JSW Cement IPO is coming Rs 4,000 crore issue, as the company gets approval from SEBI
JSW Cement IPO – JSW Cement a subsidiary of the JSW Group led by Sajjan Jindal, has received approval from Sebi for its Rs 4,000 crore initial public offering, according to industry sources familiar with the matter who spoke to Moneycontrol on the condition of anonymity. The company submitted its draft red herring prospectus on August 17.
Moneycontrol reported on JSW Cement’s plans to go public on January 10, 2024, and also reported on the filing plans on August 16.
However, on September 3, Moneycontrol also reported that Sebi had temporarily halted the approval process due to an ongoing legal matter involving the promoter family.
The approval for the initial public offering has now been granted by the market regulator. A decision on the timing of the launch will be made after investor roadshows and other considerations, as stated by one of the sources.
The offering will consist of a combination of fresh equity shares worth Rs 2,000 crore and an offer-for-sale (OFS) of Rs 2,000 crore by existing shareholders. Investors such as Apollo Global Management, Synergy Metals Investment Holding, and SBI will participate in the OFS.
This IPO will be the first major offering in the cement sector since Nuvoco Vistas’ Rs 5,000 crore IPO in August 2021. Notably, JSW Infrastructure’s listing in October 2023 marked the group’s first public offering in 13 years.
JSW Cement’s decision to debut on the stock market comes at a time when the cement industry is experiencing a competitive M&A landscape, with Ultratech Cement of the Birla group and the ACC-Ambuja combine of the Adani group leading the way. JSW Cement acquired Shiva Cement in 2017, which supplies clinker – a crucial component in cement production – to the parent company.
The share sale is being managed by investment banks including JM Financial, Kotak Mahindra Capital, Jefferies, Axis Capital, DAM Capital, Citi, Goldman Sachs and SBI Capital.
JSW Cement’s Expansion Plans
As of March 2024, JSW Cement boasted an installed grinding capacity of 20.60 MMTPA (million metric tonnes per annum) and an installed clinker capacity of 6.44 MMTPA. Looking ahead, the company is considering raising Rs 400 crore through a preferential offer or alternative method before filing the Red Herring Prospectus with the ROC. Should this pre-IPO placement come to fruition, JSW Cement will adjust the size of the fresh issue accordingly.
The environmentally conscious cement manufacturer plans to allocate Rs 800 crore from the fresh issue proceeds towards establishing a new integrated cement unit in Nagaur, Rajasthan. An additional Rs 720 crore will be used to repay debt, with the remaining funds earmarked for general corporate purposes.
JSW Cement, which commenced operations in 2009 in southern India and currently operates seven plants across the country, is poised to significantly increase its installed grinding capacity to 40.85 MMTPA and clinker capacity to 13.04 MMTPA. The company’s ultimate goal is to boost its total capacity to 60.00 MMTPA.
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