Sajjan Jindal's JSW Group has tapped investment bankers to facilitate the initial public offering of group company JSW Cement, according to multiple people familiar with the development.
"As of now, the target is to raise up to Rs 6,000 crore, mop up growth capital and fund the company's aggressive expansion plans," one of the people cited above said, requesting anonymity. He added that a final decision on the size of the share sale had not been made.
The plan to list JSW Cement, led by Parth Jindal, follows the recent IPO of JSW Infrastructure, which marked the group's first public offering in 13 years.
The so-called green cement maker aims to become one of the top five cement producers in the nation, with a capacity of 60 million tonnes per annum within the next five years.
If JSW Cement's listing plans materialise, it would be the biggest IPO in the sector since the Rs 5,000 crore initial share sale of Nirma group-backed Nuvoco Vistas in August 2021.
Prior to Nuvoco Vistas, the last cement IPO in India was launched by Burnpur Cement way back in 2007.
According to a second person, "The deal was kicked off this week and a clutch of domestic and foreign investment banks have been tapped. JM Financial, Kotak Mahindra Capital, DAM Capital, Jefferies, Citi, Goldman Sachs and SBI Capital are some of the advisors on board. "
A third person familiar with the IPO told Moneycontrol that the proposed IPO could also provide a window for a partial exit by the private equity investors in JSW Cement, namely Apollo Global Management and Synergy Metals Investments Holding.
"The JSW Cement IPO has been in the works for a while and now that the JSW Infra IPO and the EV push with the JSW -MG Motor deal are both done, the focus will be on the cement arm's listing. The markets are also supportive so they believe the process should start now for a post election listing," added a fourth person.
All the four persons above spoke to Moneycontrol on the condition of anonymity.
A JSW group spokesperson declined to comment in response to an email query from Moneycontrol. An immediate comment or response could not be elicited from the investment banks.
Ultratech Cement, the ACC-Ambuja combine, Shree Cement, Dalmia Cement and Nuvoco Vistas are some of the key listed peers of JSW Cement. Their share prices have risen by 2 per cent to 28 per cent in the last six months.
JSW CEMENT: THE NEXT LEG OF GROWTH
In a report dated March 3, 2023, CRISIL Ratings said JSW Cement "will continue to benefit from healthy operating efficiency, increasing geographical presence with operationalisation of new capacities and overall healthy demand outlook for the cement sector."
The firm's revenues rose from 3,878 crore as of March 31, 2021 to Rs 4,677 crore as of March 31, 2022, according to data from CRISIL Ratings.
JSW Cement raised up to Rs. 1,500 crores from two global private equity investors, Apollo Global Management Inc. (through its managed funds) and Synergy Metals Investments Holding Ltd in July 2021.
On April 19th, 2021, Moneycontrol had first reported that the two global investors were eyeing a minority stake in the firm.
Last year in August, JSW Cement MD Parth Jindal told Mint in an interview that the firm planned to go public in 2024 and raise as much as Rs 4,000 crores.
Later, Jindal outlined the company's investment plans to Financial Express in September.
" We will be investing 18,000 crore to grow our capacity to 60 million tonne over the next five years from the present 21 MTPA by the end of this calendar year," he told the publication.
"There are about 50-75 MT of cement assets available for sale and we will be looking at inorganic opportunities too. But right now, expansion through the organic route is much cheaper," he added.
According to its website, JSW Cement has manufacturing units at Vijayanagar in Karnataka, Nandyal in Andhra Pradesh, Salboni in West Bengal, Jajpur in Odisha and Dolvi in Maharashtra. The company is present across the entire value-chain of building materials comprising cement, concrete and construction chemicals.
Its portfolio of green building material includes "GreenCrete", India’s greenest RMC product combining high durability of concrete and lower carbon emissions, the website adds.
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