Engineers India to provide Letter of Undertaking as Bank Guarantee to IndusInd Bank

New Delhi, 26 August 2025: State-owned Engineers India Ltd (EIL) has announced that it has received the Board’s approval to act as a bank guarantee taken by Ramagundam Fertilizers & Chemicals Limited (JV Company of EIL, NFL, and FCIL).With this regard and as per the terms of the sanction of this Bank Guarantee, the IndusInd Bank has sought a letter of undertaking from sponsors, i.e., Ell & NFL.

Ramagundam Fertilizers & Chemicals Limited (RFCL) is a joint venture promoted by Engineers India Limited (EIL), National Fertilizers Limited (NFL), and Fertilizer Corporation of India Limited (FCIL) for producing urea & ammonia. The RFCL plant was declared commercial on 22nd March 2021.

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As per the terms of sanction of the RTL facility by lenders to partially fund the project cost, RFCL had to create a cash Debt Service Reserve Account (DSRA) or provide a Bank Guarantee (BG) without any recourse on project assets amounting to 90 days of ensuing principal repayment and interest on the RTL facility.

In this regard, RFCL decided to furnish a bank guarantee to the project lenders (SBI consortium) in place of funding the DSRA account in cash. The Bank Guarantee for DSRA of Rs. 175 Crore was established with IndusInd Bank Ltd.

The letter of undertaking as stated by EIL:

1. Engineers India Limited has a 26% shareholding in the Borrower. We shall not dilute our shareholding below 26% till the DSRA BG Facility expires, presently being made available till 31.03.2026, without prior permission in writing from the Bank.

2. Further, we will not pledge our shareholding to any other Bank/NBFC/institution without the permission of the Bank."

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