JSW Cement, a subsidiary of the Sajjan Jindal-led JSW Group, has secured approval from the Securities and Exchange Board of India (SEBI) for its ₹4,000 crore initial public offering (IPO). The company submitted its draft red herring prospectus (DRHP) on August 17, 2024, and received the regulatory nod in early January 2025.
IPO Structure
The IPO comprises a fresh equity issue of ₹2,000 crore and an offer-for-sale (OFS) of ₹2,000 crore by existing shareholders, including Apollo Global Management, Synergy Metals Investment Holding, and the State Bank of India (SBI).
Utilization of Proceeds
The funds raised are earmarked for several strategic initiatives:
- New Integrated Cement Plant: Approximately ₹800 crore will be allocated to establish a new integrated cement unit in Nagaur, Rajasthan.
- Debt Repayment: Around ₹720 crore is designated for repaying certain outstanding borrowings, aiming to strengthen the company’s balance sheet.
- General Corporate Purposes: The remaining funds will support various corporate activities to enhance operational efficiency and market competitiveness.
Strategic Expansion Plans
JSW Cement is committed to expanding its production capabilities, with plans to double its installed grinding capacity to 40.85 million metric tonnes per annum (MMTPA) and clinker capacity to 13.04 MMTPA in the coming years. The company has set an ambitious long-term target of achieving a capacity of 60 MMTPA.
Market Context
This IPO marks the first significant public offering in the cement sector since Nuvoco Vistas’ ₹5,000 crore IPO in 2021. It also follows the JSW Group’s successful listing of JSW Infrastructure in October 2023, ending a 13-year hiatus for the conglomerate in public market listings.
The cement industry is currently experiencing intense competition, highlighted by mergers and acquisitions involving major players such as UltraTech Cement and the ACC-Ambuja combine. JSW Cement’s entry into the public market is poised to be a significant development within this dynamic sector.
Financial Performance
In the fiscal year 2022-23, JSW Cement reported a revenue of ₹5,837 crore, an operating EBITDA of ₹817 crore, and a profit after tax of ₹59 crore. The company’s capacity utilization stood at 57.50%, with a 9% increase in cement and ground granulated blast furnace slag (GGBS) production.
Industry Outlook
The Indian cement market is projected to nearly double to $49.24 billion by 2029, driven by substantial infrastructure investments and robust demand for construction materials. JSW Cement aims to capitalize on this growth trajectory through its expansion plans and the upcoming IPO.
Investment banks, including JM Financial and Kotak Mahindra Capital, are managing the IPO process. The company is expected to finalize its listing in the coming months, subject to market conditions.
This strategic move underscores JSW Cement’s commitment to strengthening its market position and contributing to India’s infrastructure development.
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