KRN Heat Exchanger and Refrigeration Limited has informed the Exchange about1. Approved the Modification/Amendment in the loan agreement dated 15th April, 2023executed with KRN HVAC Products Private Limited ( KRN HVAC ) a wholly ownedsubsidiary Company of the Company. (Annexure I)2. Approved the execution of loan agreement dated 12th January, 2026 with ThermotechResearch Laboratory Private Limited ( TRL ) a wholly owned subsidiary Company of theCompany to grant an unsecured loan of Rs. 10,00,00,000/- (Rs. Ten Crores only) in oneor more tranches. (Annexure II)3. Approved the KRN Employee Stock Option Plan 2026 ( ESOP Plan ) in accordancewith the Securities and Exchange Board of India (Share Based Employee Benefits andSweat Equity) Regulations, 2021, Subject to the approval of the members of thecompany. (Annexure III)
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KRN Heat Exchanger's board, at its January 12, 2026 meeting, approved three items. First, it amended an existing Rs. 100 Crore unsecured loan to its wholly owned subsidiary KRN HVAC Products (outstanding Rs. 99.94 Crore), inserting a clause allowing the company to convert the loan into equity shares of the borrower at its discretion. Second, it approved a new unsecured loan of Rs. 10 Crore to another wholly owned subsidiary, Thermotech Research Laboratory (TRL), at 12% interest for up to 12 months to fund working capital needs. Third, it approved the KRN Employee Stock Option Plan 2026, allowing up to 6,00,000 stock options (convertible into 6 lakh equity shares of Rs. 10 face value), subject to shareholder approval.
The Rs. 10 Crore outflow to a subsidiary is small relative to the company's size but signals continued capital support for group entities. The KRN HVAC loan-to-equity conversion clause gives the company flexibility to take equity stakes in the subsidiary, which could dilute minority perceptions if exercised. The ESOP plan may cause modest future equity dilution but is aimed at retaining talent.