ISGEC Heavy Engineering has announced the sale of equity shares in its joint venture company, Isgec SFW Boilers Private Limited, resulting in a change in the subsidiary's status. Pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the company entered into an agreement with Sumitomo SHI FW Energia OY on May 08, 2026, to divest a 25% stake in the joint venture. The disclosure was made in accordance with SEBI Circular No. H0/49/14/14(7)2025-CFDDPOD2/1/3762/2026 dated January 30, 2026, and has also been published on the company's official website.

Transaction Details

The transaction involves the sale of 5,00,000 equity shares, representing 25% of the paid-up capital of Isgec SFW Boilers Private Limited. Currently, ISGEC Heavy Engineering holds 51% and Sumitomo SHI FW Energia OY holds 49% of the joint venture. Following completion of the sale, ISGEC Heavy Engineering's shareholding will reduce to 26%, while Sumitomo SHI FW Energia OY will become the majority stakeholder. The joint venture company will consequently cease to be a subsidiary of ISGEC Heavy Engineering and will be reclassified as an associate company. Notably, the joint venture arrangement between the two partners will continue post-transaction.

Key transaction parameters are summarised below:

Buyer Profile and Transaction Nature

The buyer, Sumitomo SHI FW Energia OY, is the existing joint venture partner and does not belong to the promoter or promoter group of the listed entity. The transaction does not fall under related party transactions and is not classified as a slump sale. The sale is also outside any Scheme of Arrangement, making the related regulatory provisions not applicable.

Financial Impact of the Joint Venture

For the financial year ended March 31, 2025, Isgec SFW Boilers Private Limited contributed the following to the consolidated financial statements of ISGEC Heavy Engineering. The consolidated annual financial statements for the financial year 2025-26 are yet to be finalized and approved by the Board of Directors; hence, data for the financial year ended March 31, 2025, has been disclosed for reference.

The board of directors of ISGEC Heavy Engineering Limited has approved the issuance of guarantees, counter guarantees, standby letters of credit (SBLs) and bonds through the company's bankers for an aggregate amount not exceeding USD 1.1957 million (approximately Rs. 11.23 crores) in favour of the bankers of its wholly owned subsidiary, Isgec Eswatini (Proprietary) Limited, Eswatini. The decision was taken at the board meeting held on May 01, 2026, through video conferencing at the deemed venue located at A-4, Sector-24, Noida-201301, Uttar Pradesh, India.

Board Meeting Details

The board meeting commenced at 11:00 a.m. and concluded at 12:30 p.m. on May 01, 2026. The approval was granted pursuant to Regulation 30 and other applicable provisions of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. The detailed disclosure as required under Regulation 30 read with SEBI Master Circular No. SEBI/HO/49/14/14(7)2025-CFD-POD2/1/3762/2026 dated January 30, 2026, has been provided.

Transaction Details

The regulatory disclosure reveals comprehensive details about the guarantee arrangement for the wholly owned subsidiary. These arrangements will enable the subsidiary's bankers to issue performance bank guarantees and other bank guarantees or bonds in favour of the authorities and customers of Isgec Eswatini (Proprietary) Limited. The company has confirmed that this transaction is being conducted on an arm's length basis.

Purpose and Impact

According to the official disclosure, this will facilitate the wholly owned subsidiary in furnishing, through its bankers, counter bank guarantees, performance guarantees, and bonds in favour of its customers and the customs authorities of Eswatini for execution of its existing orders. The company confirmed that the promoter, promoter group, and group companies have no interest in this transaction, and the same is being done at arm's length.

Regulatory Compliance

The intimation regarding this board meeting outcome has been published on the company's website at www.isgec.com . The disclosure was signed by Kalyan Ghosh, Chief Legal Officer & Compliance Officer, with membership number A10790. The company has provided comprehensive regulatory disclosures as mandated under SEBI regulations for such transactions involving subsidiary guarantees.