JSW Cement IPO Opens For Subscription Today — Should You Subscribe Or Avoid? Read DRChoksey Report

JSW Cement's Rs 3,600-crore IPO consists of fresh issue of 10.88 crore shares, worth Rs 1,600 crore, and an offer for sale of 13.61 crore shares worth Rs 2,000 crore.

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Deven Choksey Report

JSW Cement Ltd., the building materials arm of JSW Group launched its initial public offering today and the issue closes on Aug. 11. The company has set the price band in the range of Rs 139–Rs 147 per equity share, with a face value of Rs 10.

JSW Cement's Rs 3,600-crore IPO consists of fresh issue of 10.88 crore shares, worth Rs 1,600 crore, and an offer for sale of 13.61 crore shares worth Rs 2,000 crore.

The shares will be listed on both the National Stock Exchange and the BSE on Aug. 14.

The allotment for the JSW Cement IPO is expected to be finalized on Aug. 12.

Objects of the Offer

• Part financing the cost of establishing a new cement unit

• Prepayment or repayment of certain outstanding borrowings

• General corporate purpose.

JM Financial Ltd., Axis Capital Ltd., Citigroup Global Markets India Pvt. Ltd., DAM Capital Advisors Ltd., Goldman Sachs (India) Securities Pvt. Ltd., Jefferies India Pvt. Ltd., Kotak Mahindra Capital Company Ltd., SBI Capital Markets Ltd. are the book-running lead managers for the public issue.

Outlook:

JSW Cement, the building materials arm of the JSW Group, is one of India’s fastest-growing and most sustainability-focused cement manufacturers. With a strong commitment to green infrastructure, the company has positioned itself as a leader in producing eco-friendly cement solutions such as Portland Slag Cement (PSC) and Ground Granulated Blast Furnace Slag (GGBS), aligning with India’s decarbonization goals.

Operating with a strategic blend of integrated and grinding units across key geographies, JSW Cement leverages backward integration—including captive limestone mines and slag sourced from JSW Steel—to drive cost efficiency and secure raw material supply.

Its agile and tech-driven operations are complemented by digital platforms and a robust distribution network, allowing the company to rapidly expand its footprint across India.

It plans to achieve an overall 60 MMTPA cement capacity in the long term, with playing a pivotal role in shaping the future of sustainable construction while capitalizing on India’s robust infrastructure and housing growth story.

Despite consistent addition of capacities and gradual ramp-op of utilization across regions its revenue and Ebitda has grown marginally at -0.2% and 2.3% CAGR, respectively over FY23-25, as the cement industry has been significantly impacted by persistent pricing pressure, driven by consolidation among large players.

Further, in FY25 it had one of the lowest cement realization among the industry, while yielded sub-par profitability on a per ton basis, led by high raw material costs per ton, impacting overall financial performance. JSW cement plans to raise Rs 16 billion through issue of fresh equity to fund Capex of Rs 8 billion for installing new cement capacity, for prepaying borrowings to the tune of Rs 5.2 billion and rest for general corporate purposes.

Its initial issue is priced at 36.6 times trailing twelve months EV/Ebitda, much higher than its comparable peer average of 26.6x TTM EV/Ebitda.

We believe the issue is fully priced in, and thus we assign a “Neutral“ rating to the issue, on the backdrop of headroom for improvement in its financial metrics with early signs of rebound observed in cement realizations.

Risks:

• Limestone Availability Risk -

JSW Cement's mining operations rely on long-term leases and contracts which are subject to renewal, regulatory compliance, and legal risks. Disruptions or terminations may impact limestone supply and delay capacity expansion.

• Uncertainty Around Sambalpur Unit Transfer and Operational Timeline- The proposed transfer of the Sambalpur plant to Shiva Cement is currently subject to regulatory approvals and legal clearances, creating uncertainty around the transaction timeline. Compounding this risk is the ongoing liquidation process of Bhushan Power and Steel Limited (BPSL), which adds legal complexity to the asset transfer.

• Heavy Dependence on JSW Steel for Key Raw Materials and Reliance on Uninterrupted Power and Fuel Supply- JSW Cement sources over 90% of its blast furnace slag—a critical input for green cement—from JSW Steel and its subsidiaries. Any disruption in this related-party supply chain could significantly impact operations, financial performance, and cash flows. JSW Cement’s operations are energy-intensive and depend on continuous availability of power and fuel. Any disruption or shortage may adversely affect production and overall operational efficiency.

• Risk from Suboptimal Plant Utilization JSW Cement’s plant utilization averaged 62.9% in FY25, with continued underutilization across key units, particularly in South India where demand remains muted. Planned shutdowns, regional demand volatility, and reliance on clinker procurement during expansions may constrain operational efficiency and impact financial outcome.

• Regulatory action against promoter group SEBI has issued show cause notices to JSW Cement’s Promoter Group over alleged violations in group restructuring. Pending proceedings may impact the company’s reputation and hinder future capital market access.

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