Nuvoco Vistas will open its public issue for bidding during August 9-11.
Cement major Nuvoco Vistas Corporation will launch its initial public offering (IPO) next week. This will be the fourth-largest IPO of 2021.
Here are 10 key things to know before subscribing to the issue:
1) IPO Dates
Nuvoco Vistas will open its public issue for bidding during August 9-11.
2) Price Band
The price band for the offer has been fixed at Rs 560-570 per equity share.
3) Public Issue
The company plans to raise Rs 5,000 crore through its public offer comprising a fresh issuance of Rs 1,500 crore and an offer for sale of Rs 3,500 crore by promoter Niyogi Enterprise. It has already raised Rs 1,500 crore from anchor investors on August 6
4) Objects Of Issue
Nuvoco Vistas intends to utilize the net proceeds of Rs 1,350 crore from the fresh issue for repaying (in part or full) of certain borrowings and general corporate purposes.
5) Lot Size and Investors’ Reserved Portion
The minimum bid lot is 26 equity shares and in multiples of 26 equity shares thereafter. Retail investors can make a minimum investment of Rs 14,820 per lot, and a maximum investment of Rs 1,92,660 for 13 lots.
Half of the offer is reserved for allocation to qualified institutional buyers, 15 percent for non-institutional investors, and the remaining 35 percent for retail individual investors.
6) Company Profile
Nuvoco Vistas is the fifth largest cement company in India and the largest cement company in East India in terms of capacity. It offers a range of over 50 products across cement, RMX (ready mix concrete) and modern building materials. As of December 2020, its cement production capacity constituted approximately 4.2 percent of the total cement capacity in India. Also, it is one of the leading ready-mix concrete manufacturers in India.
The company is promoted by Dr Karsanbhai K Patel and is associated with the Nirma Group. The Nirma Group forayed into the cement business in 2014 through a greenfield cement plant in Nimbol. Thereafter, as a part of the Nirma Group, it has grown the cement businesses, through acquisitions such as the acquisition of the Indian cement business of LafargeHolcim in 2016 and NU Vista in 2020. Earlier, in February 2020, they completed the merger of the cement undertaking of Nirma at Nimbol, Rajasthan with Nuvoco Vistas.
As of March 2021, it has 11 cement plants (eight in East India and three in North India), having an installed capacity of 22.32 million tonnes per annum (MMTPA). It is also one of the leading ready-mix concrete manufacturers with 49 RMX plants across India. It has waste heat recovery systems at all integrated plants with a total capacity of 44.7 MW, solar power plants with a total capacity of 1.5 MW and captive power plants with generation capacity of 105 MW. As of March 2021, these plants generate 50.43 percent (on a proforma basis) of its total power requirements.
7) Strengths and Strategies
a) Largest cement manufacturer in East India with a capacity share of approximately 17 percent in terms of consolidated capacity in East India.
b) Established record of strong performance and reputation for quality products in cement, RMX and modern building materials has helped it build reputable brands in the building materials industry in India.
c) Strategically located cement production facilities that are in close proximity to raw materials and key markets.
d) Strong sales, marketing and distribution capabilities in East and North India, and strategic access to some key markets in Central India, with diversified product portfolio.
e) It has grown manufacturing capacity, sales and distribution network, and market position through acquisitions over time including the recently concluded acquisition of NU Vista.
f) Strong research and development and technological capabilities.
g) Experienced promoter and professional management team.
Strategies
a) It intends to consolidate and grow market share in East, North and Central India.
b) Increase portfolio of premium products and profit margins.
c) Focus on operational efficiencies and synergies to improve returns, whilst expanding manufacturing capabilities.
d) Strengthen brand and expand its distribution network.
e) Grow business through expanding operations and through acquisitions.
8) Financials and Peer Comparison
During FY19-FY21, Nuvoco Vistas Corporation’s revenues grew at a CAGR of 3 percent, and operating profit at 26 percent CAGR. It reported a loss of Rs 26 crore each in FY19 and FY21 but posted a profit at Rs 249 crore in FY20.
Overall financials in FY21 are not comparable to FY20 as the company incorporated the acquisition of Nu Vista in FY21.
In terms of volumes, the company sold 17.26 million tonnes of cement in the financial year FY21, comprising 13.47 million tonnes sales in East India, 2.66 million tonnes in North India and 1.13 MMT in Central India
9) Promoters and Management
Niyogi Enterprise and Dr Karsanbhai K Patel are the promoters of the company, owning 89.99 percent of the pre-offer paid-up equity. Also as a part of the promoter group, Hiren Patel and Rakesh Patel hold 5.06 percent stake in the company, while under public shareholders, Kotak Special Situations Fund owns 4.76 percent stake in the company.
Dr Karsanbhai K Patel is the founder and promoter of Nirma group, which is engaged in manufacturing of diversified products including chemicals like soda ash, caustic soda and linear alkyl benzene, cement, healthcare, and consumer goods like detergents, soaps and edible salt. He has several years of experience in cement, consumer goods, chemicals and the healthcare industry. He is a director on the boards of Nirma Limited, Nirma Chemical Works, Nirma Industries, Niyogi Enterprise, and Nirma Credit and Capital.
Hiren Patel is the Chairman and a Non-executive Director of the company. He has been on the Board since November 11, 2017. He has been associated with the Nirma group since the year 1997. He has experience in the cement, consumer goods, chemicals and health care industry. He is presently the managing director of Nirma.
Jayakumar Krishnaswamy is the Managing Director of the company. He has been on the Board since September 17, 2018. He is responsible for the cement, RMX and modern building materials divisions of the company. He has previously been associated with Hindustan Unilever and Akzo Nobel India.
Kaushikbhai Patel is a Non-executive Director of the company. He has been on the Board since November 9, 2017. He has experience in strategy, financial planning, mergers and acquisitions, direct tax and capital markets. He has been associated with Nirma since 2002.
Berjis Desai, Bhavna Doshi, and Achal Bakeri are Independent Directors of the company.
Maneesh Agrawal is the Chief Financial Officer of the company. He joined the company as Chief Financial Officer with effect from October 10, 2017. He is responsible for the overall finance and information management functions of the cement, RMX and modern building materials divisions of the company. He has over two decades of experience primarily in cement, RMX and paper businesses. He has previously been associated with Dalmia Bharat and Ballarpur Industries.
Sanjay Joshi is the Chief Manufacturing Officer of the company. He joined the company as Chief Manufacturing Officer with effect from December 10, 2018. He is responsible for the manufacturing function for the cement and RMX business line of the company. He has experience in the cement industry. He has previously been associated with Larsen & Toubro, Thermax, Tata Iron and Steel Company (later acquired by Lafarge India) and Century Textiles & Industries.
Raakesh Jain is the Chief Sales Officer (cement) of the company. He joined the company in the year 2007 and was appointed as Chief Sales Officer (cement) with effect from November 23, 2018. He is responsible for the sales of cement of the company. He has experience in sales and marketing of cement manufacturing companies. He has previously been associated with Grasim Industries (white cement division), Indian Rayon and Industries (currently known as Aditya Birla Nuvo) (white cement division) and Dhar Cement.
Madhumita Basu is the Chief Strategy & Marketing Officer of the company. She joined the company in the year 2010 as senior vice president – marketing and was appointed as the Chief Strategy & Marketing Officer with effect from July 1, 2020. She is responsible for strategy and marketing for all businesses of the company. She is also responsible for heading the innovation at Construction Development and Innovation Centre of the company. She has experience in strategic planning, sales, marketing, business development and IT. She has previously been associated with Chloride Industries, Exide Industries and Eveready Industries India.
10) Allotment, refunds and listing dates
Nuvoco Vistas will finalise the basis of allotment on August 17 and will initiate refunds or unblocking of funds on August 18.
Equity shares will be credited to demat accounts of eligible investors on August 20, while the trading in equity shares will begin from August 23.Equity shares will list on both BSE and NSE. ICICI Securities, Axis Capital, HSBC Securities and Capital Markets (India), JP Morgan India and SBI Capital Markets are the book running lead managers to the offer.
