JSW Cement IPO: Listing Day Strategy and Performance Analysis
The JSW Cement IPO is set for its listing, raising crucial questions about listing day strategy and potential performance. This article delves into what investors can expect, including insights from grey market premium trends and a comparison with the performance of another JSW Group company’s IPO.
A Look Back: JSW Infrastructure IPO Performance
To better understand JSW Cement’s potential, let’s review the performance of JSW Infrastructure, another JSW Group company that debuted on the stock market.
Key Details and Allocation
The JSW Infrastructure IPO launched on September 27, 2023, with shares priced at ₹119. Minimum allocation was 126 equity shares. The total issue size stood at ₹2800 crore. Notably, 75% of the shares were reserved for Qualified Institutional Buyers (QIBs), 15% for High Net-worth Individuals (HNIs), and only 10% for retail investors, amounting to approximately ₹280 crore worth of shares. A total of 186,741 retail investors received allocations in this IPO.
Subscription Figures
The JSW Infrastructure IPO received an excellent response, being subscribed around 60 times in the QIB category. The HNI category, combining both big and small HNIs, saw a subscription of approximately 17 times. Specifically, the Big HNI category was subscribed about 17.94 times, and the Small HNI category around 14.62 times. Retail investors also showed strong interest, with their category subscribed over 10 times. The overall subscription figure for the IPO was approximately 39 times, attracting around 16 lakh applications.
Listing Day Performance and Post-Listing Returns
Upon listing, JSW Infrastructure shares debuted at ₹143, marking an impressive 20% listing gain. The stock even hit a 20% upper circuit on the same day. Post-listing, the company has shown strong momentum. From its IPO price, it has delivered approximately 74% returns. Within just 6-7 months of listing, the company saw a significant surge, moving by 127% (or 107%). This strong performance was attributed to good quarterly numbers and the strong brand value associated with the JSW Group.
JSW Cement IPO: Key Details and Allotment Overview
The JSW Cement IPO opened for application on August 7 and closed on August 11. Its listing is scheduled for August 14 on both BSE and NSE.
Issue Dates and Listing Information
The IPO was open for applications from August 7 to August 11, with the listing expected on August 14.
Issue Size, Retail Allocation, and Promoter Holding
The total issue size for JSW Cement is ₹3600 crore. A notable difference from JSW Infrastructure is the retail allocation, which stands at 35% for JSW Cement, significantly higher than the 10% in the previous IPO. Approximately 84,336 retail investors have been allocated shares in this IPO. Post-IPO, the promoter holding in JSW Cement will be 72.33%, down from the pre-IPO 78.61%, still indicating a substantial stake.
Anchor Investor Lock-in Periods
On August 6, anchor investors were offered 7,34,69,386 equity shares valued at ₹1080 crore. The lock-in period for 50% of these shares will end on September 11, while the remaining 50% will be available for sale on September 10. Allotment status was made available on the registrar’s site in the morning. Refunds for non-allottees are expected by tomorrow, and shares are anticipated to be credited to demat accounts by tomorrow morning or late night.
Subscription Response and Underlying Factors for JSW Cement IPO
Unlike JSW Infrastructure, the JSW Cement IPO did not receive an equally strong subscription response.
Category-wise Subscription
In the QIB category, the IPO was subscribed approximately 17 times, which can still be considered a good response, especially in the final hours. The HNI category saw a subscription of over 11 times, with the Small HNI category subscribed around 8.24 times. The retail category was subscribed 1.91 times, meaning that most retail applicants who did not make mistakes received an allotment.
Reasons for Moderate Response
The primary reasons for the more subdued response compared to JSW Infrastructure include a decline in the company’s revenue (2025 vs. 2024) and a fall in profit (2024 vs. 2023). Additionally, the company has reported operating at a loss. Despite being associated with the well-regarded JSW Group, these financial indicators likely contributed to the less enthusiastic investor response.
Grey Market Premium (GMP) & Listing Day Expectations
Current grey market premium trends suggest a potential listing gain of around 3% to 4% for JSW Cement.
Projected Listing Gain
Based on the grey market premium, a modest listing gain of 3% to 4% is anticipated.
Market Conditions and Potential Momentum
The broader market conditions will play a significant role. Today saw a positive closing for the Nifty, above 24,500. If the Nifty continues this positive trend tomorrow and maintains positive momentum between 10:00 AM and 10:30 AM, JSW Cement could see some positive momentum after its listing. Conversely, if the stock lists at a discount, it could face heavy selling pressure from retailers, leading to further declines. A positive listing might generate some mild positive momentum, though not as strong as seen in some other recent listings.
Listing Day Strategy for JSW Cement IPO
Given the current market sentiment and subscription figures, a measured approach is recommended for JSW Cement’s listing day.
For Allottees: Risk Management
- Risk-Takers: May consider holding shares with a stop-loss set 5% to 10% below the cut-off price.
- Non-Risk-Takers: Can plan to hold with the cut-off price itself as a stop-loss.
For Fresh Buyers: Wait and Watch Approach
Those considering fresh buying should adopt a “wait and watch” strategy. It would be prudent to observe the initial momentum and wait for clear positive trends before making a buying decision.
Personal Strategy for Allotted Shares
For those who have received an allotment, a specific strategy involves identifying the low point between 10:00 AM and 10:30 AM on the listing day. This low can then be used as a stop-loss for the day. If the price breaks below this low and a subsequent candle also closes lower, an exit strategy should be considered. This approach can be extended to future trading days, using the previous day’s low as a reference point.
Long-Term Outlook
From a long-term perspective, being a part of the JSW Group is generally a positive factor for the company. However, for immediate listing gains, the outcome will largely depend on market dynamics, as the current grey market premium does not indicate a significant 20-30% gain. It is advisable to wait and observe before making any long-term commitments based solely on listing day performance.
