Kotak Special Situations Fund invests ₹500 crore in Nirma unit

Mumbai: Kotak Special Situations Fund, managed by Kotak Investment Advisors Ltd, on Thursday said it has made an investment of ₹500 crore in Nirma Group unit Nuvoco Ltd, to help finance the latter's acquisition of Emami Cements Ltd.

This financing is a timely investment for achieving financial closure for Nuvoco to consummate the acquisition and consolidate its position as a leading cement manufacturer in Eastern India, Kotak said in a statement. The investment will help fuel the growth of the consolidated cement business of Nuvoco, with an eventual foray into the primary capital market, it added.

On Wednesday, Emami informed stock exchanges that it has completed the transfer of 100% shares of Emami Cement shares to Nuvoco.

Nuvoco, in February, had agreed to acquire the cements business of Emami group for an enterprise value of ₹5,500 crore.

The Emami cement acquisition will bring Nuvoco’s total cement capacity in eastern, northern and western India to 23.5mtpa, including an ongoing capacity expansion project at its Jojobera plant and over 60 ready-mix plants. The combined operations will span three facilities in Chhattisgarh, two each in Rajasthan and West Bengal and one each in Bihar, Jharkhand, Odisha and Haryana.

“This Investment is an apt example of a ‘Special Situation’. Given the lockdown due to COVID-19 and with the credit markets frozen, the situation required special effort in working remotely and closing an important acquisition financing, which is otherwise not available in the market. Our wide mandate allows us to participate across debt & equity, making us one of the most flexible capital providers," said Srini Sriniwasan, managing director, at Kotak Investment Advisors Ltd.

Kotak Special Situations Fund currently manages a $1 billion fund with a mandate to invest in special situations, credit and distressed space in India.