Raja Electricals Consortium Brief Note 08 10 2021

MID CORPORATE BRANCH – TUMAKURU, KARNATAKA
Brief Note
Date: 08.10.2021
ACCOUNT : M/s. RAJA ELECTRICALS

BRANCH : Mid Corporate Branch, Tumkur CIRCLE: Bengaluru
Purpose : Proposal for creation of Consortium of Raja Electricals with Canara Bank
of the (Lead Bank) and HDFC Bank for the extended limits as requested by the
note party by creating pari passu charges on the existing Securities.
Corporate / Registered Office ‘Kushi Nilaya’, 14th cross, SIT Extension, Tumkur-
572103.
Key persons / promoters Mr. K P Gangaraju (Proprietor)
Beneficial Owner (if applicable) Mr. K P Gangaraju
Group NA
Established in / Dealing with us 1994/2014
since
Asset Classification Standard
CIRM CNR VII Moderate Risk 1 as per ABS 2020
Internal Risk Rating Present CNR VII Moderate Risk 1 as per ABS 2020
Previous CNR VII Moderate Risk 1 as per ABS 2019
ECAI Rating
Long Term Rating :BB/ Brick work rating
Short Term Rating :A4
Canara Bank Proposal Rating (CBPR) CBPR 2 - Normal
Facility Rating Term Loan – FR-7 Moderate Risk 1
Working Capital – FR -8 Moderate Risk 2
Present exposure Rs. 30.52 Crore
Present limit liability position 16.09.2021:

Nature of Limit Liabilit DP Overdue ROI Exposure
Limit y s FB NFB
OCC/ODBD 8.00 7.47 8.0 Nil RLLR + 2.55% 8.00 --
514126100000 0 i.e., 9.55% p.a.,
2
WCTL under 1.50 1.42 Nil RLLR (6.90%) + 1.42 --
GECL 0.75% =7.65%
514175300002 p.a.
4
Term Loan I 0.23 0.09 Nil Base Rate 0.09 --
514176800000 (8.35%)+2.90%
9 i.e., 11.25%
Term Loan II 0.43 0.37 Nil RLLR (6.90%) 0.37 --
514176800001 +3.75% i.e.,
9 11.25%
WCDL under 0.80 0.62 Nil RLLR (6.90%) 0.62 --
CCS +0.75% =7.65%
514175300002 p.a.
4
M/s. Raja Electricals., - MCB, Tumkur
Bank 20.00 15.19 Nil 50% concession 0.00 20.00
Guarantee in applicable
charges
Total 30.9 25.16 Nil 10.50 20.0
6 0
Present Exposure (Canara Bank) Proposed Consortium exposure

(FB + NFB) (Canara Bank + HDFC Bank)
30.52 62.52
Computation of Security coverage: (Rs. in Crore)

Details Existing Proposed
Exposure 30.52 62.52
Primary security 38.88 49.50

Collateral security 32.55 32.55
Primary security coverage 127.39% 79.17%
Collateral security coverage 106.65% 53.78%
Note: HDFC bank has sanctioned limits based on 50% security coverage to avoid takeover
of account we recommend accepting the sanction of enhancement in limits at above security
coverage.
Background of the note:
The borrower is existing customer of our bank with good track record. Now HDFC bank has
sanctioned Rs. 52.08 Crore towards takeover of our bank limits. It is also learnt that the
borrower’s housing loans and other retail facilities are also proposed to be takeover. To
retain the existing credit exposure with satisfactory track record, we have requested the
borrower to continue our limits and submitted our proposal with enhancement in credit
facilities from Rs. 28.00 Crore to Rs. 60.00 Crore vide our note number 007/5141/2021-22
dated 18.09.2021. Further we have also replied observations of Head office: SME Section
vide 118 dated 26-09-2021. We were informed to obtain by competent authority for
obtaining Audited financials for 31.03.2021, borrower being proprietary concern it is
informed by the firm’s auditor that Income tax department is yet to release required forms
for submitting returns for FY 2020-21 hence submitting Audited financials for FY 2020-21
would be during November 2021.
In the mean time the HDFC bank officials have come with DD for entire value of Rs. 30.00
Crore and for closure of loans. Branch has rejected their DDs and advised the borrower to
continue with our bank. Borrower has informed that they are in urgent need of funds and
they wish to avail the limits from other bank, for this we have perused with the borrower for
continuation of limits with us as we have already taken his request with CO/HO.
During discussion the borrower has also proposed to continue with our bank under
consortium arrangement led by our bank. In such an event our bank has to provide letter
seeding pari-passu charge on current assets and collaterals. We propose a sharing patron as
under:
Name of the Fund based Non- fund based Total % of stake

bank limits limits limit
Canara Bank 8.00 20.00 28.00 46.67%
HDFC Bank 8.00 14.00 32.00 53.33%
Total 16.00 34.00 60.00
Page 2 of 3
M/s. Raja Electricals., - MCB, Tumkur
Now the borrower in urgent need of funds and requesting our bank to seed pari passu
charge till formation of consortium and we can re-alien the limit after receipt of
enhancement of limits from our bank.
Page 3 of 3

Raja Electricals Consortium Brief Note 08 10 2021

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MID CORPORATE BRANCH – TUMAKURU, KARNATAKA

ACCOUNT : M/s. RAJA ELECTRICALS

Present limit liability position 16.09.2021:

Present Exposure (Canara Bank) Proposed Consortium exposure

Computation of Security coverage: (Rs. in Crore)

Primary security 38.88 49.50

Background of the note:

Name of the Fund based Non- fund based Total % of stake

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