Nuvoco Vistas Corporation Ltd IPO details – Date, Price, Size, Allotment Status, Subscription

IPO-Note	Nuvoco Vistas Corporation Ltd
Rs-560- Rs570per Equity share	Recommendation: Subscribe

Company Profile: –

Nuvoco Vistas Corporation Limiteda Nirma group company is the 5th largest cement company in India and the largest cement company in East India in terms of capacity.As of December 31, 2020, their cement production capacity constituted approximately 4.2% of total cement capacity in India, 17% of total cement capacity in East India.Company’s products include Cement, RMX and modern building materials. It has around 11% market share in the eastern market.As of March 31, 2021, NVCL has 11 Cement Plants (8 in East India and 3 in North India) with aninstalled capacity of 22.32 MMTPA. 3 of their plants in East India are integrated units and 5 plants are grinding units. 2 of their plants in North India are integrated units and the third is a blending unit. It distributes its products through the trade segment, which mainly caters to individual home buyers and the non-trade segment, which is mainly via direct sales to institutional and bulk buyers.

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Issue Details
bjects of the issue	·          Repayment/prepayment/redemption, in full or part, of certain borrowings availed of by the company ·          General corporate purposes.
Issue Size	Total issue Size -Rs. 5000Cr. Offer for Sale – Rs. 3500Cr. Fresh Issue – Rs. 1500 Cr
Face value	Rs.10.00 Per Equity Share
Issue Price	Rs. 560 – Rs. 570
Bid Lot	26shares
Listing at	BSE, NSE
Issue Opens:	9thAug, 2021 – 11th Aug, 2021
QIB	50% of Net Issue Offer
Retail	35% of Net Issue Offer
NIB	15% of Net Issue Offer

Financial Performance:

 

Shareholding Pattern:

Shareholding Pattern	Pre- Issue	Post Issue
Promoters & Promoter Group	95.24%	71.03%
Public	4.76%	28.97%

 

Strengths:

• Largestcement manufacturing co. in East India in terms of total capacity
• Strategically located cement production facilities that are in close proximity to raw materials and key markets
• Growth in the business and operations from the acquisition of NU Vista
• Market-leading brands that establish and enhance leadership

Key Highlights:

• Revenue from Operations declined3.6% from FY19 to FY20 howeverincreased10% from FY20 to FY21.
• EBITDA Margin was 19.86% in FY21 vs 19.53% in FY20
• Interest and Depreciation cost increased 58% and 50% respectively in FY21 and constitute 19.5% of Net Sales against 12.6% in FY20.
• Cement contributed 94.91% while the RMX contributed 5.08% to the total sales in FY21
• Compared with peers its EBITDA margin is low (FY21 peers avg. is 24-25%). It has guided to increase EBITDA/t of Rs. 966 by 20% in the next 2 years.

Risk Factors:

• Heavy dependency on limestones for manufacturing plants. Changes in mining policies may affect the business
• High regional concentration with more than 70% sales volume from the East
• Completed acquisition of Emami’s cement businessat an enterprise value of Rs. 5,500 crores in July 2020. All the acquisitions in past were majorly funded through debt.

Outlook:

Nuvoco Vistais the fastest growing cement company in terms of capacity addition on percentage terms with installed capacity 22.32 MMTPAdoublingover the last five years post the acquisition of NU Vistathe cement business (8.3 MMTPA) of Emami Group.It also looking for an organic expansion of 2.7 mtpa (12 per cent addition) in eastern India over FY22 and FY23.Its products have been awarded some of the highest regulatory ratings owing to its constant emphasis on delivering superior grade cement variants like Concreto, Duraguard, and PSC. Due to acquisitions its FY21 Net Debt/EBITDA is high at 4.5x which the company has guided to reduce to 1.2x in the next 2 years. Debt reduction will be driven by proceed of IPO and internal accruals. At the higher price band of Rs 570, the offer is made at EV/EBITDA of 18.1 times on Post Issue equity basis. Some of theListed industry peersof the company are Shree Cement trades at 23.86 times EV/EBITDA, Dalmia BharatLtdtrades at 6.54 times EV/EBITDA and Ultratech trades at 17.47 times. We recommend Subscribe to the IPO for longer term.

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