Ind-Ra puts Nuvoco rating on watch post Emami Cement takeover

India Ratings and Research has put Nuvoco Vistas Corporation Ltd's long-term rating 'Ind AA'

under rating watch evolving (RWE), days after the company acquired a 100-per cent stake in Emami Cement Ltd.

The enterprise value of the acquisition, announced on February 6, is Rs 5,500 crore, which includes an equity value

of Rs 2,300 crore and debt of Rs 3,200 crore on Emami Cement's balance sheet.

"NVCL is likely to finance the equity value through fresh equity/quasi equity infusion, the source of which will

be finalised over the next few days," India Rating said in a note.

The rating agency believes that the acquisition will significantly strengthen NVCL's market position, making it the

sixth-largest cement manufacturer in India and the largest in the eastern region, it said.

The combined entity's EBITDA could exceed Rs 2,000 crore in FY21 with EBITDA-per-tonne of over Rs 1,000,

"comparable" to most of the major players in the industry, but may "delay NVCL's deleveraging plan by a year", the note said.

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