Zuari Infraworld India Limited (Zuari Infra), a wholly-owned subsidiary of Zuari Industries Limited (ZIL), has signed a Binding Term Sheet with Texmaco Rail & Engineering Limited (Texmaco) for a long-term development management partnership. This agreement marks a major milestone in the real estate and infrastructure development sector, with a projected Development Management Fee of ₹130 crore over the next 10 years.

Let’s break down the details of this significant transaction and what it means for both companies, stakeholders, and the real estate market in West Bengal.

Scope of the Agreement

Under the agreement, Zuari Infra will act as the Development Manager (DM) for a mixed-use development project on Texmaco’s land situated at Agarpara Mouza, Barrackpore-2 Block, 24 Parganas (North), West Bengal. The development management services will include:

• Project Design and Coordination

• Building Plan Approvals

• Construction Supervision

• Marketing & Sales Oversight

• Retail & School Brand Tie-ups

• Collections and Project Handover

This makes Zuari Infra responsible for end-to-end project lifecycle management, showcasing its capability and vision in large-scale real estate projects.

Financials of the Deal

The total projected Development Management Fee for Zuari Infra is expected to be ₹130 crore, which will be accrued over a 10-year period. This long-term financial commitment not only underlines the scale of the project but also reflects Zuari Infra’s role in transforming this land parcel into a vibrant real estate hub.

Validity of the Binding Term Sheet

The signed Binding Term Sheet between the two entities will remain valid for six months or until the Development Management Agreement (DMA) is executed — whichever comes first. This interim agreement allows both parties to proceed with initial planning and approvals while working towards finalising the detailed contract.

Related Party Transaction: Corporate Governance in Focus

One of the most notable disclosures in this announcement is that this deal qualifies as a related party transaction. Here's how:

• Zuari Infra is a wholly-owned subsidiary of Zuari Industries Limited (ZIL).

• Texmaco, on the other hand, is related to ZIL through Mr. Saroj Kumar Poddar, who serves as the Chairman of both companies and holds more than 2% of Texmaco’s paid-up share capital.

Despite this connection, the transaction is being executed at arm’s length, complying with Section 188 of the Companies Act, 2013, ensuring that corporate governance standards are upheld. The disclosure highlights that there are no nominee directors involved, and no potential conflict of interest has been flagged as per the current agreement.

Key Terms and Conditions Outlined

Apart from the development scope and financials, the agreement lays out key obligations and assurances by both parties:

• Texmaco will ensure a clear and marketable title to the land, along with required project funding and compliance with all applicable regulations.

• Zuari Infra will manage all aspects of execution, including construction, marketing strategies, brand collaborations, and customer handovers.

This well-structured delegation ensures that while the landowner (Texmaco) focuses on ownership and investment aspects, the development partner (Zuari Infra) takes charge of delivering a market-ready, fully approved project.

Implications for the West Bengal Real Estate Market

This move is a positive indicator for the real estate and infrastructure market in West Bengal, particularly in the 24 Parganas region, which is witnessing growing demand for integrated and mixed-use developments. With the involvement of major players like Zuari and Texmaco, the region is likely to see:

• Improved infrastructure and housing options

• Boosted employment during the construction phase

• Potential uplift in property values in the surrounding areas

Moreover, the inclusion of retail and school brands within the project will support the creation of a sustainable urban ecosystem, aligning with modern development trends.

Transparency and Compliance Prioritised

In line with SEBI regulations and the Companies Act, all necessary disclosures regarding the nature of the agreement, financial involvement, and corporate relationships have been made. The transaction reflects ethical governance, compliance-driven decision-making, and a strategic vision to leverage synergies between group companies.

By ensuring the transaction is done at arm’s length, Zuari Industries has set a benchmark for transparent related party collaborations, which is particularly important in the eyes of investors, regulatory bodies, and corporate governance analysts.

No Equity or Loan Transactions Involved

The deal is not equity-based, meaning no shares have been issued to either party as part of this agreement. Additionally, no loans have been granted or taken, and the arrangement purely revolves around development service fees over time, which keeps the financial structure clean and straightforward.

Conclusion

This binding agreement between Zuari Infra and Texmaco Rail & Engineering Ltd. is a landmark collaboration in the infrastructure and real estate space, especially for East India. With an estimated project management fee of ₹130 crore, it represents a mutually beneficial opportunity that leverages Zuari Infra’s expertise in real estate execution and Texmaco’s asset base.

By maintaining regulatory transparency, corporate integrity, and strategic alignment, this transaction could pave the way for similar partnerships in the future — not just within the group, but across the industry.

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