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Economic Times
2 days ago
- Business
- Economic Times
JSW Cement shares fall over 5% post market debut. What should investors do?
Shares of JSW Cement stumbled on their first day of trading Thursday, sliding more than 5% from their opening price and erasing early gains that had topped grey-market expectations, in a muted debut for the Rs 3,600-crore offering. ADVERTISEMENT The stock listed at Rs 153 on the BSE, 4.1% above its IPO price of Rs 147, and at Rs 153.50 on the NSE, a 4.4% premium. But momentum quickly faded, with shares dropping to an intraday low of Rs 145.05 on both exchanges, down 5.2% and 5.5% respectively from their opening levels. The performance nonetheless beat the grey market premium of Rs 151 seen ahead of listing, which had implied a gain of around 3%. JSW Cement's book-built IPO, which ran from August 7 to 11, drew 7.77 times subscription overall, fuelled largely by institutional demand. Qualified institutional buyers bid 15.80 times their quota, non-institutional investors 10.97 times, and retail investors 1.81 times. The allotments were finalised on August 12. The issue comprised a Rs 1,600-crore fresh sale of 10.88 crore shares and an Rs 2,000-crore offer for sale of 13.61 crore shares by promoters. Ahead of the launch, the company raised Rs 1,080 crore from anchor investors, including marquee domestic and global institutions. Shivani Nyati, Head of Wealth at Swastika Investmart, said JSW Cement's debut at Rs 153.50 amounted to a flat listing. Nyati noted the company is among India's top 10 cement makers and is expanding aggressively through new and existing projects to double grinding capacity. However, revenue and profit growth have been uneven in the past three years, and high valuations combined with current losses could trigger short-term volatility. ADVERTISEMENT "Being in a growth phase, the company's high valuation and current losses could lead to short-term volatility in returns," said Nyati. Unlock 500+ Stock Recos on App Nyati advised IPO investors seeking listing gains to keep a stop loss at Rs 138, while medium-term to long-term investors could hold the stock for its growth potential. ADVERTISEMENT 'JSW Cement's Rs 3,600-crore IPO wrapped up its third and final day of bidding with full subscription, reflecting strong investor interest despite a softening in grey market premiums to around 3–4% ahead of listing,' said Gaurav Garg of Lemonn Markets Desk.'We advise subscribing only with a long-term view, citing rich valuations and near-term earnings pressure, but highlighting the company's strong growth potential in India's infrastructure expansion.' ADVERTISEMENT Brokerages had broadly advised long-term positions. Canara Bank Securities described JSW Cement as India's fastest-growing and the world's 'greenest' cement producer. While flagging its higher-than-peer valuations—32x EV/EBITDA versus the 23x industry average—it backed the IPO on long-term growth, sustainability credentials, and JSW Group Capital Research cited leadership in Ground Granulated Blast Furnace Slag (GGBS) production, brand strength, and operational synergies. ADVERTISEMENT SBI Securities had pointed to plans to more than double capacity to 60 million tonnes per annum by the mid-2030s, adding that profitability, hit by one-off losses, should improve through cost optimisation and new projects such as Shiva Cement's grinding unit in Cement, part of the JSW Group, is a leading green cement maker with seven plants across India and an installed grinding capacity of 20.6 million tonnes a year. Its portfolio spans blended and ordinary Portland cement, GGBS, clinker, and allied products, supported by a network of over 4,600 dealers, 8,900 sub-dealers, and 158 from the fresh issue will help fund a new integrated cement unit at Nagaur, Rajasthan, repay borrowings, and meet general corporate needs. The offer for sale proceeds will go to existing profitability in FY23 and FY24, the company posted a loss in FY25, a factor analysts say could weigh on near-term sentiment as investors watch whether JSW Cement can deliver beyond its first trading day. (Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times) (You can now subscribe to our ETMarkets WhatsApp channel)
Mint
07-08-2025
- Business
- Mint
JSW Cement IPO: Can a lean, green challenger cement its place in a heavyweight market?
In a cement industry defined by scale, legacy brands, and capital-heavy operations, JSW Cement Ltd is taking a distinctly unconventional route to the public markets. Its ₹3,600 crore initial public offering (IPO), set to open, isn't built on claims of being the biggest—but possibly the greenest. Priced between ₹139 and ₹147 per share, the issue includes a ₹1,600 crore fresh issuance aimed at expansion and a ₹2,000 crore offer for sale by existing shareholders. Proceeds will fund ₹800 crore towards a new integrated plant in Rajasthan, ₹520 crore for debt reduction, and the remainder for strategic growth initiatives. While established players such as UltraTech Cement Ltd, Shree Cement Ltd, and Ambuja Cements Ltd dominate through capacity, pricing power, and brand equity, JSW Cement is positioning itself as a lean, environmentally conscious challenger aligned with India's decarbonization goals. But in a market still deeply driven by volume, cost leadership, and entrenched networks, can a green pitch alone build lasting market share? Founded in 2009 with a grinding unit in Vijayanagar, Karnataka, JSW Cement has grown swiftly over the past decade to become one of India's top 10 cement players by capacity and sales volume. Between 2022-23 and 2024-25, its installed grinding capacity rose from 16.3 million tonnes per annum (mtpa) to 20.6mtpa—a compound annual growth rate (CAGR) of 12.4%, nearly double the industry's 6.2%, the company said in its draft red herring prospectus. Sales volumes (excluding its UAE unit) expanded at a CAGR of 15.1%, well ahead of the industry's 8.1%. While its size remains modest, the company has carved out leadership in a niche that is gaining traction: green cement. In 2024-25, JSW Cement held an 84% share in Ground Granulated Blast Furnace Slag (GGBS) sales—a byproduct of the steel industry used in making blended cement. The company claims its carbon emission intensity is 258 kilogrammes per tonne lower than the average reported by Indian peers. 'JSW Cement's goal to scale from 20mtpa to 42mtpa in the medium term, and to 60mtpa in the long term, is credible but subject to execution risks, including capex intensity, land acquisition, and logistics readiness," said Girija Shankar, lead analyst cement-institutional equities research at Yes Securities. 'But its focus on green products like PSC (Portland Slag Cement) and GGBS gives it a clear ESG (environmental, social, and governance) edge. It reduces input costs, enhances its emissions profile, and creates margin buffers in commodity downcycles." Despite rapid growth, JSW Cement's profitability remains behind industry leaders. Its three-year median Ebitda margin of 13.8% compares unfavorably to peers such as Ambuja Cement (23.8%) and Shree Cement (22.8%). Even UltraTech Cement (17.5%), Dalmia Bharat (17%), and JK Cement (16.82%) have maintained stronger margins. Ebitda is short for earnings before interest, taxes, depreciation, and amortization. The company's cost structure has been under pressure. Raw material expenses as a percentage of revenue have climbed steadily from 18.8% in 2022-23 to 24.6% in 2024-25, driven by input inflation and high dependence on industrial byproducts like slag and fly ash. 'This is a structural risk embedded in JSW Cement's model," said Shankar. 'Its reliance on slag from JSW Steel offers some stability, but also creates sourcing concentration. Any disruption in steel production, regulatory changes, or export competition could tighten availability and impact GGBS margins." Leverage is another concern. In 2024-25, JSW Cement had net debt of ₹4,203.8 crore (excluding CCPS), translating into a net debt-to-Ebitda ratio of 4.86x. 'From the IPO proceeds, only about ₹520 crore will go towards debt repayment. The rest will fund growth," noted Prashanth Kota, cement analyst at Choice Institutional Equities. 'Management wants to reduce net debt/Ebitda to 2-2.5x, but even 5x is manageable if interest coverage remains strong. Still, the financial structure leaves little room for error." 'With a ₹2,697 crore investment lined up for the Nagaur plant, leverage could rise again unless internal accruals keep pace. It may take 3-4 years of disciplined execution to reach a sustainable debt profile like Dalmia or UltraTech," Shankar added. In 2024-25, JSW Cement operated seven plants in India—one integrated unit, one clinker unit, and five grinding units across six states. Its UAE subsidiary also runs a clinker facility. The company remains exposed to regional market risks, with most volumes coming from Maharashtra, Karnataka, Andhra Pradesh, and Odisha. The upcoming Nagaur plant in Rajasthan and future plants in Madhya Pradesh aim to expand its footprint into northern and central India. 'JSW Cement is currently heavily skewed toward East and South India," said Shankar. 'The Rajasthan project provides access to markets like Delhi, Haryana, and Uttar Pradesh, where cement demand is projected to grow with the government infrastructure push. But it will take time—dealer ramp-up, logistics setup, and brand acceptance will be key." Ashutosh Murarka, another cement analyst at Choice Institutional Equities, also views the geographic diversification as critical to growth. 'Although JSW Cement is now present in South, West, and East, they have plans to become a pan-India player. Their GGBS and slag cement focus positions them well to benefit from rising infrastructure and urbanisation demand." While JSW Cement has built a sizable operation, it lacks the brand strength and distributor loyalty enjoyed by legacy players such as UltraTech, Ambuja, or Adani Cement. 'The company highlights that its brand recall and customer loyalty are still developing, especially in retail and semi-urban markets," said Harshal Dasani, business head at INVAsset PMS. 'It continues to rely heavily on trade sales through third-party dealers and retailers. This indicates a weaker direct-to-consumer relationship compared to peers with stronger retail penetration." JSW Cement engages over 57,000 influencers through its loyalty programme and invests more than ₹80 crore annually in promotional activities. However, in markets where brand trust and familiarity heavily influence purchase decisions, this may fall short. In fiercely competitive regions like the South and West, larger rivals such as UltraTech and Adani Cement have the scale and pricing power to aggressively defend or expand their market share. 'Without stronger brand autonomy and deeper customer engagement, JSW Cement may struggle to defend or expand market share in contested regions—especially as larger players are willing to cut prices to retain dominance," added Dasani. The timing is favourable. After a brief dip during the pandemic, India's cement demand has rebounded sharply. From 335 million tonnes in 2018-19, it is expected to reach 467 million tonnes in 2024-25, with a projected growth of 6.5-7.5% in 2025-26. By 2029-30, demand is likely to reach 670-680 million tonnes, translating into a 7.5–8.5% CAGR.
Sharjah 24
25-02-2025
- General
- Sharjah 24
SDPW completes Al Dhaid Wastewater Treatment Plant
High capacity and advanced technologies The Al Dhaid plant has a capacity of 1,500 cubic meters per day, designed to treat large volumes of wastewater according to the highest environmental and health standards. Equipped with advanced technologies, the plant ensures treated water quality and minimises environmental impact. The facility includes modern systems for monitoring water quality, ensuring safety and security. Strategic infrastructure development The Al Dhaid plant is a key part of Sharjah's comprehensive strategic plan for developing sewage networks across the emirate. In coordination with the Sharjah Urban Planning Council, the plan focuses on covering high-density areas. The plant features sedimentation basins, pump rooms, a control centre, and additional infrastructure to support its operations. Supporting Sharjah's vision for sustainable development The SDPW is working on several expansions to meet the region's growing needs and support Sharjah's rapid infrastructure and construction growth, under the leadership of His Highness Sheikh Dr Sultan bin Mohammed Al Qasimi, Supreme Council Member and Ruler of Sharjah. The plant plays an essential role in using treated water for irrigating green spaces and local agriculture, contributing to Sharjah's sustainable development efforts. Use of environmentally friendly materials Engineer Hind Al Hashimi, Director of the Public Services Department, highlighted that eco-friendly materials such as Ground Granulated Blast Furnace Slag (GGBS) were used instead of reinforced concrete. GGBS requires less energy to produce and generates significantly fewer carbon emissions than traditional cement production, making the project more environmentally friendly. Future expansion plans The Al Dhaid Sewage Treatment Plant is one of many projects aimed at enhancing life quality and sustainability for future generations. The department is also working on the Al Madam Sewage Plant, which will have a capacity of 2,000 cubic meters per day, and preparing to tender the construction of the Mleiha Sewage Plant, furthering Sharjah's commitment to preserving water resources and promoting sustainable development.
