JSW Cement IPO Listing Gains 4% on NSE: Expert Views on Next Move

Market

JSW Cement began trading on the stock market with an impressive opening performance. JSW Cement shares debuted on NSE at ₹153.50, beating the IPO price of ₹147 by an immediate gain of 4 per cent; the opening price on BSE was also at ₹153 per share. It’s a big deal for the company, which is entering public markets.

We saw high investor interest even before the listing. The IPO was oversubscribed multiple times, showing strong demand from both retail and institutional investors. With this listing, JSW Cement not only raised capital for its expansion plans but also set the stage for its next phase of growth in India’s cement industry.

The debut reflects the market’s attention on the company’s plans to increase production and strengthen its presence. For us, this is a clear indication that JSW Cement is now on a larger platform, attracting attention from a wider range of investors.

IPO Details

  • Issue Size and Structure: The IPO featured a fresh issue of 10.88 crore shares worth ₹1,600 crore, along with an offer for sale of 13.61 crore shares valued at ₹2,000 crore.
  • The IPO’s price range was set between ₹139 and ₹147 per share, with the final issue price fixed at ₹147.
  • Subscription Figures: The IPO received an overall subscription of 7.77 times, with Qualified Institutional Buyers (QIBs) subscribing 15.8 times, Non-Institutional Investors (NIIs) 10.97 times, and Retail Individual Investors (RIIs) 1.81 times.

Market Debut Performance

  • The shares debuted at ₹153.50 on the NSE and ₹153 on the BSE, representing a 4.4% and 4.1% gain over the IPO price, respectively.
  • Intra-day Movement: Despite the initial gains, the stock experienced a decline of over 5% from its opening price, trading below the issue price later in the day.
  • Trading Volume: The stock witnessed significant trading volume on the listing day, indicating active participation from investors.

Pre-Listing Market Indicators

  • Before the listing, the shares of JSW Cement were traded at a 3 per cent grey market premiumm, indicating that there would be little profit when the stocks are listed on the first day.
  • Anchor Investors: The IPO attracted investments from anchor investors, including the State Bank of India (SBI), which invested ₹57.75 crore in the IPO.

IPO Proceeds Usage

The proceeds from the IPO are planned to be used for the following purposes:

  • Part of the proceeds of the IPO of about 800 crores would be used partly to finance the Nagaur (joining with the new integrated cement plant in Nagaur, in Rajasthan) plant.
  • Approximately ₹520 crore will be utilized to prepay or repay certain borrowings, either fully or partially.
  • About ₹226.8 crore will be allocated for general corporate purposes, including enhancing operational and strategic initiatives.

Company Background

  • Parent Company: JSW Cement is a subsidiary of the JSW Group, which holds a 70% stake in the company.
  • Existing Operations: JSW Cement currently operates seven manufacturing plants across India, with a total grinding capacity of 20.6 million tonnes per annum (MTPA). The plants are strategically located across the southern, western, and eastern regions, ensuring strong market coverage. The company plans to expand its production by increasing grinding capacity to 41.85 MTPA and clinker capacity to 13.04 MTPA through new plants and upgrades to existing facilities.
  • Expansion Plans: JSW Cement aims to increase its production capacity to 40 million tonnes per annum through the establishment of new plants and the expansion of existing facilities.
  • Sustainability Initiatives: The company focuses on producing green cement and is committed to reducing its carbon footprint in line with global sustainability goals.

Conclusion

JSW Cement’s IPO debut reflects strong investor interest and confidence in the company’s growth strategy, despite the initial market fluctuations. The funds raised through the IPO will support the company’s expansion plans and debt reduction efforts, positioning it for future growth in India’s expanding cement industry.

Investors are advised to monitor the stock’s performance post-listing and consider their investment objectives and risk tolerance before making investment decisions.

FAQS:

How can investors earn listing gains from an IPO on the NSE?

To earn listing gains, investors should subscribe to the IPO at its issue price. When shares are listed on the NSE, if the price rises, you can sell immediately for a profit.

Is the JSW Cement IPO allotted?

JSW Cement IPO allotment depends on demand. If your application is selected, shares are allotted in your demat account. Check allotment status online with your PAN or application number.

How can I profit from an IPO?

You can profit by selling shares at a higher price after listing or holding for long-term growth. Timing, demand, and market trends affect the profit you make.

Disclaimer:

This content is for informational purposes only and is not financial advice. Always conduct your research.