Nuvoco Vistas Corporation’s Initial Public Offering (IPO) opens today. Should we invest?
Nuvoco Vistas Corporation’s initial public offering (IPO) is open for subscription today, August 9. The Rs 5,000 crore IPO of the cement arm of the Nirma group will remain open for three days, until August 11. Rs 1,500 crore and offers for sale of Rs 3,500 crore. Nuvoco Vistas shares are expected to go public on August 23.
Burnpur Cement was the last cement listing on the Indian Stock Exchanges in November 2007.
The proceeds from the sale of shares will be used to repay debt worth Rs 1,350 crore and for general corporate purposes.
Nuvoco Vistas is the 5th largest cement manufacturer in terms of capacity. It has three verticals, viz. cement, ready-mixed concrete and modern building materials. It owns cement factories in Chhattisgarh, Rajasthan, Haryana and West Bengal, and has also diversified into building materials, including ready-mixed concrete and modern building materials.
Ultratech Cement and Shree Cement are the listed peers of Nuvoco Vistas.
ICICI Securities, Axis Capital, JP Morgan, HSBC Securities and SBI Capital are the IPO advisors of Nuvoco Vistas Corporation.
Should we invest in the IPO of Nuvoco Vistas Corporation?
“At the higher end of the IPO price range, Nuvoco Vistas Corporation Limited is offered at an Ev / Ton of 15,300, which we believe is reasonable compared to its listed peers. Financially, NVCL is supported by a strong balance sheet (i.e. net debt / equity at 0.6x, which is also below the industry average of 0.8x) and cash flow which allow NVCL to embark on the next phase of growth, ”said Anand Rathi in a note to his investors.
“Given these elements and the growth prospects in light of the push for affordable housing to achieve PMAY (Pradhan Mantri Awas Yojna) for all by 2022, investors may consider investing with a long-term perspective. Therefore, we recommend a “Subscribe (Long Term)” for this IPO, ”added Anand Rathi.