Rashtriya Chemicals and Fertilizers Limited — Important, 20-06-2025: Disclosure of material issue

Rashtriya Chemicals and Fertilizers Limited (RCF) has announced a board meeting approving an unsecured inter-corporate loan of Rs. 233 Cr to its joint venture, Talcher Fertilizers Limited, where RCF holds a 31.85% stake. The loan tenure is 6 months with an interest rate of 6-month SBI MCLR plus 0.65%, payable monthly, and includes a prepayment option with 7 days' notice.

**Issue:** RCF is extending significant credit support to its JV, which could increase RCF’s exposure to the fertiliser business through its associate.

**Possible Impact:** While this loan may support Talcher Fertilizers’ short-term funding needs and operations, there is a credit risk associated with inter-company unsecured lending. The six-month tenor limits prolonged exposure, and interest payments provide some cash flow cushioning.

**Company's Response:** By setting a short tenure with prepayment flexibility and monthly interest payments, RCF aims to manage liquidity risk while supporting its JV’s operational needs. The transaction is at arm’s length terms despite the related-party nature.

Investors should monitor Talcher Fertilizers’ performance and RCF’s related-party exposures for any material developments.