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Nuvoco’s IPO cements 29% of its IPO Offering on Day 2

Mumbai, August 10, 2021: Nuvoco Vistas Corporation Limited, India’s fifth largest cement company by capacity, received bids of 1,82,54,834 shares against the offered 6,25,00,001 equity shares, as per the 5:00 pm data available on the bourses.

The portion reserved for retail investors was subscribed 0.51 times. While the Qualified Institutional Buyer category was subscribed 0.11 times, the Non-Institutional Investor category was subscribed 0.04 times and overall Issue was subscribed 0.29 times

The total Offer size is up to Rs. 5,000 crores with a fresh issuance of Equity Shares, aggregating up to Rs. 1,500 crores and an offer for sale of Equity Shares aggregating up to Rs. 3,500 crores, by Selling Shareholder.

Key brokerage houses like Antique Stock Broking, IDBI Capital, Canara Bank Securities, KR Choksey, IIFL Securities, HEM Securities and Asian Markets Securities Pvt Ltd have given recommendations of “Subscribe” to the issue for long term perspective while highlighting the key strengths of the company like (a) Largest cement company in east India which is also the fastest growing region (b) Acquisition led growth strategy (c) Extensive sales, marketing and distribution network with diversified product portfolio (d) Strategically located plants and (e) Experienced promoter and professional management. Nuvoco Vistas Corporation is the fifth largest cement company in India and is also one of the leading ready-mix concrete manufacturers in the country. Its cement plants are strategically located with road and rail connectivity to the key markets of East India and North India. Its plants are also located in proximity to the limestone reserves and other raw materials, such as slag and fly ash. Furthermore, the company operates through a range of distribution channels and direct sales to improve the reach to customers.

In comparison to other major cement producing countries, India exhibits the lowest per capita cement consumption at 200-250 kg, which is nearly half of world average of 500-550 kg. China has the highest per capita cement consumption of 1650-1750 kg, followed by Korea at 900-950 kg. However, despite a low per capita cement consumption, India is the second largest cement consumer in the world behind China. Crisil Research expects cement demand to register a CAGR of 6-7% in FY21-26, driven by a raft of infrastructure investments and healthy revival in housing demand.

ICICI Securities Limited, Axis Capital Limited, HSBC Securities and Capital Markets (India) Private Limited, JP Morgan India Private Limited and SBI Capital Markets Limited are the book running lead managers to the Offer.

 

 

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