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IPO: Nuvoco Vistas debuts at a discount to the IPO due to weak market sentiment

Mumbai: Nuvoco Vistas Corporation, India’s fifth largest cement company, made a weak debut on the stock market on Monday at a discount of 17.37% on its IPO price of Rs 570.

The stock opened at Rs 470 on the BSE and hit a high of Rs 550 before ending the day at Rs 531.30, or 6.8% below the IPO price.

Nuvoco’s initial public offering of Rs 5,000 crore received a tepid response from investors. The IPO was subscribed 1.71 times. The portion reserved for qualified institutional buyers was subscribed 4.2 times, the portion reserved for wealthy private customers was subscribed 0.66 times and 0.73 times, respectively.

Nuvoco’s weak listing was preceded by CarTrade’s debut, which was also below its IPO price.

Analysts said retail sentiment was hit hard amid negative sentiment among mid- and small-caps. The correction in mid-caps and small-caps has caused portfolios to melt by as much as 20-30%. Analysts said the weakened sentiment was visible on Nuvoco’s IPO as retail and HNI quotas weren’t fully drawn.

Among other recently listed companies, Krsnaa Diagnostics, Windlas Biotech and Glenmark Life Sciences – all of which were listed in August – are trading below their respective IPO prices.

Most brokers recommended subscribing to Nuvoco’s initial public offering.

“In the future, volume growth would be robust due to a strong demand environment and the price scenario is likely to remain favorable, which, along with synergy benefits, would support overall profitability,” Brokerage Angel One said in a pre-IPO release.

The brokerage firm had recommended subscribing to Nuvoco’s initial public offering because the forward numbers’ valuations were reasonable.

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