Balajee puts up ₹4.09 cr to back its subsidiary's bank loan
The nano-cap's guarantee for Jagannath Plastics is a small sum in absolute terms but a notable contingent liability against its own ₹248 crore market cap.
— 1 earlier story on Shree Tirupati Balajee Agro Trading Company Ltd →What's new
- Balajee approved a ₹4.09 cr corporate guarantee for Jagannath Plastics' Bank of Baroda loan.
- The guarantee crosses the 1% materiality threshold at 1.65% of Balajee's ₹248 cr market cap.
- Promoter Binod Kumar Agrawal is a director at Jagannath Plastics, creating a related-party link.
Why this matters
For a company valued at ₹248 crore, a ₹4.09 crore contingent liability is a real commitment. It ties the parent's balance sheet directly to the subsidiary's ability to repay a working capital loan. The promoter's dual role at both entities means the board was effectively approving exposure to its own side venture.
What we're watching
- Jagannath Plastics' financial health and loan repayment track record.
- Whether Balajee discloses the subsidiary's detailed financials to quantify the risk.
- The size of the outstanding loan facility relative to Jagannath's own operations.
The full read
Shree Tirupati Balajee has agreed to guarantee a ₹4.09 crore working capital loan for Jagannath Plastics, its material subsidiary. Bank of Baroda gets the guarantee. For a nano-cap with a market value of ₹248 crore, that's 1.65% of its worth, crossing the 1% materiality line. The arrangement has a family twist: promoter Binod Kumar Agrawal sits on Jagannath's board and holds a stake. The board called it arm's length. That's technically true and beside the point. The point is that Balajee's balance sheet now stands behind a private company's bank debt, and the promoter benefits from both sides of that commitment. The guarantee is small. The question is whether the subsidiary's loan book stays manageable.
Questions answered
- Why does this guarantee matter for a ₹248 crore company?
- The ₹4.09 crore guarantee represents 1.65% of Balajee's market capitalization, crossing the 1% materiality threshold for companies its size. It creates a direct contingent liability on the parent's balance sheet.
- What is the promoter's connection to the deal?
- Promoter Binod Kumar Agrawal is a director and shareholder in Jagannath Plastics. He has a direct interest in the subsidiary receiving the bank facility, though the board stated the transaction is at arm's length.
- What is the guarantee securing?
- It backs an additional working capital term loan facility from Bank of Baroda taken by Jagannath Plastics. The guarantee makes Balajee liable if the subsidiary defaults on the loan.
- How significant is this for the company's risk profile?
- It increases the parent company's contingent liabilities relative to its small market capitalization. The risk is concentrated in the repayment capacity of a single material subsidiary.
Story so far
All notes on BALAJEE →- 29 May 2026 · 7:53 PM IST Balajee puts up ₹4.09 cr to back its subsidiary's bank loan
- 1d ago Shree Tirupati Balajee posts ₹573.74 cr annual revenue, ₹12.31 cr net profit