Nuvoco Vistas Corporation Limited IPO

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(i) It is the fifth-largest cement company in India and the largest cement company in East India in terms of capacity. Its cement production capacity constituted approximately 4.2% of total cement capacity in India, 17% of total cement capacity in East India, and 5% of total cement capacity in North India, and it is one of the leading ready-mix concrete manufacturers in India

(ii) It is promoted by Dr. Karsanbhai K. Patel, who is a successful entrepreneur and is associated with the Nirma Group. The Nirma Group is a diversified conglomerate that manufactures products ranging from chemicals to detergents, soaps, healthcare products, and real estate development. The Nirma Group forayed into the cement business in 2014 through a greenfield cement plant in Nimbol. Thereafter, as a part of the Nirma Group, it has grown the cement businesses, through acquisitions such as the acquisition of the Indian cement business of LafargeHolcim in 2016 and in 2020 by acquiring NU Vista.

(iii) Its Cement Plants are in the states of West Bengal, Bihar, Odisha, Chhattisgarh, and Jharkhand in East India and Rajasthan and Haryana in North India, while its RMX Plants are located across India. It 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 plants are grinding units. Two of its plants in North India are integrated units and the third is a blending unit. It operates 49 RMX Plants which are in key states in India.

(iv) It also transports clinker from its integrated Cement Plants to its grinding units via rail and road. Gypsum, coal, slag, and pet coke, which are essential raw materials for the manufacture of cement and generation of power for our captive power plants, are sourced via rail and road. 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 NUVista. We offer a range of over 50 products across cement, RMX, and modern building materials.

Competitive Strengths
(i) Largest cement manufacturing company in East India in terms of total capacity
(ii) Market-leading brands
(iii)Strategically located cement production facilities
(iv) Extensive sales, marketing, and distribution network

Objects of the Nuvoco Vistas Corporation Limited IPO:

The Offer comprises Fresh Issue and Offer for Sale -- Fresh issue aggregating up to ₹1,500 Cr and net proceeds will be used in: (i) Repayment of borrowings (ii) General corporate purposes -- Offer for sale aggregating up to ₹3,500 Cr.
DRHP of Nuvoco Vistas Corporation Limited IPO
RHP of Nuvoco Vistas Corporation Limited IPO

Nuvoco Vistas Corporation Limited IPO Details:

Open Date: Aug 09 2021
Close Date: Aug 11 2021
Total Shares: 87719298
Face Value: ₹ 10 Per Equity Share
Issue Type: Book Built
Issue Size: 5000 Cr.
Lot Size: 26 Shares
Issue Price: ₹ 560 - 570 Per Equity Share
Listing At: NSE,BSE
Listing Date: Aug 20 2021

Promoters And Management:

(i) Mr. Maneesh Agrawal, aged 46 years, is the Chief Financial Officer of the Company. He holds a bachelor’s degree in commerce from Hansraj College, University of Delhi. He is a qualified chartered accountant. He joined our Company as Chief Financial Officer with effect from October 10, 2017. He is responsible for the overall finance and information management functions of the cement, RMX, and modern building materials divisions of the Company. He has over two decades of experience primarily in cement, RMXand paper businesses. (ii) Mrs Shruta Sanghavi, aged 57 years, is the Company Secretary and Compliance Officer of the Company. She holds a bachelor’s degree in commerce and a master’s degree in commerce from the University of Bombay. She is a qualified company secretary and is also a certified associate of the Indian Institute of Bankers. She joined our Company in the year 2018 as vice president and company secretary and was appointed as the Company Secretary and Compliance Officer with effect from December 12, 2018. She is responsible for the secretarial functions of the Company. (iii) Mr. Sanjay Joshi, aged 55 years, is the Chief Manufacturing Officer of the Company. He holds a bachelor’s degree in engineering (electronics and power engineering) from Nagpur University. He joined our Company as Chief Manufacturing Officer with effect from December 10, 2018. He is responsible for the manufacturing function for the cement and RMX business line of our Company. He has experience in the cement industry. (iv) Mr Raakesh Jain, aged 48 years, is the Chief Sales Officer (cement)of the Company. He holds a bachelor’s degree in commerce from Devi Ahilya University, Indore, and a master’s degree in management studies from Vikram University, Ujjain. He joined our Company in the year 2007 and was appointed as Chief Sales Officer (cement) with effect from November 23, 2018. He is responsible for the sales of cement of the Company.

Financials of Nuvoco Vistas Corporation Limited IPO:

Financials Analysis: 1. The company revenue has not grown well in the last 3 years. It has just increased from 7000 Crores to 7488 Crores. 2. In FY21, despite of increasing the revenue, company has booked a loss of 25 Crores. The financials are not stable in the last 3 years. 3. Current Ratio is also less than 1 for FY21. This shows the trouble in the balance sheet. 4. Nuvoco has debt of 5700 Crores on balance sheet. 5. EV/EBITDA = 16.6x, which looks overvalued.

Comparison With Peers:

As per RHP, Nuvoco IPO has shown Ultratech Cement, Shree Cement, Ambuja Cement and ACC as its peers. They are currently trading at a EV/EBITDA of 17.3, 23.5, 11, and 12. And, Nuvoco is coming at EV/EBITDA of 16.6.

Recommendation on Nuvoco Vistas Corporation Limited IPO:

Review and Recommendation of Nuvoco IPO from InvestorZone is 4/10 1. NVCL is the 5th largest cement company in India and the largest cement company in East India in terms of capacity. 2. In the last 3 years, the company and whole sector have struggled. However, peers are profitable at the bottomline unlike Nuvoco, which is struggling to show profit. 3. EV/EBITDA at 16.6x looks fully priced, nothing much left for investors.

Lead Manager of Nuvoco Vistas Corporation Limited IPO:

  1. Axis Capital Limited
  2. HSBC Securities & Capital Markets Private Limited
  3. ICICI Securities Limited
  4. J.P. Morgan India Private Limited
  5. SBI Capital Markets Limited

Registrar of Nuvoco Vistas Corporation Limited IPO:

  1. Link Intime India Private Limited

Company Address:

Equinox Business Park, Tower 3, East Wing, 4th Floor, LBS Marg, Kurla (West), Mumbai - 400 070, Maharashtra, India Tel: +91 22 6769 2500

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