Vardhman Polytex Issues ₹75 Crore NCDs at 18% Interest Rate

Vardhman Polytex Limited has allotted 7,500 Secured, Rated, Listed, Redeemable Non-Convertible Debentures (NCDs) worth ₹75 crore. The debentures carry a high annual interest rate of 18% and were placed privately with Special Situation India Fund. They are scheduled for listing on the BSE.

This debt issuance comes as Vardhman Polytex faces significant financial challenges. The company reported a negative net worth of ₹-220.6 crore as of early 2026, meaning its liabilities were greater than its assets. Adding to these problems, Vardhman Polytex disclosed defaults totaling ₹29.67 crore on its bank loans as of December 2025, representing more than half of its outstanding banking facilities.

Credit rating agency ICRA previously withdrew Vardhman Polytex's credit rating at the company's request. MarketsMojo also assigns the company a 'Strong Sell' rating, citing poor financial trends and weak quality assessment.

Impact on Finances

The new ₹75 crore debt adds to Vardhman Polytex's financial obligations. The high 18% annual interest rate on these NCDs will increase the company's finance costs, potentially pressuring its profitability. Investors will closely monitor the company's ability to service this new debt alongside its existing obligations.

Industry Context

Vardhman Polytex operates in the textile sector alongside companies such as Raymond Ltd., RSWM Ltd., Trident Ltd., and Indo Count Industries Ltd. While its peers navigate the competitive market, Vardhman Polytex's severe financial issues—including its negative net worth and recent loan defaults—set it apart and place it in a particularly challenging position.

Key Financial Metrics

• The company's Debt to Equity Ratio was -169.1% on a trailing twelve-month (TTM) standalone basis, largely due to its negative equity.
• Its Total Debt to Total Capital ratio stood at 53.3% on a TTM basis.
• The Interest Coverage Ratio was a low 1.4x (TTM), showing difficulty covering interest payments from operating profits.
• Vardhman Polytex reported contingent liabilities of ₹153 crore.

Investor Focus

Moving forward, investors will track the successful listing of these NCDs on the BSE. Key areas of interest will include any further disclosures on debt resolution plans with existing lenders, upcoming financial results for signs of improved performance, and the company's operational execution in managing its working capital.