Nirma’s cement arm Nuvoco cracks on stock-exchange debut
Nuvoco Vistas Corporation Ltd, the cement arm of Karsanbhai Patel-led Nirma Group, made a disappointing debut on stock exchanges Monday with its shares listing at a 17% discount to their issue price before paring the losses.
Shares of Nuvoco began trading on the BSE at Rs 471 apiece compared with the initial public offering price of Rs 570. The shares subsequently recovered to touch a high of Rs 550 and were trading around Rs 531 apiece late afternoon.
The 30-stock benchmark Sensex was trading 0.4% higher at 55,561 around 3 pm.
Nuvoco, India’s fifth-largest cement maker by capacity, now commands a market value of just below Rs 19,000 crore.
The tepid debut comes after an IPO that raised Rs 5,000 crore (about $670 million). Nuvoco mopped up Rs 1,500 crore by issuing new shares while its promoter group firm Niyogi Enterprises Pvt. Ltd mobilised Rs 3,500 crore via a secondary sale of shares in the IPO.
The Nuvoco Vistas IPO was covered just 1.7 times thanks to institutional investors, who bid for 4.2 times the shares reserved for them. The portion earmarked for non-institutional investors and retail investors was undersubscribed.
Nuvoco is the first Indian cement company in 13 years to list on the stock exchanges. It joins bigger rivals Ultratech Cement Ltd, Shree Cement Ltd, Ambuja Cement Ltd, and ACC Ltd on the bourses. Ultratech was down 1.8%, Shree Cement fell 1.2%, Ambuja Cements was little changed while ACC was down 0.9%. Smaller rival India Cements fell 5.8% while J&K Cement was down 2.6%.
Nirma Group, known mainly for its eponymous detergent, operates in a few other sectors such as healthcare products and real estate development.
It entered the cement sector in 2014 by setting up a new facility. It made its biggest stride two years later when ot bought the Indian cement assets of LafargeHolcim for $1.4 billion.Last year, Nirma purchased the cement arm of Emami Group for $770 million. It later consolidated its cement assets under Nuvoco.
Nuvoco makes cement, ready-mix concrete and building materials. It runs 11 cement plants with annual capacity of 22.32 million tonnes, and 49 ready-mix concrete plants.
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