Filatex India Limited has provided a corporate guarantee of Rs 200 crores for its wholly owned subsidiary Texfil Private Limited's term loan from Punjab National Bank. The company disclosed this transaction on 29th January, 2026, in compliance with Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Corporate Guarantee Details

The corporate guarantee secures a term loan of up to Rs 200 crores that Texfil Private Limited will obtain from Punjab National Bank. This financing will support a polyester textile recycling project with significant operational capacity and investment scope.

Project Specifications

The term loan will fund a polyester textile recycling project that represents a substantial investment in sustainable textile manufacturing. The project demonstrates the company's expansion into environmentally conscious production methods.

Regulatory Compliance and Impact

Filatex India Limited executed the corporate guarantee deed in accordance with SEBI Master Circular SEBI/HO/CFD/PoD2/CIR/P/0155 dated 11th November, 2024. The transaction involves no promoter or promoter group interest and is conducted on an arm's length basis.

The company stated that the guarantee will be disclosed as a contingent liability in its financial statements. As the guarantee supports a wholly owned subsidiary that forms part of the consolidated group, the immediate operational impact on the parent company remains limited to this disclosure requirement.

Transaction Structure

Texfil Private Limited, being a wholly owned subsidiary of Filatex India Limited, operates within the company's consolidated business framework. The corporate guarantee facilitates the subsidiary's access to institutional financing for its expansion into recycling operations, supporting the group's diversification strategy in textile manufacturing.

Filatex India has announced a significant investment of ₹15 crores in its subsidiary Texfil through the acquisition of 1.5 crore equity shares. This strategic move is designed to support multiple key business initiatives within the subsidiary operations.

Investment Details

The investment structure and allocation demonstrate a comprehensive approach to subsidiary development:

Fund Utilization Strategy

The ₹15 crore investment will be strategically allocated across three primary areas to strengthen Texfil's operational capabilities. The funds are earmarked for a recycling project, which aligns with sustainable business practices and environmental responsibility initiatives. Additionally, a portion of the investment will be directed towards loan repayment activities, helping to optimize the subsidiary's debt structure and financial position.

Working Capital Enhancement

A significant component of the investment will be utilized to bolster working capital requirements, ensuring smooth day-to-day operations and supporting business growth initiatives. This capital infusion is expected to provide Texfil with enhanced financial flexibility to pursue operational expansion and meet market demands effectively.

Strategic Implications

This equity investment represents Filatex India's continued commitment to strengthening its subsidiary operations and expanding its business footprint. The focus on recycling projects particularly highlights the company's dedication to sustainable manufacturing practices within the textile industry, positioning both entities for long-term growth in an increasingly environmentally conscious market.