NEW DELHI: The initial public offer (IPO) of cement manufacturer Nuvoco Vistas Corporation saw tepid interest from investors on the first day of the bidding on Monday.
By 5:00 pm, the issue was subscribed 16 per cent, attracting bids for 97,33,126 shares against a total issue size of 6,25,00,001 shares.
Nuvoco Vistas Corporation, erstwhile Lafarge India, plans to raise Rs 5,000 crore. The company is India’s fifth-largest cement company. Analysts are bullish on the IPO as they see valuations fairly priced and see good prospects for the cement sector going ahead.
On Saturday, the Nirmal Group company raised Rs 1,500 crore by allotting 30 per cent of the issue to 40 investors. Over 90 per cent of the allotment was made to long only funds.
The Nirma Group company’s issue comprises Rs 1,500 crore worth fresh shares and Rs 3,500 crore offer for sale (OFS) by promoters and will be sold in Rs 560-570 per price band.
Antique Stock Broking said that the cement maker is seeking a market capitalisation of Rs 20,400 crore and that its interactions with Industry suggest that Nuvoco’s asking valuations at the time of filing draft IPO papers in May was much higher.
A key risk for Nuvoco would be a correction in pricing in the Eastern region, a key exposure area for Nuvoco, Antique said. East accounts for 78 per cent of Nuvoco’s capacity. The cement maker also has a presence in North India.
The company reported a loss of Rs 25.91 crore for FY21 compared with a profit of Rs 249.25 crore in FY20 and a loss of Rs 26.48 crore in FY19. In FY22, there had been a slowdown in construction activity due to the second wave, which impacted Nuvoco’s sales volumes in April and May. Demand revived in the month of June, the company said.
