SMT Engineering Limited has issued a corporate guarantee for its wholly-owned material subsidiary, Sai Machine Tools Private Limited, to secure working capital facilities from Standard Chartered Bank. The company disclosed this development under SEBI listing regulations on December 19, 2025.

Corporate Guarantee Details

The company has extended a corporate guarantee to facilitate working capital facilities for its subsidiary up to ₹7.70 crores from Standard Chartered Bank. This guarantee supports the subsidiary's business operations and working capital requirements.

Credit Facility Structure

Sai Machine Tools Private Limited has executed a Memorandum of Entry for Deposit of Title Deeds with Standard Chartered Bank for the credit facilities. The arrangement comprises business working capital facilities structured to meet operational requirements.

Security and Mortgage Arrangements

The credit facilities are secured through a mortgage by deposit of title deeds involving land owned by Ashok Jaiswal, a promoter of both SMT Engineering and Sai Machine Tools Private Limited. The promoter has extended his land as security to facilitate the working capital facilities.

Impact and Related Party Considerations

The transaction qualifies as a related party transaction given the common ownership and management structure. However, none of the promoters or members of the promoter group or directors have any interest in this transaction, and it has been executed on an arm's length basis. The company has indicated that at this point, there is no impact of this guarantee other than disclosure in the financial statements as a contingent liability.

Regulatory Compliance

SMT Engineering has disclosed the corporate guarantee in accordance with Regulation 30 of SEBI Listing Obligations and Disclosure Requirements Regulations, 2015. The disclosure follows the requirements outlined in SEBI Master Circular dated November 11, 2024, and December 31, 2024, ensuring comprehensive transparency regarding the subsidiary's credit arrangements and corporate guarantee provisions.

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.