Finolex Cables Limited has announced the provision of a corporate guarantee worth ₹39.20 crores to ICICI Bank Limited for its joint venture company's working capital requirements. The disclosure was made under Regulation 30 of SEBI Listing Obligations and Disclosure Requirements Regulations, 2015.

Corporate Guarantee Details

Finolex Cables has issued a corporate guarantee of ₹39.20 crores to ICICI Bank for its joint venture company Finolex J-Power Systems Limited (FJPSL)'s working capital facilities. The total working capital facility amounts to ₹80.00 crores, with the guarantee forming a part of this arrangement.

Joint Venture Structure and Risk Management

FJPSL operates as a joint venture where Sumitomo Electric Industries Limited holds a 51% stake while Finolex Cables maintains a 49% shareholding. The partnership involves promoter Mr. Deepak Chhabria, who serves as a Promoter of Finolex Cables Limited and Director of FJPSL, establishing the connected party relationship.

The companies have structured a comprehensive risk-sharing mechanism through a Memorandum of Understanding dated July 27, 2023. Under this arrangement:

• Both joint venture partners will bear risks on a pro-rata basis
• Risk allocation corresponds to their respective shareholdings
• Finolex Cables: 49% risk exposure
• Sumitomo Electric Industries Limited: 51% risk exposure

Transaction Framework

The corporate guarantee arrangement has been executed at arm's length basis, ensuring compliance with regulatory requirements for related party transactions. FJPSL has confirmed the risk-sharing arrangement, providing additional assurance regarding the structured approach to managing potential liabilities.

The guarantee represents a strategic financial support mechanism for the joint venture's operational requirements while maintaining proportional risk exposure aligned with ownership stakes. This structure allows FJPSL to access necessary working capital facilities while ensuring both partners share responsibilities according to their investment levels in the joint venture.

Finolex Cables Limited , a prominent player in the Indian cable industry, has released its financial results for the second quarter of fiscal year 2026, showcasing a mixed performance amidst challenging market conditions.

Financial Highlights

The company demonstrated resilience in its financial performance, with modest top-line growth accompanied by more substantial improvements in profitability metrics.

Segment Performance

Finolex Cables faced headwinds in two key segments:

1. Agriculture: Prolonged monsoons impacted the agricultural sector, potentially affecting demand for related cable products.
2. Building Wires: A moderation in the real estate market led to challenges in this segment.

Despite these obstacles, the company reported a strong 60.00% volume growth in its cables segment, indicating robust demand in other areas of its business.

Future Outlook

Finolex Cables is positioning itself for future growth with strategic investments in manufacturing capabilities:

• New preform and fiber draw plants are expected to be operational by March 2026.
• These additions aim to enhance the company's production capacity and potentially improve its market position.

Market Implications

The mixed results reflect the complex operating environment for industrial companies in India. While Finolex Cables has shown the ability to grow its bottom line significantly, the modest revenue growth suggests ongoing challenges in certain market segments.

Investors and industry observers will likely be watching how the company navigates the current market conditions and whether the planned expansion of manufacturing facilities will translate into stronger growth in the coming quarters.

As always, it's important for stakeholders to consider these results in the context of broader market trends and the company's long-term strategy.