IPO analysis: Nuvoco Vistas Corporation
IPO rating: Invest for long-term
About the issue:
Nuvoco Vista Corporation Ltd, a part of Nirma Group is among one of the largest cement companies and concrete manufacturers in India. The company is coming out with its initial public offering (IPO) of equity shares with a face value of Rs 10 per equity share. The issue size of the company is Rs 5,000 crore, with a fresh issue comprising Rs 1,500 crore while the remaining include the sale of shares worth Rs 3,500 crore by existing investors, according to its red herring prospectus. The price band of the issue has been fixed at Rs 560 to Rs 570 per equity share. The IPO opening date is August 09, 2021, while it will close on August 11, 2021. It will be listed on the Exchanges on August 23, 2021. The IPO market lot size is 26 shares. A retail-individual investor can apply up to a maximum of 13 lots (338 shares or Rs 1,92,660). The net proceeds generated from the IPO will be utilised towards finance repayment/prepayment of the company's borrowings and other general corporate purposes.
Nuvoco IPO details
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IPO opening date
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August 9, 2021
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IPO closing date
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August 11, 2021
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Issue type
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Book built issue IPO
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Face value
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Rs 10 per equity share
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IPO price
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Rs 560 to Rs 570 per equity share
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Market lot
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26 shares
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Min. order quantity
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26 shares
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Listing at
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BSE & NSE
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Issue size
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[.] equity shares of Rs 10
(aggregating up to Rs 5,000.00 crore)
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Fresh issue
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[.] equity shares of Rs 10
(aggregating up to Rs 1,500.00 crore)
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Offer for sale
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[.] equity shares of Rs 10
(aggregating up to Rs 3,500.00 crore)
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About the company:
Nuvoco Vista Corporation Limited is a part of Nirma Group of Companies. It offers a diversified range of products such as cement, ready-mix concrete (RMX) & modern building materials such as adhesives, wall putty, dry plaster, cover blocks, and many more.
The company sells its products in the trade segment (individual home buyers) and non-trade segment (institutional & bulk buyers). It has a strong distribution network with 15,969 dealers and 225 CFAs.
Its cement plants are located in the states of West Bengal, Bihar, Odisha, Chhattisgarh, and Jharkhand in East India while Rajasthan & Haryana in North India with an aggregated installed capacity of 22.32 MMTPA.
Competitive strengths:
Largest cement manufacturer in East India in terms of total capacity.
Strategically located cement plants with close proximity to key markets.
Strong brand recognition and a large distribution network.
Experienced promoters & managers team.
Company financials:
Summary of financial information (restated consolidated)
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Particulars
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For the year/period ended (in crore)
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31-Mar-21
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31-Mar-20
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31-Mar-19
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31-Mar-18
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Total assets
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19,907.57
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13,444.32
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13,261.70
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13,303.78
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Total revenue
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7,522.69
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6,829.94
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7,105.89
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6,911.72
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Profit after tax
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(25.91)
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249.26
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(26.49)
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87.54
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Recommendation:
It is the fifth-largest cement company in India and the largest in East India in terms of capacity. As of December 31, 2020, its cement production capacity constituted approximately 4.2 per cent of the total cement capacity in India, 17 per cent in East India & 5 per cent in North India while it is one of the leading ready-mix concrete manufacturers in India. It is further planning to upgrade its capacities with the capital received, which will be beneficial for the company, going forward. The company has eight cement plants located in East India and three in North India. Three of its plants in East India are integrated units and five are grinding units. The company is focussing on consultancy business and spreading awareness about carbon neutrality, increase the use of technology to improve operational efficiency, and expanding its customer base. The company has a history of timely payments and delivery along with consistent quality assurance. It has multiple business verticals under one roof. With a broad customer base and qualified management team, the company has strong relationships with its clients. It is the fastest-growing cement company in terms of capacity addition on percentage terms with installed capacity doubling over the last five years post the acquisition of NU Vista. Owing to the above reasons, we recommend investing in the company’s IPO for the long term.
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