Nuvoco Vistas Corporation Limited has taken a significant step in strengthening its financial position by executing subscription and option agreements for its wholly-owned subsidiary, Vadraj Cement Limited. The agreements, signed on November 14, 2025, pave the way for Vadraj Cement to issue Series A compulsory convertible debentures (CCDs) worth up to Rs 600.00 crores to investors.

Key Details of the Agreement

The debenture deal includes several noteworthy features:

1. Call and Put Options: The agreements incorporate call and put options with a 10.25% Internal Rate of Return (IRR) over a period of 5-6 years.
2. Put Option Provider: Nirma Limited, a promoter group company of Nuvoco Vistas, will serve as the put option provider.
3. Utilization of Proceeds: The funds raised through this issuance will be primarily used to repay financial assistance previously provided to Vadraj Cement.

Structure of the Deal

The transaction is structured through two main agreements:

1. Securities Subscription and Debenture Trustee Agreement (Subscription Agreement):

   • Parties: Nuvoco Vistas, Vadraj Cement, and the Debenture Trustee (acting for the Investors)
   • Purpose: To facilitate the issuance of Series A CCDs by Vadraj to the Investors and define the roles of all parties involved

2. Option Agreement:

   • Parties: Nuvoco Vistas, Vadraj Cement, the Debenture Trustee, and Nirma Limited
   • Purpose: To establish Nuvoco Vistas as the call option holder and Nirma as the put option provider

Financial Implications

The deal carries significant financial implications:

• Issue Size: Up to Rs 600.00 crores in Series A CCDs
• Return Rate: 10.25% IRR for investors
• Tenure: 5 to 6 years, depending on the specific series of CCDs

Corporate Governance Aspects

The agreements include several provisions to ensure proper corporate governance:

• Nuvoco Vistas, Nirma, and/or their affiliates are required to maintain at least 51% of Vadraj's fully diluted share capital, with certain exceptions.
• The investors face limited transfer restrictions on their securities.
• In specific situations, investors have a drag right against Nuvoco Vistas, allowing them to require the company to sell Vadraj shares to meet any shortfall in their fixed return.

Conclusion

This strategic financial move by Nuvoco Vistas demonstrates the company's commitment to optimizing its capital structure and supporting its subsidiaries. By leveraging the strength of its promoter group and attracting external investment, Nuvoco Vistas is positioning Vadraj Cement for potential growth while managing its financial obligations effectively.

As the cement industry continues to evolve, such financial maneuvers may play a crucial role in maintaining competitiveness and funding future expansions. Investors and market watchers will likely keep a close eye on how this infusion of funds impacts Vadraj Cement's operations and Nuvoco Vistas' overall financial health in the coming years.

Nuvoco Vistas Corporation Limited, a prominent player in the Indian cement industry, has recently been subject to a search operation by the Maharashtra Goods & Service Tax Department. The search, conducted under Section 67 of the Maharashtra Goods & Service Tax Act, 2017, commenced on November 12, 2025, at the company's registered office.

Details of the Search Operation

According to the company's disclosure under Regulation 30 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the following details were provided:

Company's Response

Nuvoco Vistas has stated that it has fully cooperated with the GST officials throughout the search process. The company has responded to all clarifications and details sought by the authorities and has committed to continuing this cooperation.

In its statement, Nuvoco Vistas emphasized its adherence to high standards of governance and its ongoing commitment to complying with laws and regulations. The company assured stakeholders that it would maintain these standards moving forward.

Business Impact

As of now, Nuvoco Vistas has reported that there is no material impact on the company's business operations due to this action by the GST Department.

Investor Considerations

While the company maintains that there is no material impact on its operations, investors and stakeholders should keep a close eye on further developments. Regulatory actions such as these can potentially affect a company's reputation and financial standing, even if no immediate impact is apparent.

Nuvoco Vistas Corporation Limited continues to operate its business as usual while cooperating with the authorities. The company's transparency in disclosing this information aligns with regulatory requirements and good corporate governance practices.

Stakeholders are advised to stay informed about any updates the company may provide regarding the nature and scope of the GST Department's investigation.