Based on this approval, the company intends to issue NCDs amounting to Rs 300 crore in the near term to primarily finance working capital and capital expenditure subject to the terms of the issue.
Vice-Chairman and Managing Director Vir S Advani said, "the ongoing lockdown
has adversely affected the company's cash flow and, consequently, the working capital cycle is likely to get lengthened."
The company has resumed production partially at its Wada (Maharashtra) and Dadra (Dadra and Nagar Haveli) plants, and other operations are set to resume progressively as and when the government announces relaxations.
Blue Star expects demand revival from the second half of the current financial year, and it is important to persist with capital expenditure pertaining to indigenisation and backward integration programmes.
"Therefore, it is prudent to infuse additional funds through the issuance of NCDs in order to retain adequate liquidity to support business continuity and growth over the next 12 to 18 months," said Advani.