Nuvoco Vistas shares list at loss; begin trading at 17% discount to IPO price

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August 23, 2021 9:52 AM

Nuvoco Vistas shares made a weak listing on the stock exchanges, even though benchmark indices and broader markets were trading with gains.

Nifty, Bank Nifty, Stock marketsNuvoco Vistas shares list at discount to IPO price.(Image: REUTERS)

Nuvoco Vistas shares made a weak listing on the stock exchanges, even though benchmark indices and broader markets were trading with gains. Shares of the company began trading at Rs 471 apiece today, down 17.37% from the upper end of the IPO price band of Rs 570 per share. With this Nuvoco Vistas became the second recent listing to trade at discount on listing, after CarTrade Tech. Nuvoco Vistas, the fifth largest cement player in the country by capacity, had entered the primary market earlier this month to raise Rs 5,000 crore. The massive IPO of the company was subscribed 1.71 times by investors. Upon listing the market capitalization of Nuvoco Vistas was Rs 16,822 crore.

Check live price: Nuvoco Vistas

The IPO of Nuvoco Vistas was fully subscribed overall, however, only qualified institutional investors had subscribed their portion completely. Non-Institutional Investors (NII) and retail investors had failed to bid for the portion reserved for them. NIIs had subscribed to the IPO 0.66 times while the retail portion was subscribed 0.73 times. Post issue, promoters of the company, now hold a 71% stake in the company, down from 95.25% earlier. Public shareholding has increased to 29% from 4.76% earlier. 

“We like NVCL due to its leadership position in fast-growing East market, wide premium product portfolio and ability to successfully integrate large acquisitions,” analysts at Motilal Oswal Financial Services had earlier said. They valued the issue at $146 FY21 EV/ton (USD) and 16.6x EV/EBITDA on a post-issue basis, which they said was at a discount to the industry average given slightly weaker financials. “It is expected to witness strong growth going ahead led by its expansion plans, integration of NU Vista and debt reduction,” they added while pinning a ‘Subscribe for Long Term’ rating on the IPO.

Meanwhile, analysts at Choice Broking found the issue to be valued at a premium to peer average. “At higher price band of Rs 570, NVCL is demanding an EV/EBITDA multiple of 18.2x, which is at a premium to peer average of 15.2x,” they said. However, despite this, considering the revival of real estate sector along with a host of other factors, the brokerage firm assigned a ‘Subscribe for Long Term’ rating on the issue. 

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