Nuvoco Vistas IPO plans to raise Rs 5,000-crore through a fresh issue of 8.8 crore equity shares amounting to Rs 1,500 crore and an offer-for-sale worth Rs 3,500 crore by the promoter which is part the Nirma group. Founded in 1999, Nuvoco Vista Corporation Ltd. is among one of the largest cement companies & concrete manufacturers in the country. Amount raised through Nuvoco Vistas IPO will be used to pare debt both at the company level and the promoter.
Nuvoco Vistas IPO Details:
|Bid Opens||Monday, 9th Aug, 2021|
|Bid Closes||Wednesday, 11th Aug, 2021|
|Face Value (₹)||Rs. 10/-|
|Issue Details||Fresh Issue of Equity Shares upto ₹ 1,500 Cr + OFS upto ₹ 3,500 Cr|
|Issue Size (₹ Cr)||₹ 5,000 Cr|
|Bid Lot||26 Shares|
|Price Band||₹ 560 – 570|
|Issue Structure :|
|QIB||50% of the offer|
|NIB||15% of the offer (₹ 750 Cr)|
|Retail||35% of the offer ( 30,701,754 Shares- ₹ 1,750 Cr)|
|Appls for 1x Retail||11.81 Lacs|
- ANCHOR ISSUE: Ahead of its IPO, Nuvoco Vistas IPO garnered Rs. 1,500 crores towards Anchor tranche of the initial public offering.Over 40 investors participated in the Anchor Book. Domestic investors include SBI MF, SBI Life Insurance, IPru MF, Nippon MF, Axis MF, HDFC Life, Mirae MF, Franklin Templeton MF, Premji Invest, and SBI Pension Fund, amongst others. Foreign portfolio investors such as APG AM, CI Funds, TT International, Carmignac, and Wells Capital participated in the Anchor Book.
About Nuvoco Vistas Corporation Ltd.
- Incorporated in 1999, Nuvoco Vista Corporation Ltd is part of NirmaGroup Company,
- Nuvoco Vistas commenced operations in 1999 by buying cement business of Tata Steel. Later Nuvoco added the cement business of Raymond in 2000 and the ready mix concrete business of Larsen & Toubro in 2008.
- In 2016, Nuvoco acquired the India cement business of Lafarge and in 2020 it successfully aquired the cement business of Emami (Nu Vista)
- In addition to these acquisitions, Nuvoco also commissioned its own greenfield cement plants in Chittorgarh and Nimbol in Rajasthan and later at Bhiwani in Haryana.
- At present Nuvoco has 11 cement plants spread across West Bengal, Bihar, Odisha, Chhattisgarh, Jharkhand, Rajasthan and Haryana.
- As of March-21, it has total installed cement capacity of 22.32 MT with 11 plants (eight in East, three in North). It operates cement manufacturing units in Chhattisgarh, Jharkhand, West Bengal, Rajasthan and Haryana.
- It also has 151.2 MW power plants (105 CPP, 44.7 MW WHRS and 1.5 MW solar) which caters 50.4% of its power requirements. The business
- accounted for ~84% of the company’s total sales in FY20.
- RMC: The company’s RMC business has a pan-India presence offering specialised products like Artiste and InstaMix. Nuvoco Vista Corporation is also one of the leading ready-mix concrete (RMC) manufacturers with 49 RMC plants across India.. The company has recently launched innovative products like InstaMix Mortare to supply wet-mix cement mortar in bags for all kind of masonry.
- Company’s Modern Building material product range under the Zero M and InstaMix brands comprises of construction chemicals, waterproofing agents, wall putty, tile adhesive, ready mix dry plaster and cover blocks.
- The company’s distribution channel comprised of 244 clearing & forwarding agents and 16,076 dealers.
Nuvoco Vistas IPO: Financials
|Particulars / (₹ In Cr)||2021||2020||2019|
|Revenue from Operations||7,488.84||6,793.24||7,052.13|
|Revenue Growth (%)||10.24%||-3.67%||–|
|EBITDA as stated||1,494.35||1,333.85||971.44|
|EBITDA (%) as stated||19.86%||19.53%||13.67%|
|Profit Before Tax||36.54||386.75||16.6|
|Net Profit for the period||-25.92||249.26||-26.49|
|Net Profit (% )as stated||-0.34%||3.65%||-0.37%|
|Equity Share Capital||315.09||242.36||200|
|Reserves as stated~||6,644.36||5,172.59||4,926.94|
|Net worth as stated||6,959.45||5,414.95||5,126.94|
|EPS (₹ )||-0.82||10.28||-1.09|
|Equity Post IPO||357.16|
|EPS (exclusing EO) FY21||-0.73|
|Market Cap / Sales||2.7|
- The company has the largest cement manufacturing company in East India in terms of total capacity
- Market-leading brands
- Strategically located cement plants that are in close proximity to raw materials like limestone and key markets
- Extensive sales, marketing and distribution network with diversified
- A good product portfolio
- Ablity to integrate diverse companies.
- Experienced and strong promoters.
- Impact of pandemic is uncertain,
- In past cement industry has many times seen pricing pressure
- Upward movement in the raw material prices
- Snags in asset integration and expansion
- Surplus ca[acity of cement in future or more competition
Nuvoco Vistas IPO: Assessment
- India has the lowest per capita cement consumption at 200-250 kg, which is nearly half of world average of 500-550 kg.
- Crisil expects cement demand to increase at a faster pace of about 6.5% against a moderate pace of about 5% CAGR in the
- past five years.
- The company sold 17.26 MT of cement in FY21. Of this, 13.47 MT sales were in East India, 2.66 MT in North India and 1.13 MMT in Central region.
- Birla Corporation and Nuvoco Vistas Corp were the only large/mid player to operate at a healthy utilization level of 90% or above in FY20.
- Diversified business portfolio of company include: Cement, RMC, Building materials:
- Nuvoco has well recognized cement brands in the market like Concreto, Duraguard and Double Bull.
- Nuvoco largely focuses on trade segment and mainly caters to individual home buyers. It generates 73% of it cement sales from this segment, as compared to average of 65-68% for other vendors.
- The IPO was last reported to be commanding a meager GMP of about Rs. 15.
- With an Enterprise value of about Rs. 25,000 cr, Nuvoco’s EV of $143/MT, as well as EV/EBITDA of 11x, is slightly lower than other large capacity cement makers like, Ultratech Shree cements, Ambuja , ACC , Dalmia Bharat etc. even as many of these large players have much better financials and performance.
- Iam positive on the prospects of Nuvoco Vistas IPO on a long-term basis only and listing gains are not assured.
- Nuvoco Vistas IPO does not promise much on listing but is on my radar due to strong sector-wise demand outlook, good show by many cement companies. I there is adequate response to issue from QIBs, I shall apply for the IPO in small measure.
Standard disclaimer: I am not a SEBI registered analyst and above analysis is for educational purpose only. Iam a postgraduate in engineering & Management . Also Certified in some exams like NISM-Series-V-A: Mutual Fund Distributors Certification, NISM-Series-X-A: Investment Adviser (Level 1) Certification and NISM-Series-X-B: Investment Adviser (Level 2) Examination. This post is my view on the subject matter and is only academic and exploratory in nature. It is not meant to influence investment decisions of investors. I may have bias/vested interest in covered Stock/Mutual Funds/NCD etc. due to my own investment or leaning. Further my understanding of the areas on which I write may be imperfect or incomplete and data could be wrong due to limited time and resources at my disposal. Please do your own due diligence as stock market/MF investments have high degree of inherent risk.