State Bank of India (SBI) has successfully capitalized on its investment in JSW Cement's initial public offering (IPO), generating a substantial profit of Rs 78 crore. The bank's strategic move has resulted in an impressive 125% return on investment, even before the company's listing on the stock exchange.

SBI's Profitable Exit

SBI's decision to participate in JSW Cement's Rs 3,600 crore IPO has proven to be highly lucrative. The bank sold 88.23 lakh shares at the IPO price, having initially acquired them at an average cost of Rs 65.45 per share. This well-timed exit strategy has allowed SBI to secure significant gains from its investment.

Shareholding Implications

Following this transaction, SBI's stake in JSW Cement is set to decrease from 1.22% to 0.47% post-listing. This reduction in shareholding reflects the bank's strategy to capitalize on the IPO opportunity while maintaining a smaller position in the company.

Other Investors' Gains

SBI is not the only entity benefiting from the JSW Cement IPO. Other investors, including AP Asia Opportunistic Holdings and Synergy Metals, are also poised to double their investments through this offering.

JSW Cement's Market Position and Financial Challenges

JSW Cement currently ranks among India's top 10 cement companies, highlighting its significant presence in the industry. However, the company has faced some financial challenges:

• EBITDA per tonne has declined from Rs 787 in FY23 to Rs 645 in FY25
• The company's financial performance shifted from a profit of Rs 104 crore in FY23 to losses in subsequent periods

IPO Details

The JSW Cement IPO comprises:

Brokerage Recommendations

Despite acknowledging higher valuations, brokerages such as Anand Rathi and Religare Broking have recommended long-term subscription to the IPO. This suggests a positive outlook on JSW Cement's future prospects, despite its recent financial challenges.

The successful exit by SBI and the potential for other investors to double their investments underscore the strong market interest in JSW Cement's public offering, despite the company's recent financial performance.

JSW Cement's highly anticipated Initial Public Offering (IPO) has concluded with impressive results, marking a significant milestone for one of India's fastest-growing cement manufacturers. The ₹3,600 crore IPO saw strong demand across investor categories, reflecting confidence in the company's growth prospects.

IPO Performance Highlights

The JSW Cement IPO witnessed an overall subscription of 7.77 times, with bids received for over 140.91 crore shares against the 18.13 crore shares on offer. The robust response came from various investor segments:

• Qualified Institutional Buyers (QIBs): 15.80 times oversubscribed
• Non-Institutional Investors (NIIs): 10.97 times oversubscribed
• Retail Investors: 1.81 times oversubscribed

IPO Structure and Pricing

The IPO comprised two components:

1. A fresh issue of 10.88 crore shares, aiming to raise ₹1,600 crore
2. An offer-for-sale (OFS) of 13.60 crore shares, worth ₹2,000 crore

The price band for the IPO was set between ₹139 and ₹147 per share.

Fund Utilization

JSW Cement has outlined clear plans for the proceeds from the fresh issue:

• ₹800 crore: Funding a new cement unit in Nagaur, Rajasthan
• ₹520 crore: Repayment of outstanding borrowings

Key Dates for Investors

Company Overview

JSW Cement has established itself as a prominent player in the Indian cement industry. The company ranks among the top three fastest-growing cement manufacturers in India, measured by installed grinding capacity and sales volume between FY2015 and FY2025.

This successful IPO marks a significant step for JSW Cement, providing it with the capital to expand its operations and strengthen its market position. Investors and market watchers will be keenly observing the company's performance post-listing, as it continues its growth trajectory in India's dynamic cement sector.