Nuvoco Vista Corporation Limited received robust participation from investors for its initial public offering (IPO). The issue was subscribed a total of 1.17 times after it came to a close on Wednesday. The qualified institutional buyers (QIBs) were the category to subscribed the most to the Nuvoco Vista Corporation IPO. The issue saw the QIBs subscribe a total of 4.23 times against their allotted shares. The non-institutional investors subscribed to the public issue a total of 0.66 times or 66 per cent against their allotted shares. The IPO had seen a subscription of 0.73 times or 73 per cent by the retail investor segment as the issue came to a close. The offer received bids for 10.70 crore equity shares against an IPO size of 6.25 crore equity shares. The company managed to mobilise Rs 5,000 crore through its public issue, of which Rs 1,500 had already been garnered from its anchor investors prior to the issue opening for subscription.
The Nuvoco Vista Corporation IPO had a grey market premium of Rs 10 on August 12. This indicated that the shares were trading at a premium of Rs 570 to Rs 580 per equity share on the unlisted grey market.
With the IPO closed for subscription, the next step for Nuvoco Vista as a company is to seek its basis of allotment and listing. The basis of allotment is likely to be on August 17. The listing date might be a little further down the line with a tentative date of August 23, which is not yet confirmed. Parallelly, the refunds will be happening right after the basis of allotment, as unlucky bidders receive their funds back on August 18. Following that the investors who were lucky enough to snag a share or two will see the accreditation happen on August 20, most likely.
The company has more or less achieved what it set out to do with its IPO, as the issue size itself was Rs 5,000 crore. The issue also consisted of a fresh issue and an offer for sale (OFS). The fresh issue was worth Rs 1,500 crore and the OFS aggregated up to Rs 3,500 crore. The IPO had a price band of Rs 560 to Rs 570 with a face value of Rs 10 per equity share. The objective of the issue was to use the proceeds from the IPO to repay, prepay and redeem the borrowing availed by the firm either in full or partially. The remainder of the funds would go towards other general corporate purposes.
Nuvoco Vista Corporation was incorporated in 1999 and is part of the Nirma Group of Companies which make it one of the largest cement and concrete manufacturers in India. It has its fair share of advantages that give it an edge in the market. One such plus point is its strong network of 15,969 dealers and 225 CFAs. It also has strategically located cement plants in West Bengal, Bihar, Odisha, Chhattisgarh, and Jharkhand in East India and Rajasthan and Haryana in North India. These plants are located at an ideal distance from key markets.
Speaking on Novoco Vista, Ashish Chaturmohta the Director of Research at Sanctum Wealth Management said, “Nuvoco Vistas is a part of the Nirma Group company, which is the 5th largest cement company in India and largest cement company in East India in terms of capacity. The Company has expanded from just 2.5 MTPA in FY16 to 22 MTPA in FY21 i.e. expanded 8.8x. The company also plans to expand further i.e. in FY22 1.5 MTPA and in FY23 1.2 MTPA. Post that expansion company will have total installed capacity of 24.7 MTPA. Company’s capacity account for 4.2% of Industries installed capacity.”
“Based on current Peer comparison company seem to be reasonably priced but based on Future estimation on back of good industry outlook, better realisation, Capacity utilisation and new expansion coming to stream company seem to be priced attractively or based on FY23E company is currently valued at EV/EBITDA of just 12.2 around while industry average in 20.8,” added Chaturmohta.
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