SMT Engineering Limited (formerly known as Adarsh Mercantile Limited) has announced that its wholly-owned material subsidiary, Sai Machine Tools Private Limited, has executed an equitable mortgage by deposit of title deeds with Punjab National Bank. This mortgage is in connection with existing credit facilities worth Rs. 45.33 crores.

Mortgage Details

The mortgage covers three industrial buildings in Indore, Madhya Pradesh:

In addition to these properties, the promoters have also provided personal properties as additional security for the credit facilities.

Financial Context

The consolidated balance sheet of SMT Engineering Limited shows significant growth in various financial metrics over the past year:

This substantial growth in assets and equity over the past year provides context for the company's ability to secure a significant credit facility for its subsidiary.

The execution of this mortgage demonstrates SMT Engineering's strategic approach to financing its operations and supporting its subsidiaries. By leveraging its real estate assets, the company has been able to secure substantial credit facilities, which may be used for various purposes such as expansion, working capital, or debt refinancing.

Investors and stakeholders should note that while such credit facilities can provide important financial flexibility, they also come with obligations and potential risks. The company's ability to effectively utilize these funds and manage the associated debt will be crucial for its long-term financial health and growth prospects.

SMT Engineering Limited has announced that its material subsidiary, Sai Machine Tools Private Limited, has executed an equitable mortgage agreement with ICICI Bank Limited. This strategic move aims to secure a loan facility of Rs 4.30 crores for non-residential land development.

Key Details of the Mortgage Agreement

Implications and Purpose

The execution of this equitable mortgage by Sai Machine Tools Private Limited, a material subsidiary of SMT Engineering Limited, signifies a strategic move towards expanding its non-residential development capabilities. The substantial loan amount of Rs 4.30 crores, coupled with a long-term repayment period of 180 months (15 years), suggests a significant investment in the company's future growth and development plans.

Property Details

The mortgaged property, an industrial land plot measuring 40,000 square meters, is strategically located in the Smart Industrial Township, Sector-7, District Indore. This prime location in a developing industrial area could potentially offer numerous advantages for the company's expansion and operational needs.

Regulatory Compliance

SMT Engineering Limited has duly informed the BSE Limited about this development, in compliance with Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. This transparency ensures that shareholders and potential investors are kept informed about significant financial arrangements involving the company's material subsidiaries.

Conclusion

This mortgage agreement represents a significant financial commitment by Sai Machine Tools Private Limited, backed by its parent company, SMT Engineering Limited. The substantial loan and the choice of a long-term financing structure indicate confidence in the company's future prospects and its ability to leverage this investment for growth in the non-residential sector.

Investors and market watchers will likely keep a close eye on how this loan facility is utilized and its impact on the company's future performance and expansion plans in the industrial sector.