Nuvoco Vistas IPO Opens Today: The Nuvoco Vistas initial public offering (IPO) opened on Monday. The company is planning to raise Rs 5,000 crore through its public issue this week. The Nuvoco Vistas Limited company was incorporated in 1999 and is a part of the Nirma Group of Companies. It is one of the largest cement and concrete manufacturers in India with a diverse range of products that are supported by a diverse range of traders. Its trade network is well-established and quite diverse. The IPO will be the fourth largest of its kind to make a debut in the market in 2021 so far. With the Nuvoco Vistas IPO at the door, here are a few key details you should know before diving in to invest and subscribe.
1) The Nuvoco Vistas IPO Size, Fresh Issue and Overview
The Nuvoco Vistas IPO has a considerable issue size of Rs 5,000 crore which is further broken down into a fresh issue and an offer for sale (OFS). The fresh issue of the IPO stands at a large Rs 1,500 crore, while the OFS for the issue maintains a robust Rs 3,500 crore worth with a Rs 10 per equity share face value.
2) Important Pre-IPO Dates
The Nuvoco Vistas IPO opened the issue on the public market on August 9 and is planning to close subscription and trading on August 11, 2021. The anchor investments for the issue had taken place on August 6, where the company managed to raise Rs 1,500 from the anchor investors.
3) Price Band for the Nuvoco Vistas IPO
The issue has an IPO price band of Rs 560 to Rs 570 per equity share with a Rs 10 per equity share as the face value. The company is looking to mop up Rs 5,000 at the upper end of the price band which is Rs 570 per share.
4) Nuvoco Vistas IPO Grey Market Premium
The grey market premium (GMP) of the company’s issue stood at Rs 40 on the opening day of the issue. This indicated that the shares were trading at Rs 600 to Rs 610 on the unlisted grey market.
5) Nuvoco Vistas IPO Allotment, Listing Details
The company plans to get its basis of allotment done on August 17, 2021. The initial refunds of failed subscriptions would likely take place on August 18. The lucky bidders who manage to snag the shares that they were gunning for, could expect the shares the be credited to their Demat accounts on August 20, tentatively. The listing date for the Nuvoco Vistas IPO is likely to be August 23, however, this is not yet confirmed.
6) Object of the Issue
The company aims to use the proceeds from the issue to repay, prepay and redeem borrowings that were availed by the firm. This will be done either fully or partially. The rest of the funds will go towards general corporate purposes.
7) Nuvoco Vistas IPO Lot Size and Reservation
The issue has a lot size of 26 shares as the minimum and a matching Rs 14,820 for the baseline application fare. On the higher end, the lot size stands at 338 shares with Rs 192,660 as the allotment application cut-off price. Retail investors can apply for up to 13 lots at the upper end of the lot. As far as reservations go, the qualified institutional buyers (QIBs) and the non-institutional investors (NIIs) have a reservation of 50 per cent and 15 per cent respectively. The retail investors have a 35 per cent reservation of shares.
8) Company Profile
The Nuvoco Vistas company has a wide range of products such as cement, Ready-mix Concrete (RMX) as well as modern building materials like adhesives, wall putty, dry plaster and cover blocks to name a few. The company sells its products to individual homebuyers in the trade segment as well as the non-trade segment, which includes institutional buyers and bulk buyers. It has a strong distribution network of 15,969 dealers and 225 CFAs. It has facilities in the states of West Bengal, Bihar, Odisha, Chhattisgarh, and Jharkhand in East India and Rajasthan and Haryana in North India.
9) Company Financials
The company ended FY21 in loss due to the Covid-19 pandemic and the ensuing disruptions to the market, according to a Bloomberg report. It generated Rs 7,488.80 crore from operations in FY21, which was higher than that of FY20 with Rs 6,793.2 crore. The EBITDA for the mentioned period also went up from Rs 1,297.10 crore in FY20 to Rs 1,460.50 in FY21 according to Bloomberg.
10) Nuvoco Vistas Company Strengths
It has the distinct advantage of being one of the largest cement manufacturers in India, in terms of capacity. The plants are located strategically and within a close range to key markets. The brand has strong recognition and is supported by a large distribution network. It also has an experienced team of promoters and managers. The promoters for this issue are Niyogi Enterprises Pvt Ltd and Karsanbhai K Patel.
Speaking on the issue, IDBI captial said, “Nuvoco is looking for an organic expansion of 2.7 mtpa (12 per cent addition) in eastern India over FY22 and FY23. We understand at the upper band, Nuvoco IPO is priced at EV/tonne of $131. That valuation is at a discount to its largecap peers at 12-19 times FY23 EV/Ebitda. This discount, however, partially factors a high debt on its books — net debt / Ebitda of 4.5 times FY21, and also a low ROCE.”
“But given the upcycle in the cement industry and expectation of margin improvement and balance sheet deleveraging over FY21-23, we recommend a ‘subscribe’ rating to the issue,” the brokerage said.
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