Why Did JSW Cement Shares Drop 5% on Market Debut?
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Synopsis
On its first trading day, JSW Cement saw its shares drop by 5%, despite a strong IPO response. The company plans to use the funds for expansion and debt repayment. What does this mean for its future in the cement industry? Read on for insights.
Key Takeaways
- JSW Cement shares fell by 5% on debut.
- The IPO was significantly oversubscribed.
- Funds will support expansion and debt repayment.
- The company ranks among India's top cement producers.
- Long-term prospects remain strong despite initial declines.
Mumbai, Aug 14 (NationPress) On its inaugural trading day, JSW Cement witnessed a decline of approximately 5 percent in its stock price, even after a robust response to its Rs 3,600 crore initial public offering (IPO). The shares commenced trading at Rs 153 on the BSE, which was a 4.1 percent increase over the issue price of Rs 147, and opened at Rs 153.50 on the NSE, marking a 4.4 percent premium.
Nevertheless, these early gains dissipated rapidly, with the stock hitting an intra-day low of Rs 145.05 on both exchanges, ultimately concluding the trading session in negative territory.
The IPO, which ran from August 7 to August 11, garnered more than 12.75 lakh applications, achieving a subscription rate of 15.80 times among qualified institutional buyers (QIBs), 10.97 times from non-institutional investors, and 1.81 times from retail investors.
This issue included a fresh share sale worth Rs 1,600 crore and an offer for sale (OFS) of Rs 2,000 crore, with a price range of Rs 139-147 per share and a minimum lot size of 102 shares.
Following the listing, JSW Cement had a market capitalization of Rs 20,041 crore at the upper price band. The promoter's stake decreased from 78.61 percent to 72.33 percent after the IPO.
Proceeds from the IPO will be utilized for establishing a new integrated cement plant in Nagaur, Rajasthan, settling Rs 520 crore in debt, and covering general corporate expenses.
Established in 2009, JSW Cement is one of the rapidly growing cement manufacturers in India, ranking among the top 10 by installed capacity and sales volume.
Despite the subdued market debut, the company's long-term growth outlook is closely linked to its expansion initiatives and solid position in the cement sector.
Point of View
I believe that despite the initial market challenges faced by JSW Cement, the company’s robust expansion plans and established position in the industry indicate a promising long-term potential.
NationPress
19/08/2025
Frequently Asked Questions
What was the IPO subscription rate for JSW Cement?
The IPO was subscribed 15.80 times by qualified institutional buyers, 10.97 times by non-institutional investors, and 1.81 times by retail investors.
What will the funds from the IPO be used for?
The proceeds will be utilized for setting up a new integrated cement plant in Nagaur, Rajasthan, repaying Rs 520 crore in debt, and covering general corporate expenses.
