Nuvoco Vistas IPO : Subscribe or NOT?

The data has been compiled from various sources and might have small difference but overall theme is to subscribe or not — we will focus on that

Nuvoco Vistas Corporation IPO-The company was incorporated as ‘Infra Cement India Private Limited’on February 8, 1999. Nuvoco Vistas Corporation Limited (“NVCL”) is the 5 largest cement company in India and the largest cement company in East India in terms of capacity.

Business — NVCL has an extensive portfolio of cement, RMX and modern building materials to cater to the needs of their customers. NVCL distributes their 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 (“Nontrade Segment”). Their focus is on the Trade Segment, where their distribution channels are a mix of wholesale and retail dealers and a sub-dealer network

Region of operation — NVCL has 11 Cement Plants (8 in East India and 3 in North India). Company’s Cement Plants are in the states of West Bengal, Bihar, Odisha, Chhattisgarh and Jharkhand in East India and Rajasthan and Haryana in North India, while their RMX Plants are located across India

Offer purpose — The IPO is issuance of shares for debt clearance and general corporate purposes.

Risks —

High and intense competition with Peers. Only Marginally ahead in East India in term of market share

High Valuations

Strength

Presence across key consumption markets and strong relationship with channel partners
Backed by Strong Promoter
Extensive sales, distribution network with diversified product portfolio
Plants are in close proximity to key markets and raw materials

Future

NVCL is the fastest growing cement company in terms of capacity addition on percentage terms with installed capacity doubling over the last 5 years post the acquisition of NU Vista. With focus on Infra in Pan India and special focus on East India, company can keep on growing well

Valuations

Valuations are high considering the Financials

Should we apply?

People can can give it total miss or subscribe only for listing gains if any. Sell on listing day.

Better peers are available cheaper in market

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