Popular Vehicles and Services Limited has informed the Exchange about Giving guarantees/indemnity/ becoming a surety for third party
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Popular Vehicles and Services Limited has extended a corporate guarantee of Rs. 15 crores in favour of Axis Bank for its wholly owned subsidiary, Popular Mega Motors (India) Private Limited. The guarantee covers two inventory funding facilities for TATA Commercial Vehicles: a renewed Rs. 7 crore facility for Kerala operations and an enhanced facility for Tamil Nadu, raised from Rs. 3 crore to Rs. 8 crore. The transaction has been carried out at arm's length, and no promoter, promoter group member, or director has any interest in it. The company has stated that there is no material impact on it beyond the standard disclosure requirement in its financial statements.
This is a routine support measure for the company's subsidiary to secure working capital for its TATA CV dealerships, so there is no direct effect on shareholders. However, it does raise the company's contingent liability by Rs. 15 crores on a consolidated basis.