JSW Cement, a key player in the Indian cement industry and part of the diversified JSW Group led by Sajjan Jindal, has filed a draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (Sebi) for an initial public offering (IPO) valued at Rs 4,000 crore. This substantial public offering will feature a fresh issue of equity shares worth Rs 2,000 crore, alongside an offer for sale (OFS) amounting to Rs 2,000 crore by existing investor shareholders.
The OFS component includes significant share divestments: AP Asia Opportunistic Holdings Pte Ltd and Synergy Metals Investments Holding Ltd will each offload shares valued at Rs 937.5 crore, while the State Bank of India (SBI) will sell shares worth Rs 125 crore. The proceeds from this IPO will be strategically allocated, with Rs 800 crore earmarked for part-financing the establishment of a new integrated cement unit in Nagaur, Rajasthan. Additionally, Rs 720 crore will be directed towards the prepayment or repayment of existing borrowings. The remainder of the funds will be used for general corporate purposes, though this allocation will not exceed 25% of the total gross proceeds.
As of March 31, 2024, JSW Cement’s total liabilities stand at Rs 8,933.42 crore, encompassing a Rs 1,678.90 crore borrowing, Rs 1,184.40 crore in creditor dues (excluding micro and small enterprises), and other financial liabilities amounting to Rs 842.02 crore. The company’s revenue from operations for FY24 was reported at Rs 6,028.10 crore, up from Rs 5,836.72 crore in FY23 and Rs 4,668.57 crore in FY22. Net profit for FY24 was Rs 62 crore, compared to Rs 104 crore in the previous fiscal year.
JSW Cement currently operates with an installed grinding capacity of 20.60 million tonnes per annum (MTPA) and aims to expand its aggregate capacity to 60 MTPA. Its manufacturing units are located across Karnataka, Andhra Pradesh, West Bengal, Odisha, and Maharashtra. The cement industry is experiencing significant consolidation, with leading players like UltraTech Cement and Adani Group’s Ambuja Cement ramping up their capacities through acquisitions and expansions. UltraTech aims to exceed 200 MTPA by FY27, while Adani Group targets a 140 MTPA capacity by FY28, bolstering its position in the sector.
JSW Cement’s IPO will be managed by a consortium of financial institutions, including JM Financial Ltd, Axis Capital Ltd, Citigroup Global Markets India Private Ltd, DAM Capital Advisors Ltd, Goldman Sachs (India) Securities Private Ltd, Jefferies India Private Ltd, Kotak Mahindra Capital Company Ltd, and SBI Capital Markets Ltd. This move is poised to bolster the company’s financial standing and support its ambitious expansion plans.
