Mazagon Dock Shipbuilders Limited’s Board of Directors has approved the arrangement of additional credit facilities amounting to ₹1,250 Crores. This facility, a Standby Letter of Credit (SBLC) from the State Bank of India, Mumbai, will support its subsidiary, Colombo Dockyard PLC, Sri Lanka. The approval, granted on October 27, 2026, aims to bolster financial flexibility and operational support for its international subsidiary.
Board Sanctions Significant Credit Facility
Mazagon Dock Shipbuilders Limited (MDL) announced today that its Board of Directors has given its approval for availing additional credit facilities totaling ₹1,250 Crores. This significant financial backing was sanctioned during a board meeting held on October 27, 2026.
Enhancing Financial Support for Subsidiary
The approved credit facility is structured as a Standby Letter of Credit (SBLC) to be issued by the State Bank of India, Mumbai. This facility is intended to provide crucial financial support to MDL’s subsidiary, Colombo Dockyard PLC (CDPLC), based in Sri Lanka. The arrangement will enable CDPLC to secure necessary guarantees from banks, facilitating its ongoing shipbuilding contracts and operations.
Terms and Conditions
Under the terms of the agreement, CDPLC will be responsible for furnishing bank guarantees to its clients against advances received for shipbuilding contracts. The Standby Letter of Credit facility arranged by MDL will assist the bank in Colombo to issue these guarantees. Importantly, all SBLC issuance charges, taxes, and directly attributable costs, including out-of-pocket expenses, will be borne by CDPLC, with a 10% markup to be reimbursed to MDL. In the event of CDPLC defaulting on its obligations, MDL, as the back-to-back SBLC provider, would assume the liability.
Operational Impact
This strategic financial move is expected to enhance operational efficiency and provide greater financial robustness for both MDL and its subsidiary. The board meeting commenced at 10:30 hrs IST and concluded at 14:40 hrs IST on October 27, 2026.
Source: BSE
