BirlaNu Limited has informed the Exchange about Giving guarantees/indemnity/ becoming a surety for third party
BIRLANU · price
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BirlaNu Limited has issued a Stand-by Letter of Credit (SBLC) of EUR 10.73 million (approximately ₹100+ crore) in favour of ICICI Bank UK PLC's Germany branch to secure working capital demand loan facilities for its wholly-owned German subsidiary, BirlaNu International GmbH. The SBLC has a 12-month validity and is part of the enhanced corporate guarantee limit from EUR 35 million to EUR 45 million approved by the Board in May 2025. The subsidiary will pay a service fee of 0.53% per annum to BirlaNu, and the parent must maintain 1.25 times security cover on its property for the facility's tenure. In case of default by the subsidiary, ICICI Bank can invoke the charge on BirlaNu's assets up to the full SBLC amount.
This is a routine corporate guarantee for a wholly-owned subsidiary, but it creates a contingent liability of about ₹100+ crore on BirlaNu's books. The risk is manageable since the subsidiary pays a service fee and the exposure is within the pre-approved Board limit, but shareholders should monitor the subsidiary's performance and any future defaults that could trigger invocation of the guarantee.