Nuvoco Vistas Corporation Ltd IPO

Competitive Strengths:

Some of the competitive strengths are as follows

1.  Largest cement manufacturing company in East India in terms of total capacity 

The company is the largest cement manufacturer in East India and the fifth largest cement manufacturer in India in terms of capacity (Source: CRISIL Report).  NVCL has a capacity share of approximately 17% in terms of consolidated capacity in East India (Source: CRISIL Report). The company also has a capacity share of approximately 4.7% in terms of consolidated capacity in North India (Source: CRISIL Report). With a consolidated capacity of 22.32 MMTPA, it own 4.2% of the industry’s installed capacity in India as of December 2020 (Source: CRISIL Report).

The location of their plants allows them to maintain their leadership position in East India while growing their business in North India. In addition, their Cement Plants in Chhattisgarh and Rajasthan are ideally placed to serve the adjacent markets of Uttar Pradesh and Madhya Pradesh in Central India and Maharashtra in West India respectively. They also have a third-party procurement agreement for manufacturing and packaging certain cement products in the State of Uttar Pradesh, thereby establishing a presence in the high growth market of Central India.

Additionally, they are one of the leading industry players in the RMX industry. Their position in the RMX industry allows them to access key markets in India, particularly in areas where their cement products are not readily available.

2.  Strategically located cement production facilities that are in close proximity to raw materials and key markets:

Company’s Cement Plants are located at various strategic locations in East and North India. These locations allow them to effectively sell and market their products in East and North India as well as access to select key markets in Central India. They have 3 integrated units and 5 grinding units located in East India, and 2 integrated units and 1 blending unit located in North India. They are also in the process of enhancing their cement capacity in their existing grinding units in Jojobera Cement Plant and Bhabua Cement Plant in East India. The connectivity to raw materials and their customers allows them to manufacture and sell their cement products to customers in a cost efficient manner.

3.  Experienced Individual Promoter and professional management team:

NVCL has seen strong growth under the vision, leadership and guidance of the Individual Promoter, Dr. Karsanbhai K. Patel, who is a successful entrepreneur committed to becoming a key player in the high-growth building materials industry. They also have a well-qualified senior management team with experience across all functions of the building materials industry. The experience of the Individual Promoter and their management team provides them with a significant competitive advantage with which to grow their business.

Risk Factors:

Some of the risk factors are as follows

1.    COVID-19 pandemic has and will substantially impact the construction industry, the continued slowdown in the Indian construction industry could severely impact the company’s results of operations and profitability. 

2.    NVCL is dependent upon the availability of coal, water, labour and raw materials used in the production of cement, the costs and supply of which can be subject to significant variation due to factors outside the company’s control.

3.    There are outstanding legal proceedings involving the Company, the Subsidiary, the Individual Promoter, the Directors and the Group Companies and any adverse outcome in any of these proceedings may adversely impact the business, reputation, financial condition and results of operations.