REL has provided corporate guarantee to its associate entity Energy in Motion Limited
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Ravindra Energy Limited (REL) has provided a corporate guarantee of INR 135 Crore to YES Bank Limited on behalf of its associate entity Energy In Motion Limited (EIM), in which REL holds a 49.50% equity stake. YES Bank has sanctioned a total credit facility of INR 296 Crore plus a hedge facility of INR 32 Crore to EIM, of which REL is guaranteeing INR 135 Crore. The guarantee was approved by REL's board on May 27, 2025 and by shareholders at the EGM on June 20, 2025, and is described as being done at arm's length. Promoter Narendra Murkumbi is a common director in both REL and EIM. REL describes the guarantee as a non-fund based contingent liability with no immediate financial impact on the company, noting EIM has paid-up capital of Rs. 100 Crores and its own financial resources.
This is a contingent liability rather than a direct debt obligation, so it does not immediately affect REL's balance sheet, but it does expose REL to potential financial risk if EIM defaults on the guaranteed amount. Shareholders should monitor EIM's business performance as the guarantee is significant relative to REL's own size and could become a real liability in adverse scenarios.