Mangalam Organics , a leading manufacturer of camphor and other terpene chemicals, has announced a significant change in its funding strategy. The company has executed a binding loan facility agreement with Yes Bank Limited for ₹50 crore, while simultaneously cancelling its previously approved plan to issue non-convertible debentures (NCDs).

Loan Facility Details

The newly secured loan facility with Yes Bank comprises:

• Working capital limits of ₹48.00 crore, including sublimits for Letter of Credit (L/C), Working Capital Demand Loan (WCDL), and term loan facility
• An unsecured forward cover limit of ₹2.00 crore

This strategic move comes after the Board of Directors reviewed the company's funding strategy and decided to cancel the earlier proposal for issuing secured, unlisted, unrated, senior non-convertible debentures worth up to ₹60.00 crore.

Purpose and Terms of the Loan

According to the company's disclosure, the loan facility will be utilized for:

1. Working capital requirements
2. Capital expenditure towards reinstatement of the camphor plant
3. General working capital needs

The agreement includes security measures such as:

• Hypothecation of plant and machinery
• Hypothecation of current assets
• Equitable mortgage of factory land
• Personal guarantees

Key Points of the Transaction

• Yes Bank Limited holds no shareholding in Mangalam Organics
• The bank is not related to the promoters or promoter group of the company
• The transaction is not classified as a related party transaction
• No nominees or directors will be appointed to the company's board by Yes Bank as a result of this agreement

Impact on Operations

This infusion of funds is expected to support Mangalam Organics' operations, particularly in reinvigorating its camphor production capabilities and meeting working capital requirements. The shift from the planned NCD issuance to a bank loan facility may indicate the company's preference for more flexible financing options.

Market Implications

This development showcases Mangalam Organics' ability to secure significant funding through traditional banking channels. The cancellation of the NCD issuance in favor of a bank loan might be viewed positively by investors, as it potentially reduces the company's debt burden and associated costs.

As Mangalam Organics moves forward with this new financial arrangement, stakeholders will likely keep a close eye on how effectively the company utilizes these funds to drive growth and enhance its market position in the terpene chemicals sector.

Mangalam Organics Limited, a leading chemical manufacturing company, has announced a crucial board meeting scheduled for September 16, 2025, to deliberate on potential fundraising activities. This development signals the company's proactive approach to financial planning and strategic growth.

Board Meeting Details

The company has informed the stock exchanges that its Board of Directors will convene on Tuesday, September 16, 2025. The primary agenda for this meeting is to consider and approve proposals for raising funds from banks or financial institutions, subject to necessary approvals.

Regulatory Compliance

In line with regulatory requirements, Mangalam Organics has made this announcement in accordance with Regulations 29 and 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. This ensures transparency and keeps shareholders and potential investors informed about significant corporate events.

Trading Window Closure

As part of its commitment to prevent insider trading, Mangalam Organics has also announced the closure of the trading window for designated persons and their immediate relatives. The trading window will remain closed from Friday, September 12, 2025, until 48 hours after the outcome of the board meeting is made public. This measure is in compliance with the SEBI (Prohibition of Insider Trading) Regulations, 2015, and the Company's Code of Conduct.

Implications for Investors

The upcoming board meeting to discuss fundraising options could have significant implications for Mangalam Organics' future financial strategy. Investors and market analysts will be keenly watching for the outcome of this meeting, as it may provide insights into the company's expansion plans, debt management strategies, or potential new projects that require additional capital.

While the specific details of the fundraising proposal are yet to be disclosed, this move by Mangalam Organics suggests a forward-looking approach to capital management and business growth. Shareholders and potential investors are advised to stay tuned for further updates following the board meeting on September 16, 2025.

As always, investors are encouraged to conduct their own research and consider their financial goals before making any investment decisions.