Important Information Of The Nuvoco Vistas Corporation IPO To Consider

Important Information Of The Nuvoco Vistas Corporation IPO To Consider

The Nuvoco Vistas Corporation IPO (Initial Public Offerings), which is a portion of Nirma Group Company, was issued on 9th August, Monday. The company is aiming to raise Rs 5000 crore through share sale issues. This company is the fifth biggest manufacturer of cement in India as per capacity, and the biggest manufacturer in East India.

Let Us Have A Look At The Nuvoco Vistas IPO Details

This IPO is a combination of an offer for sale which is of Rs 3500 crore and a fresh issue worth Rs 1,500 crore. The company will not get any proceeds from the portion of OFS. The freshly issued money of Rs 1350 crore will be used in repayment of debts and the remaining money for other corporate purposes. 

The Nuvoco Vistas IPO share price is within Rs 560 – Rs 570 per share and the shares are valued at 180.5X of FY21 EBITDA/EV and $164 FY21 tonne/EV, which seems reasonable when compared with its competitors, say the analysts. From anchor investors, the company raised Rs 1,500 crore more than the Nuvoco Vistas IPO price.

Financial Snapshot Of Nuvoco Vistas Corporation IPO

As of 31 December 2020, the cement production of Nuvoco cement constituted for 4.2% of the total capacity in India. Along with that, this firm is also one of the best ready mix manufacturers of concrete with 49 RMC plants all over India. The cash flow generation of the company has been impressive with its cumulative FCF and OCF residing at Rs 1900 crore and Rs 3600 crore respectively. 

Through FY18-21, the EBITDA of Nuvoco increased at 11% CAGR that has been aided by the expansion of a margin of 395 bps to 19.5%. Despite higher depreciation, healthy functional performance and interest cost have resulted in two out of four fiscals over the Financial Year 18-21. 

The profitability of this firm after the repayment of debt and gaining synergy benefits are expected to improve the future growth. 

Analysts Take On Nuvoco Vistas Corporation IPO

So if you are wondering, Nuvoco Vistas IPO should I Buy? Then here is your answer. Let us have a look at what the analysts of various firms have to say about the Nuvoco Vistas Corporation IPO.

Motilal Oswal Financial Services: “Subscribe for long-term”

According to Motilal Oswal Financial Services, they like Nuvoco Vistas Corporation Limited for their leadership hold in the rapidly evolving East market, a wide portfolio of premium products, and the ability to integrate successfully the large acquisitions. As NVCL’s existence history is short, they believe that in the long run, it has the power to boost its financials and be at par with its peers as the functioning leverages come in. It is expected to witness steady and strong improvements moving ahead that are conducted by growth plans, integration of debt reduction, and NU Vista.

Reliance Securities: “Subscribe”

Reliance Securities believes in the prevailing integration of functions, the latest increase in realization in the Eastern region, and a strong development in the utilization of capacity are likely to help the operating performance of the company. Along with that, reducing the debt and expanding the capacity is likely to help NVCL to witness a remarkable development in net profit in the upcoming years.

Choice Broking: “Subscribe for long-term”

With positive macros like continued government focus on the construction of infrastructure, recovering the real estate industry, and lower per capita consumption on the national levels, the industry will prevail to have a growth trend that is considered to be secular in nature. NVCL with its high growth presence in East and Central India and a key aim in the trading sector is likely to benefit from this sector’s benefits. 

Conclusion

The Nuvoco Vistas Corporation IPO is going to bring new prospects for this industry. According to many analysts, this is worth buying. According to an analysts,

"At the upper end of the IPO price band, Nuvoco Vistas Corporation Limited is offered at an Ev/Tonne of 15300, which we believe is reasonably priced compared to its listed peers. On the financial front, NVCL is backed by a sound balance sheet (i.e. net debt/equity at 0.6x which is also below the industry average of 0.8x) and steady cash flows which make NVCL embark on the next round of growth."

Yaseer Rashid

Yaseer Rashid got a degree in Journalism and worked as a freelancer. Later he joined News Magnify as a Business and stock writer.

1 Comment

  • I consider, that you are right.

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