Nuvoco Vistas Corporation Limited, a Nirma promoter group company, may list Emami Cement in the next two to three years when the expansions are complete and capital market condition expected to be agile and optimistic, sources said on Thursday.
Nuvoco Vistas, formerly Lafarge India Limited, in February announced that it will acquire the 8.3 million tonnes per annum cement business of Emami for an enterprise value Rs 5,500 crore. Competition Commission of India (CCI) approved the acquisition in May.
"Nuvoco is likely to list Emami Cement in the next two to three years when all formalities are complete and capital market condition is agile and optimistic," a source privy to the development said.
When contacted, Nuvoco spokesperson declined to speak on the issue.
Kotak Special Situations Fund, managed by Kotak Investment Advisors Limited, invested Rs 500 crore in Nuvoco Limited, the parent body of the acquiring arm, to finance the acquisition of Emami Cements in a structured quasi-equity deal, sources said.
Quasi-equity fills the gap between debt and equity and aims to reflect some of the characteristics of both.
Out of Rs 5,500 crore enterprise valuation, the current debt level of about Rs 2,200 crore will continue under the Gujarat-based Nirma group management. Kotak is the only external funding partner and the rest is being funded by Nuvoco and the group, sources said.
Emami Cement operates an integrated cement plant at Risdah in Chhattisgarh, and has grinding units in Bihar, West Bengal and Odisha with a total installed capacity of 8.3 million tonnes per annum.
Kolkata-based promoters of FMCG major Emami Ltd receive around Rs 3,200 crore after adjusting Rs 2,200 crore debt for the cement business, but the actual cash flow will be less after taxes to the Emami promoters.