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NUVOCO VISTAS IPO

  • Writer: The Shareholder
    The Shareholder
  • Aug 8, 2021
  • 2 min read


IPO Details:

Price Band: 560-570

Cutoff Price: 570


About Company:


Nuvoco is the fifth 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 and 5% of total cement capacity in North India, and we are one of the leading ready-mix concrete manufacturers in India.


Competitive Strengths:

  1. Largest cement manufacturing company in East India in terms of total capacity.

  2. Market-leading brands that establish and enhance the leadership as a building materials company with strong brand recognition.

  3. Strategically located cement production facilities that are in proximity to raw materials and key markets.

  4. Extensive sales, marketing and distribution network with diversified product portfolio.

  5. Growth in our business and operations from acquisitions and, in particular, the recently concluded acquisition of NU Vista.

  6. Strong research and development and technological capabilities.

  7. Experienced Individual Promoter and professional management team.


Strategies:

  1. Consolidate and grow the market share in East, North and Central India.

  2. Increase the portfolio of premium products and profit margins.

  3. Focus on operational efficiencies and synergies to improve returns, whilst expanding manufacturing capabilities.

  4. Strengthen the brand and expand our distribution network.

  5. Growth through expanding operations and through acquisitions.

  6. Complete the integration of the NU Vista cement business with the business.


Financial Performance:


Company's revenue is increasing but company is not in profit and also earning per share is negative for FY 21.


Objects of the Issue:


The Net Proceeds from the Issue are proposed to be utilised in the following manner:

  1. Offer for Sale

Competitors Comparison:

Nuvoco Vistas EPS is negative and P/E can't be compared. P/B value of Nuvoco is lesser than the industry average, which is a good sign.


Grey Market Premium:


Our view: GMP of the IPO is less and also company is not profitable. I would avoid this IPO and won't apply for this.


Disclaimer: Views are shared for an educational purpose. Please consult your financial advisor or planner before taking any action based on the views or facts shared on this blog.

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