Nuvoco Vistas Corp. IPO: All You Need To Know

Nuvoco Vistas Corp. will sell shares at Rs 560-570 apiece in its three-day initial public offering starting Aug. 9 as the cement maker joins other Indian companies in raising funds during a record year for maiden offers.

Watch the interaction with the company here:

Objective

The company plans to use the IPO's proceeds to pare debt to the tune of Rs 1,350 crore. It had total borrowings of Rs 7,642 crore as on March 31.

Business

Nuvoco Vistas is largest cement manufacturer in East India and India's fifth-largest in terms of capacity. At 22.32 million tonnes per annum, it has 4.2% of the industry's capacity.

The company also has clinker capacity amounting to 11.58 MTPA. It produced 16.80 MTPA of cement and 9.70 MTPA of clinker in the year ended March 2021.

It operates eight plants in East India and three in North India. Its cement plants are in West Bengal, Bihar, Odisha, Chhattisgarh and Jharkhand in the east, and Rajasthan and Haryana in the north. Its ready-mix concrete plants are located across India.

These locations allow the company to effectively sell in East and North India and select key markets in central part of the country.

In FY21, its trade segment comprised 73% of total sales, with the non-trade segment making up the remainder.

Financials

The company ended FY21 in a loss amid Covid-19-led disruptions. Its key metric of operating profit per tonne declined on the back of weak prices and lower volumes.

Peer Comparison

Although the company is among the largest players in East India, it competes with ACC Ltd., Ambuja Cements Ltd., Ultratech Cement Ltd. and Shree Cement Ltd. across the country.

Risk Factors

• Business and operations to be substantially impacted by the Covid-19 pandemic. Covid-19 has hit demand from construction sector owing to lockdowns and a continued slowdown in the sector would impact performance.

• Business is dependent on its ability to mine or procure sufficient limestone for its operations, and its inability to do so on reasonable terms, or at all, could have adverse impact on business, financial health and results of operations.

• The recently enacted Mines and Minerals (Development and Regulation) Amendment Act, 2021, may result in the lapsing of letters of intent for the grant of mining leases under Section 10A of the MMDR Act. In addition, the amendment may also impact continuity of certain non-operating mining leases.

• It's dependent on continued availability of coal, water, labour and other raw materials—the costs and supply of which can be subject to significant variations because of factors outside its control.