The company aims to strategically utilize and monetize its existing land assets through this move. Additionally, the Board approved availing Inter Corporate Deposits (ICDs) from two related parties – S P Finance and Trading Limited and Sanchna Trading and Finance Limited – up to Rs. 25 crore each per year for FY 2026-27 and FY 2027-28 (totaling Rs. 100 crore over two years). The company disclosed that it has incurred losses in the preceding three years and has negative net worth, making these ICD transactions material related party transactions exceeding 10% of annual turnover. The deposits carry interest of up to 12% per annum and are unsecured.
This diversification into real estate signals a strategic pivot for the loss-making paper manufacturer, potentially creating long-term value through land monetization. However, the reliance on related party funding amid negative net worth may raise concerns about financial risk and governance for existing shareholders.