The National Company Law Tribunal has directed Vardhman Polytex Limited to pay ₹10.19 crore in execution proceedings against Maschinen Umwelttechnik Transportanlagen Gesellschaft GmbH (MUT). The order, dated August 20, 2026, mandates payment within 30 days.

Litigation Background

The proceedings stem from the implementation of an August 13, 2015 order by the erstwhile Company Law Board, New Delhi. The dispute concerns the exit of minority shareholder MUT from F.M. Haemmerle Textiles Limited (FMH), a former subsidiary of Vardhman Polytex. The tribunal’s latest order allows the execution application regarding the payment of share value along with interest.

Financial Implications

The claim comprises the value of FMH shares determined at ₹5.40 per share as on March 31, 2010, plus interest at 15% per annum. The company stated that the financial liability, including interest payable, remains subject to the outcome of appellate proceedings and any interim or final relief granted by competent forums.

Next Steps

Vardhman Polytex is taking legal steps to file an appeal against the order before the appropriate appellate forum. The company intends to seek interim relief or a stay against the operation and implementation of the tribunal’s direction. It will keep stock exchanges informed of material developments, including the filing of the appeal and any interim orders.

Vardhman Polytex Limited reported a net profit of ₹311.19 Crore for the quarter ended June 30, 2026, marking a 757% year-on-year increase from ₹0.19 Crore in the corresponding period of FY25. The sharp turnaround was primarily driven by a non-operational exceptional gain of ₹309.56 Crore, recognized from the full and final settlement of outstanding debt with Phoenix ARC. This resolution significantly strengthens the company’s balance sheet, turning its net worth positive to ₹113.96 Crore from a negative ₹227.13 Crore in June 2025.

The Board of Directors approved the standalone unaudited financial results on August 10, 2026, pursuant to Regulation 30, 33, 51(2), 52, and other applicable provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. To facilitate the debt repayment, Vardhman Polytex allotted Secured Rated Listed Redeemable Non-Convertible Debentures (NCDs) aggregating to ₹75 Crore on BSE Limited on April 6, 2026, followed by Optionally Convertible Debentures (OCDs) of ₹15 Crore on May 18, 2026. The company received a No Objection Certificate from Phoenix ARC on April 7, 2026, confirming the complete clearance of the liability. Navneet Sehgal & Co., the statutory auditors, issued an independent review report on the interim financial results.

Operationally, revenue from operations rose modestly by 2% to ₹60.75 Crore from ₹59.54 Crore in the previous year. The textiles segment contributed ₹68.91 Crore in segment revenue, while the real estate segment reported no revenue for the quarter. Adish Oswal, Chairman & Managing Director, stated that the debt resolution marks a critical milestone in the company’s financial consolidation, providing a stable foundation for sustainable growth. The company continues its asset optimization strategy, including the proposed monetization of approximately 26 Acres of land at its Ludhiana Unit.

What the Numbers Show

The reported profit surge is entirely non-operational. While headline profits jumped 757%, core operating profit before tax and exceptional items stood at just ₹1.63 Crore, compared to ₹0.19 Crore in Q1FY26. This indicates that underlying business profitability remains modest despite the significant balance sheet repair. The issuance of ₹90 Crore in combined debt instruments (₹75 Crore NCDs and ₹15 Crore OCDs) reflects a strategic shift towards structured financing to resolve legacy liabilities. Analysts should note that while the immediate interest burden from the Phoenix ARC debt is eliminated, the company now carries new debt obligations secured against assets valued at ₹632.54 Crore, maintaining a security cover ratio of 7.84 times.

Corporate Actions and AGM Details

Vardhman Polytex has scheduled its 46th Annual General Meeting (AGM) for Thursday, September 24, 2026, at 11:00 AM at its registered office in Ludhiana. The Register of Members and Share Transfer Books will remain closed from Tuesday, September 22, 2026, to Thursday, September 24, 2026, inclusive. The cut-off date for determining shareholders entitled to vote at the AGM is fixed as September 17, 2026, end of day. The notice convening the AGM will be submitted in due course.

Source: https://lodr-files.dhan.co/lodr-inputs/Company/INE835A01029/8a848227-1318-49c4-b0c1-49b48696126c.pdf