Shree Digvijay Cement Secures ₹488 Cr Loan for Expansion

Introduction

Shree Digvijay Cement Company Limited is advancing its expansion strategy, backed by a significant new credit facility and a key partnership. The company has secured term loans totaling ₹488 crore from ICICI Bank and Axis Bank to finance a strategic agreement with Hi-Bond Cement and to fund the construction of a new cement mill. This move follows a recent change in ownership and signals a clear intent to strengthen its market position in Gujarat. The company confirmed these developments and discussed its business outlook during an investor conference call on March 25, 2026.

Details of the New Funding

On March 12, 2026, Shree Digvijay Cement executed facility agreements for the ₹488 crore loan. The capital is allocated for two primary purposes. A substantial portion, ₹400 crore, is designated as a refundable security deposit for a Brand Usage, Supply and Distributorship Agreement (BDA) with Hi-Bond Cement (India) Private Limited. The remaining ₹132 crore is earmarked for financing or refinancing a new cement mill, a project aimed at increasing the company's manufacturing capacity.

The funding for the security deposit is structured with contributions from both banks and the company's internal resources. ICICI Bank and Axis Bank are each providing ₹178 crore, while Shree Digvijay Cement will contribute the remaining ₹44 crore from its own cash flow.

The Strategic Alliance with Hi-Bond Cement

The partnership with Hi-Bond Cement is a cornerstone of Shree Digvijay's growth plan. The 10-year exclusive agreement grants Shree Digvijay the rights to distribute 100% of Hi-Bond's cement output. This deal is projected to generate approximately ₹600 crore in annual revenue. Operations under this agreement officially commenced on March 19, 2026.

This alliance effectively combines Shree Digvijay's existing 3.0 MTPA capacity with Hi-Bond's 2.2 MTPA, giving the company access to a total capacity of 5.2 MTPA. This positions Shree Digvijay among the leading cement players in the competitive Gujarat market. Furthermore, the agreement includes a call option that allows Shree Digvijay to acquire a 100% stake in Hi-Bond within eight years at fair market value, providing a clear path to full integration.

Ownership Change and Market Context

These strategic moves are being implemented under new ownership. In December 2025, India Resurgence Fund (IndiaRF), an investment platform backed by Piramal Group and Bain Capital, acquired a 45.01% stake in the company from private equity firm True North for approximately ₹579 crore. This transaction triggered a mandatory open offer for an additional 26% of the company's shares, positioning IndiaRF as the new controlling investor. The acquisition and the subsequent partnership with Hi-Bond received approval from the Competition Commission of India (CCI) in November 2025.

Financial Position and Future Outlook

As of the end of fiscal year 2025, Shree Digvijay Cement had an installed capacity of approximately 3.2 MTPA and a debt-to-equity ratio of around 0.7. The new debt facility will moderately increase the company's leverage, but it provides the financial flexibility needed to execute its growth projects. The company also operates a captive seaport capable of handling 3,000–5,000 DWT vessels, which provides a significant logistical advantage for both import and export operations.

Investors and market analysts will be closely monitoring several key developments. The timely receipt of all remaining regulatory approvals for the Hi-Bond BDA is crucial. Additionally, the projected timeline for the commissioning of the new cement mill will be a key indicator of the company's execution capabilities. The financial impact of the new debt on profitability and leverage ratios will also be under scrutiny as the benefits of the expansion begin to materialize.