Priyanka Tiwari
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Nuvoco Vistas Corporation Ltd., one of India's leading cement producers, is reportedly arranging a $140 million private loan to support its acquisition of Vadraj Cement Ltd., according to sources familiar with the matter.
The financing facility is expected to carry a tenor of four to five years, and the company is currently in talks with multiple alternative asset managers to secure the funds. These discussions remain confidential and subject to change, according to the sources.
Nuvoco Vistas has not yet issued a public comment on the financing arrangement.
Context: India’s Expanding Private Credit Market
India’s private credit sector is seeing rapid growth, driven in part by Prime Minister Narendra Modi’s infrastructure initiatives. These efforts have fueled demand for mid-sized financing in sectors like renewable energy and construction.
According to Ernst & Young, India witnessed $9.2 billion in private credit deals across 163 transactions in 2023, highlighting the increasing role of private funding in the country’s economic development.
Bank Lending Limitations Prompt Shift to Private Credit
Nuvoco Vistas’ pivot to private credit is largely due to Indian banks’ limited ability to finance M&A activity. Reserve Bank of India regulations restrict domestic banks from funding equity acquisitions of local firms except under specific conditions. As a result, many companies are turning to private lenders for greater flexibility.
Regulatory Approval and Acquisition Details
The National Company Law Tribunal (NCLT) approved Nuvoco Vistas' acquisition of Vadraj Cement on April 3, at a total deal value of ₹1,800 crore ($210 million), according to a company release.
The acquisition is expected to strengthen Nuvoco’s market position and cement production capacity in India.
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