Short-Term Borrowings
Debt repayable within twelve months, typically working capital loans, cash credit facilities and commercial paper.
Formula
Test: the borrowing is contractually repayable within twelve months of the balance sheet date
Unit
₹ crore
In depth
Short-term debt is cheaper than long-term debt but must be rolled over repeatedly, which converts a pricing advantage into refinancing risk. Funding long-lived assets with short-term borrowings — the maturity mismatch — is what turns a liquidity squeeze into an insolvency, and it is the recurring pattern in Indian financial-sector failures. Commercial paper is the sharpest form of this risk because it is market-funded and disappears quickly when sentiment turns. A company whose short-term borrowings grow faster than its revenue is usually funding working capital deterioration rather than growth.
Worked example
Short-term borrowings of ₹400 crore fund assets that generate cash over ten years. If lenders decline to roll even a quarter of it, ₹100 crore must be found immediately from a business that cannot liquidate its plant to produce it.
Illustrative figures, chosen so the arithmetic is easy to follow. Not a live price and not a valuation of any company.
Educational reference only
This entry explains what “Short-Term Borrowings” means. It is not investment advice and not a recommendation to buy or sell any security. Any numbers above are illustrative, not live prices, and nothing here predicts price direction or rates a stock. Consider your own circumstances and consult a SEBI-registered investment adviser before acting.