Vardhman Polytex Limited has informed the Exchange regarding the Amendment to AOA/MOA of the company.
VARDMNPOLY · price
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Vardhman Polytex's board approved raising up to ₹35 crore through listed, secured Non-Convertible Debentures (NCDs) on private placement at a high 18% per annum interest rate, with monthly payouts over a 5-year tenor until March 2031. It also approved issuing up to ₹25 crore of unlisted, secured Optionally Convertible Debentures (OCDs) at 18% compounded annually, on a preferential basis to a single non-promoter investor — Special Situation India Fund — convertible into equity within 6–15 months or redeemable via bullet repayment at 18 months. The Articles of Association will be amended to allow debenture trustees to appoint an observer on the Board. Separately, the board gave in-principle approval to sell/transfer the land at its Ludhiana unit (which contributed 33.39% of revenue at ₹9,514.39 lakh), with proceeds earmarked to repay lender liabilities. The company disclosed a negative net worth of ₹22,739.14 lakh as of March 31, 2025. An EGM is scheduled for April 16, 2026, and a Postal Ballot will seek shareholder approval for the land sale.
Shareholders should note this is a heavily stressed company (negative net worth) resorting to very costly debt at 18% and equity-dilutive instruments to stay afloat, while also monetising a major revenue-generating asset. The OCD conversion option could lead to future equity dilution, and the high NCD coupon reflects the elevated risk being priced by lenders. Existing shareholders may face value erosion unless the fund-raising and asset sale successfully deleverage the balance sheet.