Please refer to important disclosures at the end of this report
1
Nuvoco Vistas Corporation Ltd (NVCL) is the fifth largest cement player in India
and the largest cement company in East India, in terms of capacity, with a
consolidated capacity of 22.32 MMTPA. ~77% of its capacities are in the East
region while the balance is in North. NVCL has 11 Cement Plants, comprising five
integrated units, five grinding units and one blending unit. Also, they one of the
leading RMX manufacturers and have 49 RMX Plants across India. The company
has achieved this scale mainly through acquisition of the Indian cement business of
LafargeHolcim in 2016 and in 2020 by acquiring NU Vista (Emami Cement).
Positives: (a) Strong position in East India in terms of total capacity and market
share. (b) Strategically located cement production facilities that are near raw
materials and key markets. (c) Extensive sales, marketing, and distribution network
with diversified product portfolio. (d) Good track record of growth via acquisitions;
Volume growth and synergy benefits to aid profitability and debt reduction.
Investment concerns: (a) Slowdown in the construction in sectors like Infra and
Real-estate pose as a risk (b) Inability to procure raw material and/or inability to
pass on input cost inflation will impact the volumes and profitability (c) High debt
levels and geographic concentration (d) Continuing impact of the COVID-19 could
have a significant effect on operations & financial condition.
Outlook & Valuation: NVCL has a strong positioning in the East market and the
company will be further expanding its capacity by 2.7 MMTPA over the next two
years. The company’s net debt/EBITDA stood at ~5x as on FY21 but the same is
expected to come down with use of proceeds from the fresh issue. Going ahead,
the volume growth would be robust on the back of strong demand environment
and the pricing scenario is likely to remain favorable which along with synergy
benefits would aid overall profitability. At the upper end of the price band, NVCL is
seeking FY21 EV/EBITDA multiple of ~19x. We believe that the valuations on
forward numbers are reasonable and hence we recommend “SUBSCRIBE” on the
issue.
Key Financials
FY2018
FY2019
FY2020
FY2021
6,652
7,052
6,793
7,489
-
6.0
-3.7
10.2
88
-26
249
-26
-
-130.3
-
-110.4
16.0
13.0
19.1
19.5
2.5
-0.7
7.0
-0.7
232.5
-768.6
81.7
-785.4
4.2
4.1
3.9
2.8
3.6
-0.5
4.9
-0.4
8.3
3.1
5.4
3.6
23.0
26.7
18.8
18.7
3.6
3.5
3.6
3.6
Source: Company, Angel Research.
Note: Valuation ratios at upper price band.
SUBSCRIBE
Issue Open: Aug 09, 2021
Issue Close: Aug 11, 2021
Offer for Sale: `3,500 cr
QIBs 50% of issue
Non-Institutional 15% of issue
Retail 35% of issue
Promoters 71.0%
Others 29.0%
Fresh issue: `1,500 cr
Present Eq. Paid up Capital: `315.1 cr
Post Issue Shareholding Pattern
Post Eq. Paid up Capital: `341.4cr
Issue size (amount): `5,000 cr
Price Band: `560-570
Lot Size: 26 shares and in multiple thereafter
Post-issue mkt. cap: * `20,027 cr - ** `20,358 cr
Promoters holding Pre-Issue: 95.24%
Promoters holding Post-Issue: 71.03%
*Calculated on lower price band
** Calculated on upper price band
Book Building
Milan Desai
+022 39357600, Extn: 6842
[email protected]
NUVOCO VISTAS CORPORATION LIMITED
f
IPO NOTE NUVOCO VISTAS CORP.
LTD.
August 07, 2021
Nuvoco Vistas Corp. Ltd | IPO Note
Aug 07, 2021
2
Company background
Nuvoco Vistas Corporation Limited (NVCL) is the 5th largest cement company in
India and the largest cement company in East India in terms of capacity. As of
December 31, 2020, its cement production capacity constituted ~4.2% of total
cement capacity in India, ~17% of total cement capacity in East India and ~5% of
total cement capacity in North India, and they are one of the leading ready-mix
concrete manufacturers in India. As on FY21, NVCL has 11 Cement Plants (8 in
East India and 3 in North India). 3 of their plants in East India are integrated units
and 5 plants are grinding units. 2 of their plants in North India are integrated units
and the third is a blending unit. They have WHRS at all their integrated plants with
a total capacity of 44.7 MW, solar power plants with a total capacity of 1.5 MW
and captive power plants with generation capacity of 105 MW. NVCL distributes its
products through the trade segment.
Issue details
The issue comprises of OFS of up to `3,500 crore and Fresh issue of `1,500 Cr.
Pre and post IPO shareholding pattern
No of shares
(Pre-issue)
%
(Post-issue)
%
Promoter
31,50,89,061
95.24
25,36,85,552
71.03
Public
1,57,51,303
4.76
10,34,70,601
28.97
Total
33,08,40,364
100.00
35,71,56,153
100.00
Source: Company, Angel Research & RHP.
Objectives of the Offer
₹1,350 Cr towards repayment/prepayment/redemption of borrowings
General corporate purposes
Key Management Personnel
Hiren Patel is the Chairman and the Non-executive Director of the company. He
has been on the Board since November 11, 2017. He has been associated with
the Nirma group since the year 1997.
Jayakumar Krishnaswamy is the Managing Director of the company. He has
been on the Board since September 17, 2018. He is responsible for the
cement, RMX and modern building materials divisions of the company. He has
experience across FMCG and paint and coating industry.
Maneesh Agrawal is the Chief Financial Officer of the company. He joined the
company with effect from October 10, 2017. He is responsible for the overall
finance and information management functions of the cement, RMX and
modern building materials divisions of the company. He has over two decades
of experience primarily in cement, RMX and paper businesses.
Shruta Sanghavi is the Company Secretary and Compliance Officer of the
company. She is responsible for secretarial functions of the company. She has
experience in agro-chemicals, automobile, and logistics industries.
Nuvoco Vistas Corp. Ltd | IPO Note
Aug 07, 2021
3
Exhibit 1: Consolidated Profit & Loss Statement
Y/E March (` Cr)
FY2018
FY2019
FY2020
FY2021
Total operating income
6,652
7,052
6,793
7,489
% chg
-
6.0
-3.7
10.2
Total Expenditure
5,586
6,134
5,496
6,028
Cost of Goods Sold
1,262
1,445
1,230
1,207
Power and fuel
1,222
1,374
1,226
1,356
Freight and forwarding charges
1,830
1,983
1,776
2,029
Employee benefits expense
356
381
405
482
Other expenses
916
951
860
954
EBITDA
1,066
918
1,297
1,461
% chg
-
-13.9
41.4
12.6
(% of Net Sales)
16.0
13.0
19.1
19.5
Depreciation& Amortization
485
498
528
794
EBIT
581
420
769
667
% chg
-
-27.8
83.3
-13.3
(% of Net Sales)
8.7
6.0
11.3
8.9
Finance costs
475
457
419
664
Other income
56
54
37
34
(% of Sales)
0.8
0.8
0.5
0.5
Recurring PBT
106
(37)
350
3
% chg
-
-135.1
-
-99.2
Exceptional item
-
-
-
-
Tax
75
43
137
62
PAT (reported)
88
(26)
249
(26)
% chg
-
-130.3
-
-110.4
(% of Net Sales)
1.3
-0.4
3.7
-0.3
Basic & Fully Diluted EPS (Rs)
2.5
-0.7
7.0
-0.7
Source: Company, Angel Research
Nuvoco Vistas Corp. Ltd | IPO Note
Aug 07, 2021
4
Exhibit 2: Consolidated Balance Sheet
Y/E March (` Cr)
FY2018
FY2019
FY2020
FY2021
SOURCES OF FUNDS
Equity Share Capital
150
200
242
315
Other equity
4,673
4,788
5,037
7,009
Shareholders’ Funds
4,823
4,988
5,279
7,324
Total Loans
5,108
4,736
4,566
7,854
Other liabilities
1,463
1,454
1,512
1,964
Total Liabilities
11,395
11,178
11,357
17,142
APPLICATION OF FUNDS
Property, Plant and Equipment
6,258
6,065
6,221
9,324
Right-of-use assets
1,348.7
1,276
1,203
2,109
Capital work-in-progress
145
605
647
1,240
Intangible assets
2,553
2,553
2,546
3,608
Non-Current Investments
0
0
0
0
Current Assets
2,212
2,005
2,007
2,512
Inventories
556
585
603
712
Investments
844
456
-
384
Trade receivables
421
500
511
454
Cash and Cash equivalents
59
125
511
528
Loans & Other Financial Assets
9
14
4
4
Other current assets
323
326
378
430
Current Liability
1,909
2,084
2,087
2,765
Net Current Assets
304
(79)
(80)
(253)
Other Non-Current Asset
788
759
821
1,114
Total Assets
11,395
11,178
11,357
17,142
Source: Company, Angel Research
Nuvoco Vistas Corp. Ltd | IPO Note
Aug 07, 2021
5
Exhibit 3: Consolidated Cash flows
Y/E March (`cr)
FY2018
FY2019
FY2020
FY2021
Operating profit
162
17
387
37
Net changes in working capital
60
(24)
(201)
304
Cash generated from operations
1,109
877
1,125
1,757
Direct taxes paid (net of refunds)
(91)
(16)
(100)
(39)
Net cash flow from operating activities
1,018
860
1,025
1,717
Purchase of Assets
(269)
(581)
(569)
(552)
Interest received
7
15
15
15
Others
(390)
418
245
(2,387)
Cash Flow from Investing
(652)
(149)
(310)
(2,924)
Repayment (long term borrowings)
(72)
(400)
(220)
9
Repayment (short term borrowings)
-
-
-
74
Proceeds from Issue of Shares
(21)
-
(1)
2,050
Interest paid
(412)
(385)
(358)
(651)
Interest on Lease liabilities
(12)
(15)
(20)
(63)
Others
112
153
40
(0)
Cash Flow from Financing
(405)
(647)
(559)
1,420
Inc./(Dec.) in Cash
(39)
65
156
213
Opening Cash balances
72
34
98
254
Closing Cash balances
33
98
254
493
Source: Company, Angel Research
Nuvoco Vistas Corp. Ltd | IPO Note
Aug 07, 2021
6
Key Ratios
Y/E March
FY2018
FY2019
FY2020
FY2021
Valuation Ratio (x)
P/E (on FDEPS)
232.5
-768.6
81.7
-785.4
P/CEPS
35.6
43.2
26.2
26.5
P/BV
4.2
4.1
3.9
2.8
EV/Sales
3.6
3.5
3.6
3.6
EV/EBITDA
23.0
26.7
18.8
18.7
Per Share Data (Rs)
EPS (Basic)
2.5
-0.7
7.0
-0.7
EPS (fully diluted)
2.5
-0.7
7.0
-0.7
Cash EPS
16
13
22
21
Book Value
135
140
148
205
Returns (%)
ROE
3.6
-0.5
4.9
-0.4
ROCE
8.3
3.1
5.4
3.6
Turnover ratios (x)
Receivables (days)
22
26
27
22
Inventory (days)
36
35
40
43
Payables (days)
46
46
52
55
Working capital cycle (days)
13
15
15
10
Source: Company, Angel Research
Nuvoco Vistas Corp. Ltd | IPO Note
Aug 07, 2021
7
Research Team Tel: 022 - 39357800 E-mail: [email protected] Website: www.angelbroking.com
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