Nuvoco Vistas listing day strategy: Dull debut expected after CarTrade loss; should you buy, sell or hold?

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August 20, 2021 3:37 PM

The Indian stock market will see the listing of Nuvoco Vistas on Monday, 23 August, followed by Aptus Value Housing Finance India and Chemplast on Tuesday, 24 August.

Nirma, Nuvoco Vistas IPO, IPONine years ago Nirma shares were delisted from exchanges. Image: nuvoco.in

The Indian stock market will see the listing of Nuvoco Vistas on Monday, 23 August, followed by Aptus Value Housing Finance India and Chemplast Sanmar on Tuesday, 24 August. The Rs 5,000-crore Nuvoco Vistas IPO got 1.71 times subscription, and was available at a price band of Rs 560-570 per share. In the primary market, Nuvoco shares were seen trading at discount to IPO price. Nuvoco shares were trading at Rs 556, a discount of 2.5 per cent in the grey market, over the issue price, according to the people who deal in unlisted shares of the companies.

Upon successful listing, Nuvoco will join the industry-listed peers such as Ultratech Cement, Shree Cement, Ambuja Cements and ACC. Analysts say that with correction in primary and secondary markets, the spree of dull listings continues on the street. “Nuvoco Vistas may follow the same trend and chances of discount listing cannot be denied. At 17x EV/EBITDA, the issue looks fully priced leaving nothing on table for investors in short term,” Abhay Doshi, Founder, UnlistedArena.com, dealing in Pre-IPO & Unlisted Shares, told Financial Express Online. The issue looked unattractive from the beginning and the recent listing events further dampened the sentiments.

Nuvoco Vistas, a Nirma group cement company, has 11 cement plants comprising five integrated units, and grinding units each and one blending unit. It operates cement manufacturing units in Chhattisgarh, Jharkhand, West Bengal, Rajasthan and Haryana. Analysts at Hem Securities expect a flat listing on Monday. “Investors should book partial profit in case if stock is available at premium to listing price on debut day while they can keep it for long term as company being largest cement manufacturing company in East India in terms of total capacity with market-leading brands & experienced individual promoter and professional management team has strong future potential,” Astha Jain, Senior Research Analyst, Hem Securities, said.

Nuvoco is the fifth largest cement player in the country by capacity. It is one of the market leaders in East India which makes cement and modern building materials like adhesives and dry plaster. “Although the issue may not give hefty listing gains to the investors, it can turn out to be a good long term play given the company’s strong brand value, robust growth in capacity addition, good visibility for cement companies due to focus on infra, reduction in debt and improvement in margins and profitability,” Likhita Chepa, Senior Research Analyst at CapitalVia Global Research, told Financial Express Online. She added that investors can consider holding it with a medium to long-term perspective.

(The stock recommendations in this story are by the respective research analysts and brokerage firms. Financial Express Online does not bear any responsibility for their investment advice. Capital markets investments are subject to rules and regulations. Please consult your investment advisor before investing.)

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