Star Paper Mills Limited secured working capital facilities aggregating ₹50 crore from UCO Bank through an agreement executed on September 10, 2026. The funding structure comprises ₹40 crore in fund-based facilities and ₹10 crore in non-fund-based facilities.

The company disclosed the transaction pursuant to Regulation 30 of the SEBI (LODR) Regulations, 2015. The facility is designed to support the firm’s operational liquidity requirements.

Facility Structure and Security

The agreement outlines a split between immediate cash availability and contingent credit lines. The fund-based component provides direct liquidity, while the non-fund-based portion typically covers guarantees or letters of credit.

To secure the loan, Star Paper Mills provided a charge over its current assets via hypothecation. Additionally, the company offered a mortgage of fixed assets by depositing title deeds.

Transaction Details

The disclosure confirms that no amount has been disbursed as of the filing date. The company stated that no promoter, promoter group, group companies, directors, or key managerial personnel have any interest in this transaction. There are no nominee directors on the board arising from this agreement, nor are there any potential conflicts of interest disclosed.

Saurabh Arora, Company Secretary, signed the intimation letter addressed to the National Stock Exchange and the Bombay Stock Exchange.

Star Paper Mills reported a ₹32.75 crore net profit for the financial year ended March 31, 2026, down from ₹41.14 crore in the previous year. Revenue from operations declined to ₹4,099.4 crore, compared to ₹4,363.4 crore in FY25.

The Board of Directors recommended a final dividend of ₹2.50 per equity share (25%), subject to shareholder approval at the upcoming Annual General Meeting.

Financial Performance

Revenue from operations fell by approximately 6% year-on-year, reflecting subdued market conditions and competition from imports under Free Trade Agreements. The company cited lower realizations and slightly lower volumes as key factors impacting the top line.

What the Numbers Show

Operating profit margins contracted significantly to 8.57% in FY26, down from 12.25% in FY25. This divergence between relatively stable revenue decline and sharper margin compression indicates that input cost pressures outpaced any pricing adjustments the company could pass on to customers. Specifically, cost of materials consumed remained nearly flat at ₹2,019.9 crore despite lower sales volumes, suggesting an inability to reduce raw material procurement costs in line with reduced production output.

Additionally, while gross operating profits fell, other income remained robust at ₹236.4 crore, largely supported by gains on mutual fund investments and insurance claims. This reliance on non-operating income helped cushion the bottom-line impact of the operational margin squeeze.

Capital Expenditure and Outlook

The company is investing in efficiency improvements with two major projects underway: a 6.5 MV Turbine project costing ₹13.30 crore and a Chlorine Dioxide plant with a capital outlay of ₹30.95 crore. Both are expected to be commissioned by December 2026, aiming to reduce power costs and improve pulp brightness.

Management highlighted geopolitical tensions in the Middle East as a risk factor, noting potential supply shocks and energy price volatility. However, it expects domestic demand to grow in step with the broader economy.