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Disinvestment of NCL VEKA Pvt Ltd – Context & Key Highlights by NCL Buildtek

1. Brief Background of NCL VEKA Pvt Ltd

a) Incorporated in 2008, NCL VEKA Pvt Ltd was a 50:50 joint venture between NCL Group (India) and VEKA AG (Germany).

b) The company was engaged in the manufacturing of uPVC profiles for windows and doors, catering to India’s growing infrastructure and housing sectors.

c) Over the years, NCL VEKA built a strong market presence with a wide distribution network and modern extrusion plants.

d) VEKA AG, a global leader in uPVC profiles, brought technical know-how, while NCL contributed local market knowledge and infrastructure.

2. Strategic Rationale Behind the Disinvestment

a) Over time, strategic priorities between NCL and VEKA began to diverge, leading to operational and ownership misalignment.

b) The dispute reached an arbitration phase, and an arbitral award dated 11th November 2024 mandated the full exit of NCL from the JV.

c) This paved the way for VEKA AG to become the sole owner of NCL VEKA Pvt Ltd, streamlining operations under a single global vision.

3. Disinvestment – Key Highlights The company received ₹86.48 crore as proceeds from the disinvestment of its stake in associate company NCL VEKA Pvt Ltd. The payment was received on 20th December 2024 from VEKA AG, Germany, as part of a structured transaction that involved the complete transfer of shares along with the settlement of all related financial obligations.

4. Impact on NCL Buildtek Ltd

a) The proceeds from this disinvestment boosted other income in FY25 significantly (₹48 crore in FY25 vs ₹1.5 crore in FY24).

b) This has strengthened the balance sheet and improved cash flow and return ratios for the year.

c) NCL Buildtek can now focus its capital and managerial efforts on core businesses like Coatings, Windows, Walls, and Services.

5. Investor Takeaway This disinvestment marks the end of a long-standing JV, resolving strategic conflicts and unlocking ₹86+ crore in capital. The transaction strengthens NCL Buildtek’s financial position and aligns its focus on high-growth, independently controlled segments