Nuvoco Vistas Gets NCLT Nod for Vadraj Cement Acquisition

Nirmal Group's Nuvoco Vistas Corporation has got NCLT's approval to buy Vadraj Cement. The acquisition is approximated at over INR 1800 crores. It was approved by the Mumbai bench of the NCLT.

Nuvoco will execute the deal through Vanya Corporation, a fully owned subsidiary of Nuvoco. After the transaction, Vanya will merge with Vadraj Cement, making Vadraj Cement a direct subsidiary of Nuvoco. Nuvoco has said it will fund the acquisition without significantly increasing its existing consolidated debt.

Strategic Investments to Revive Idle Assets

Aside from the upfront acquisition price, Nuvoco has earmarked an additional INR 1,200 crore to reinstate and kick-start Vadraj's operations, which have been dormant for almost seven years. Their operational capacity is expected to roughly triple from fiscal year 2025 to fiscal year 2027, with the facilities being fully online in the first half of fiscal year 2027.

"The acquisition will be undertaken through Vanya Corporation, a wholly owned subsidiary of Nuvoco Vistas," said Nuvoco Vistas. "Subsequently, Vanya will be merged with Vadraj Cement, as outlined in the Resolution Plan. After the merger, Vadraj Cement will become the wholly owned subsidiary of the company. A phased investment will be spread over 15-18 months from the date of actual handover by the Committee of Creditors towards getting the facility running and driving operational improvements across the VCL plants. The estimated target date to commence production is around third quarter of fiscal 2027."

Vadraj Cement has a 3.5 million tons per annum clinker plant in Kutch and a 6 million tons per annum grinding unit in Surat. Besides that, it has large reserves of limestone. These factors made Vadraj a big target in terms of long-term value for Nuvoco, who was especially focused on the western Indian markets.

"The captive jetty in Kutch further enhances logistical efficiency. With this acquisition, Nuvoco’s total cement production capacity is set to increase to approx 31 MTPA, consolidating its position as the fifth-largest cement group in India for the long term," Nuvoco Vistas stated.

Strengthening Market Position and Operational Synergy

Upon completing this deal, Nuvoco Vistas will take a step forward in its attempt to emerge as one of the top cement manufacturers in India. The company, according to Managing Director Jayakumar Krishnaswamy, is well-positioned to enhance logistical optimization and competitiveness, as well as to harness key regional market opportunities in the door's path.

Nuvoco's growth strategy is quite simply spelled out in the form of a series of acquisitions that it has done in recent years. Its first major acquisition was that of Lafarge India in 2016. It then went on to acquire Emami Cement in 2020.