IPO closes on 11 Aug'25
JSW Cement Ltd
Minimum Investment
₹ 14,994 / 102 shares
Grey market premium
₹ 3 (2% premium)
Our Verdict:
Avoid
- JSW Cement Ltd has quickly become a significant player in India’s building materials industry over the past decade. As of March 31, 2025, it ranks among the top 10 cement companies in the country by installed capacity and sales volume.
- However, the company’s FY25 financial performance signals stress, with declining profits, shrinking profit margins and flat revenues of ~Rs 6,000 crore since FY23. Additionally, its return ratios are significantly lower than those of its peers.
- With ~21 MTPA of cement grinding capacity across South, East, and West India, JSW Cement is still a mid-sized player. While the medium-to-long-term outlook for cement demand in India is positive, there is a risk of oversupply. Top players are expanding aggressively through new plants and acquiring smaller regional firms, which could put significant pressure on pricing and margins across the sector.
- JSW Cement’s IPO represents a growth story in one of India’s toughest sectors, transitioning from a regional player to a national force. Success, however, will hinge on timely execution, strategic expansion and effective debt management.
- If the company manages to overcome these challenges, it could emerge as a strong ESG-driven growth stock in India’s next phase of economic development. However, if it falters, rising debt and intense competition could weigh on returns.
- Given the oversupply risks and the company’s weak financials, we advise investors to remain on the sidelines as the risk:reward ratio is not favourable right now. Investors should consider adopting a wait-and-watch approach and invest once earnings catch up with growth.
About the company
Founded in
29 Mar'06
Managing director
Parth Jindal
- JSW Cement is ranked among the top 10 cement companies in India by both installed capacity and sales volume. Its product portfolio includes blended cement, Ordinary Portland Cement (OPC) and specialized materials such as ready-mix concrete. Additionally, it is the largest manufacturer of Ground Granulated Blast Furnace Slag (GGBS) in India, an eco-friendly product made entirely from blast furnace slag.
- Currently, JSW Cement operates 8 plants across India and the UAE, with an installed grinding capacity of 20.6 MT and a clinker capacity of 6.4 MT. The company now plans to more than double this capacity to establish a pan-India presence.
STRENGTHS
- Market Leadership: JSW Cement ranks among the top 10 cement companies in India in terms of installed capacity and sales volume as of March 31, 2025. From FY23 to FY25, its grinding capacity expanded at a CAGR of 12.42%, while its sales volume (excluding JSW Cement FZC) grew at a CAGR of 15.05%. This growth outpaced the industry average CAGR of 6.23% for installed capacity and 8.12% for sales volume during the same period.
- Dominance in GGBS: JSW Cement is the largest manufacturer of ground granulated blast furnace slag (GGBS) in India, holding a market share of ~84% in GGBS sales in FY25. The contribution of GGBS volume sold as a percentage of total sales increased from 36.67% in FY23 to 40.57% in FY24 and 41.03% in FY25. GGBS is integral to various infrastructure projects, including highways, ports and bridges.
- Environmental Leadership: JSW Cement maintains the lowest carbon dioxide emission intensity among its peers in India and ranks among the top global cement manufacturers in terms of sustainability.
- Extensive Sales & Distribution Network: JSW Cement has a robust sales and distribution network, with a reach that includes dealers, sub-dealers and warehouses across its operating markets to cater to retail demand. As of March 31, 2025, its network includes 4,653 dealers, 8,844 sub-dealers and 6,559 direct customers, ensuring broad coverage of both trade and non-trade sales.
RISK FACTORS
- Weak Financial Performance: JSW Cement’s performance in FY25 reflects significant stress, with a net loss of Rs 164 crore compared to a profit of Rs 62 crore in FY24 and Rs 104 crore in FY23. Additionally, profit margins have contracted, further signalling financial strain.
- Declining Return Metrics: JSW Cement’s Return on Equity (RoE) and Return on Capital Employed (RoCE) have shown a worrying decline, significantly underperforming its peers. RoE dropped from 2.6% in FY24 to a negative -6.9% in FY25, while RoCE fell from 11.01% to 7.05%. Any further deterioration in these metrics could impact the company’s profitability and overall financial health.
- Legal Risks: JSW Cement, along with its group entities and Key Management Personnel (KMP), is involved in ongoing legal proceedings amounting to approximately Rs 667 crore. An adverse ruling in any of these cases could harm the company’s reputation, disrupt its operations, and negatively affect its financial performance.
- High Debt Levels: As of March 31, 2025, JSW Cement’s total borrowings stand at Rs 6,166.55 crore. Despite the allocation of Rs 520 crore from the IPO for debt repayment, the firm’s debt levels remain high. If demand growth is sluggish or profit margins remain tight, the company may face further pressure from interest burdens.
Financials
All Values are in Cr.
Issue details
Issue type
Mainstream
Issue size
₹ 3,600 crore
Fresh Issue
₹ 1,600 crore
OFS
₹ 2,000 crore
Price range
₹ 139 - 147
Lot size
102 shares
Issue Objective
The net proceeds from the fresh issue will be utilized to:
- Part-finance the establishment of a new integrated cement unit in Nagaur, Rajasthan;
- Repay certain outstanding borrowings availed by the company; and
- Fund general corporate purposes.
Dates
Bidding open
7 Aug'25
Bidding close
11 Aug'25
Allotment date
12 Aug'25
Refund date
13 Aug'25
Listing
14 Aug'25
IPO Reservations
Qualified institutional buyers
<50%
Non-institutional investors
>15%
Retail individual investors
>35%
Read the Offer Document
© 2025 by Liquide Solutions Private Limited, SEBI Registered Research Analyst (Registration number - INH000009816)
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