Nuvoco Vistas Corporation Limited , India's fifth-largest cement player, has announced ambitious plans to enhance its cement grinding capacity in the Eastern region. The company aims to add 4 million tonnes per annum (MMTPA) to its existing capacity, with an investment of approximately Rs 200 crore.

Expansion Strategy

The expansion will be executed in three phases:

• Phase 1: Addition of ~1 MMTPA during Q3 FY 2025-26
• Phase 2: Addition of ~2 MMTPA by the end of FY 2025-26
• Phase 3: Addition of ~1 MMTPA during FY 2026-27

This strategic move will increase Nuvoco's cement capacity in the East by over 20% within the next one and a half years, rising from 19 MMTPA to 23 MMTPA.

Implementation Details

The capacity enhancement will be achieved through:

1. Installation of a new grinding mill at the Arasmeta Cement Plant
2. Equipment upgrades and process improvements at Jojobera, Panagarh, and Odisha Cement Plants
3. Internal debottlenecking initiatives

Financial Aspects

The expansion will be financed through internal accruals, demonstrating the company's strong financial position and commitment to growth.

Market Impact

This expansion is expected to strengthen Nuvoco's presence in key markets, including Eastern Madhya Pradesh, Eastern Uttar Pradesh, West Bengal, and Odisha. The company's focus on blended cement and premium products aligns with its sustainability goals and market demand.

Competitive Advantages

Nuvoco has recently completed several projects to enhance its competitiveness:

• A new coal unloading and clinker loading wagon system at the Sonadih Cement Plant, reducing rake handling time by ~50%
• Railway siding at the Odisha Cement Plant, enabling seamless rail transport and reducing freight costs

Management's Perspective

Mr. Jayakumar Krishnaswamy, Managing Director of Nuvoco Vistas Corp. Ltd., stated, "With cement demand in India estimated to grow at a CAGR of 7-8% in FY2025-26, we are well-placed for a growth trajectory in the long run. Our recent acquisition of Vadraj Cement Limited, coupled with these strategic investments in augmenting our existing facilities, is a testament to our relentless pursuit to continue our leadership position in the East while acquiring higher market share in the West and North Markets."

He added, "By improving our Clinker-to-Cement ratios, we expect to reduce CO₂ emissions considerably. This initiative reinforces our vision of building a safer, smarter and sustainable world with a stronger market presence."

Future Outlook

With this expansion and the recent acquisition of Vadraj Cement Limited, Nuvoco is on track to achieve a total cement capacity of 35 MMTPA by the end of FY2026-27. This growth trajectory is expected to consolidate the company's position as India's 5th largest cement group in terms of capacity for the long term.

The expansion plan reflects Nuvoco's commitment to sustainable growth and its strategy to meet the increasing demand in the Indian cement market while focusing on environmental responsibility and operational efficiency.

Nuvoco Vistas Corporation Limited , a prominent player in the Indian cement industry, has made a significant move to strengthen its subsidiary, Vadraj Cement Limited. The company's Board of Directors has approved the conversion of a substantial unsecured loan into equity shares, marking a strategic financial restructuring within its corporate structure.

Key Details of the Transaction

The Board of Directors of Nuvoco Vistas approved the conversion of part of an unsecured loan, along with accrued interest, payable by Vadraj Cement to Nuvoco Vistas. The total amount being converted is ₹508.65 crore, which will be transformed into 50,86,54,794 equity shares of Vadraj Cement.

Terms of the Conversion

• Conversion Amount: ₹508,65,47,940 (Five Hundred and Eight Crores Sixty-Five Lakhs Forty-Seven Thousand Nine Hundred and Forty Rupees)
• Number of Shares: 50,86,54,794 equity shares
• Face Value: ₹10 per share
• Fair Value: ₹10 per share (based on a valuation report from a Registered Valuer)

Impact on Shareholding

This corporate action will not alter Nuvoco Vistas' ownership in Vadraj Cement. The company will continue to hold 100% of the paid-up equity share capital of Vadraj Cement, maintaining its status as a wholly-owned subsidiary. The newly issued shares will rank pari passu with the existing equity shares held by Nuvoco Vistas.

About Vadraj Cement Limited

Vadraj Cement, incorporated on February 26, 1996, is an unlisted public company engaged in cement manufacturing. Its facilities include:

• A 3.5 MMTPA (~10,000 TPD) clinker unit in Kutch, Gujarat
• A 6 MMTPA grinding unit in Surat, Gujarat

The company's operations had been suspended for over seven years before Nuvoco Vistas acquired it through a resolution plan approved by the National Company Law Tribunal, Mumbai Bench, under the Insolvency and Bankruptcy Code (IBC) framework.

Strategic Implications

This loan-to-equity conversion is a strategic move by Nuvoco Vistas to strengthen the financial position of Vadraj Cement. By converting debt into equity, the parent company is effectively reducing the debt burden on its subsidiary, which could potentially improve Vadraj's balance sheet and operational flexibility.

The transaction, classified as a related party transaction, has been executed at arm's length, with the share price determined based on a fair valuation by a Registered Valuer. This approach ensures transparency and fairness in the intercompany financial restructuring.

As the Indian cement industry continues to evolve, this move by Nuvoco Vistas demonstrates its commitment to optimizing its corporate structure and supporting its subsidiaries. The financial restructuring could potentially position Vadraj Cement for improved performance and contribute to the overall growth strategy of Nuvoco Vistas in the competitive cement market.