Sajjan Jindal-led JSW Group owned JSW Cement has filed preliminary papers with the capital markets regulator SEBI to raise Rs 4,000 crore via initial public offering.
Moneycontrol was the first to report the listing plans of JSW Cement on January 10 and also report the DRHP filing news of JSW Cement on August 16. This will be the major public issue in the cement sector since Nuvoco Vistas Corporation's Rs 5,000 crore IPO in August 2021.
The IPO is a combination of fresh issuance of equity shares worth Rs 2,000 crore, and an offer-for-sale (OFS) of Rs 2,000 crore by the existing shareholders.
Investors AP Asia Opportunistic Holdings Pte, and Synergy Metals Investments Holding will be selling shares worth Rs 937.5 crore each in the OFS, while State Bank of India will sell shares worth Rs 125 crore. Their weighted average cost of acquisition was Rs 65.19 per equity share.
Promoters hold 78 percent shareholding (assuming full conversion of convertible securities as a percentage of diluted share capital), while 19.43 percent shares are owned by public shareholders and the remaining 2.57 percent stake is held by Employee Trusts.
Selling shareholders AP Asia Opportunistic Holdings Pte, State Bank of India, and Synergy Metals Investments Holding hold 16 crore CCPS (compulsory convertible preference shares), which will be converted into 24.54 crore equity shares before the filing of Red Herring Prospectus with the Registrar of Companies (ROC). In terms of percentage, post conversion, AP Asia Opportunistic Holdings Pte, and Synergy Metals Investments Holding will hold 9.1 percent stake each, while State Bank of India will own 1.21 percent shares.
JSW Cement that had installed grinding capacity of 20.60 MMTPA (million metric tonnes per annum) and installed clinker capacity of 6.44 MMTPA as of March 2024 may consider raising Rs 400 crore through a preferential offer or any other method, prior to filing of the Red Herring Prospectus with the ROC. If such pre-IPO placement is completed, the company will reduce the fresh issue size to the extent of such pre-IPO placement.
The green cement manufacturer will spend Rs 800 crore out of the net fresh issue proceeds for establishing a new integrated cement unit at Nagaur, Rajasthan, and further Rs 720 crore will be utilised for repaying debt. The remainder fresh issue money will be used for general corporate purposes.
It had a total indebtedness of Rs 5,835.76 crore under the various financing arrangements as of March 2024.
The company that started operations in 2009 in the southern region of India and now operating seven plants in India is expected to increase its installed grinding capacity from 20.60 MMTPA to 40.85 MMTPA and installed clinker capacity from 6.44 MMTPA to 13.04 MMTPA. Further, it intends to increase the total capacity to 60.00 MMTPA.
In fiscal 2017, JSW Cement acquired Shiva Cement which operates clinker unit.
The JSW Group company that compares with listed peers like UltraTech Cement, Ambuja Cements, Shree Cement, Dalmia Bharat, and JK Cement has recorded restated profit at Rs 62 crore for the fiscal year 2024, down from Rs 104 crore in the previous fiscal despite strong operating numbers. Other income during the same period also dropped to Rs 86.5 crore, from Rs 145.5 crore.
However, revenue from operations grew by 3.3 percent on-year to Rs 6,028.1 crore in the year ended March FY24. EBITDA (earnings before interest, tax, depreciation and amortisation) during FY24 grew by 36.9 percent to Rs 932.9 crore with margin expanding by 380 bps to 15.5 percent compared to previous fiscal.
JSW Infrastructure IPO launched in October 2023 was the first public issue from the JSW Group in 13 years.
JM Financial, Axis Capital, Citigroup Global Markets India, DAM Capital Advisors, Goldman Sachs (India) Securities, Jefferies India, Kotak Mahindra Capital Company, and SBI Capital Markets are acting as the merchant bankers to the issue.
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