(Reuters) -Shares of JSW Cement debuted 4% higher on Thursday valuing the firm at $2.38 billion as investors looked past broader market jitters to back the company’s capacity expansion plans and push into new regional markets.
The stock listed at 153.50 rupees on the National Stock Exchange, above its 147 rupees issue price and just above its targeted $2.3 billion. It was last up 2.7% at 151.06 rupees as of 10:21 a.m. IST.
India, the world’s second-largest cement producer, is riding a robust sector outlook, with the government’s infrastructure and housing push expected to power demand growth through the decade, while prices rebound from multi-year lows hit last fiscal year.
JSW Cement, with its seven plants in southern, eastern and western India, is a relatively smaller player in an industry dominated by companies such as Aditya Birla-owned UltraTech Cement and Gautam Adani-backed Ambuja Cement.
The company will use proceeds from the IPO for setting up a factory in the limestone-rich state of Rajasthan, it said in its prospectus.
Ventura Securities said JSW Cement’s capacity ramp-up will expand its reach and boost profits, while its ties to the JSW Group offer brand strength and easy access to raw materials like slag and power via group companies in steel, energy and marine infrastructure.
JSW Group holds a nearly 70% stake in the cement maker.
The $413 million initial public offering was oversubscribed nearly eight times earlier this week, driven by institutional investors whose bids were nearly 16 times their allotted quota.
($1 = 87.4320 Indian rupees)
(Reporting by Hritam Mukherjee and Kashish Tandon in Bengaluru; Editing by Nivedita Bhattacharjee)
