Nirma Group backed Nuvoco Vistas IPO: Analysts are bullish on the cement sector and recommend the IPO for long term

• Nuvoco Vistas, part of Nirma Group of companies, opened its initial public offering (IPO) on Monday with a price band of ₹560-570.
• The company is one of the largest cement companies in east India in terms of capacity.
• The cement manufacturer is looking to raise ₹5,000 crore through the public issue.

Nuvoco Vistas’ is the current ongoing initial public offering (IPO) opened for subscription along with CarTrade. Nuvoco, which is one of the largest cement players in east India, is a subsidiary of the Nirma Group, famous for its eponymous detergent brand.

Nirma Group entered the cement business in 2014 by acquiring Switzerland based LafargeHolcim in 2016 and NU Vista, formerly known as Emami Cement in 2020. Gujarat-based Nirma Group is a diversified conglomerate that manufactures products ranging from chemicals to detergents, soaps, healthcare products and real estate development.

With a strong promoter backing the Nuvoco Vistas grew from a cement based firm to offering various building materials like mixed concrete, cement, wall putty, blocks, plaster, and more. Over the years, Nuvoco Vistas has become the largest cement company in east India in terms of capacity (22.32 million metric tonnes per annum).

The company’s cement plants are located in the states of West Bengal, Bihar, Odisha, Chhattisgarh and Jharkhand in east India and Rajasthan and Haryana in north India. The cement manufacturer is looking to raise ₹5000 crore via the IPO.


Analysts have recommended subscribing to the IPO issue as they are bullish on the overall cement industry. Adding to it is the fact that the company holds a dominant position in east India with 17% market share in terms of capacity.


“The country’s demand growth is likely to be led by east and central regions and will be primarily from affordable housing and infrastructure creation and the cement sector is expected to largely benefit from it. Nuvoco Vistas, being the largest cement company in the east region, is well placed to capitalise on these opportunities...We recommend to subscribe the [sic] issue from a long-term perspective,” said analysts at Investmentz.com.

One biggest drawback for the company is its high debt. As of December 31, 2020, its net debt stood at ₹7,259 crore. The company intends to use the proceeds from the fresh issue to pay some of its debt.

The cement manufacturer’s valuation is at a discount to its large cap peers as it partially factors high debt and low returns on capital employed (ROCE), said a report by IDBI Capital. “But given [the] up-cycle in the cement industry and expectation of improvement in margin and balance sheet deleveraging over FY21-23 earnings estimate we recommend subscribe,” added the report.

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