Nuvoco Vistas Corporation Limited made a tepid debut on the bourses on Monday. The weak listing was in line with a muted debut of CarTrade Tech Limited share last week. Nuvoco Vistas share got listed at Rs 471 on BSE, a 17.37 per cent down to its issue price of Rs 570. On NSE, the share opened at Rs 485, down 14.91 per cent. Nuvoco Vistas’ Rs 5,000-crore offer had comprised a fresh issue of Rs 1,500 crore and an offer for sale of Rs 3,500 crore by promoter Niyogi Enterprise. The fresh issue will be used for repaying of debts.
Nuvoco Vistas initial public offering (IPO) saw a muted response from the investors. The issue was subscribed 1.71 times when it opened for investors during August 9-11. The portion reserved for qualified institutional buyers was booked 4.23 times. The response from non-institutional investors (66 percent) and retail investors (73 percent) was weak.
Nuvoco Vistas Corporation Limited is the fifth-largest cement player and the largest in East India in terms of capacity. It offers a range of over 50 products across cement, RMX and modern building materials. Nuvoco distributes its products through the trade segment, which mainly caters to individual home buyers (trade segment), and the non-trade segment, which is mainly via direct sales to institutional and bulk buyers.
“Nuvoco Vistas Corporation Ltd. established record of strong performance and reputation for quality products in cement, RMX and modern building materials has helped the company build reputable brands in the building materials industry in India. Its strategically located plants allow the company to sell and market its products across nearby regions. Moreover, it has a wide distribution network and a diversified product portfolio. Going forward, the company plans to strengthen its position in east, north and central India,” said Religare Broking in a note.
“Further, it intends to increase its portfolio of premium products which would aid margins. It also plans to increase operational efficiencies and strengthen its brand presence and distribution network. The financial performance has been tepid for the company. However, with a strong focus on improving margins and positive industry growth prospects, we have a positive view for the long term,” it added.
“In FY21, Revenue/EBITDA grew by 10.2 percent and 12.6 per cent respectively, aided by robust cement demand and acquisition of Emami Cement. Over FY18-21, NVCL EBITDA grew at 11 per cent CAGR (though revenue was flat at 3 per cent CAGR), supported by margin expansion of 395 bps to 19.5 per cent. Despite healthy operational performance, higher depreciation and interest cost has led to inconsistent performance at the PAT level. With the repayment of debt from the IPO proceeds and synergy benefits playing out from the recent acquisition, the profitability is expected to improve going ahead,” said Motilal Oswal.
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