JSW Cement, part of the infrastructure-to-metals JSW Group, is likely to file draft papers with the markets regulator shortly to raise as much as Rs 4,000 crore via an initial public offering (IPO), multiple people aware of the development said.
The initial share sale would be the cement sector's first major offering since Nuvoco Vistas' Rs 5,000 crore IPO in August 2021. Moneycontrol was the first to report the listing plans of JSW Cement on January 10.
"The plan is to file the draft red herring prospectus for JSW Cement in the next few days," said one of the persons above.
A second person told Moneycontrol that the IPO will likely include new shares worth Rs 2,000 crore and an offer for sale of an equal amount.
"The offer for sale will facilitate partial exits for external investors like Apollo Global Management, Synergy Metals Investment Holding and SBI," the second person added.
Shares of Shiva Cement shot up by as much as 15 percent in intraday trading after the Moneycontrol report regarding promoter company JSW Cement's IPO plans. Shiva Cement was acquired by the JSW Group in 2017 and supplies clinker - a key component in cement production - to the parent entity.
The so-called green cement maker aims to mop up growth capital via the initial share sale and become one of the country's top five cement producers, with a capacity of 60 million tonnes per annum within the next five years.
When contacted, a JSW Group spokesperson declined to comment.
Incidentally, the listing of JSW Infrastructure in October marked the group's first public offering in 13 years.
JM Financial, Kotak Mahindra Capital, Jefferies, Axis Capital, DAM Capital, Citi, Goldman Sachs and SBI Capital are the investment banks managing the share sale.
On May 21, JSW Cement said it plans to invest around Rs 3,000 crore to set up a cement manufacturing facility in the Nagaur district of Rajasthan. The greenfield, integrated facility will be funded by a mix of debt and equity, the company added.
It is also reportedly one of the suitors in the race to acquire the promoter stake in Orient Cement. JSW Cement's move to make a debut on Dalal Street comes at a time when the cement sector is witnessing an intense M&A tussle between market leader Ultratech Cement of the Birla group and the ACC-Ambuja combine of the Adani group.
A closer look at JSW Cement
JSW Cement raised up to Rs. 1,500 crore 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 19, 2021, Moneycontrol reported that the two global investors were eyeing a minority stake in the firm. In December 2021, SBI picked up a minority stake.
As of March 2024, JSW Cement's capacity stood at 20.6 mtpa distributed between south (11.0 mtpa), east (5.1 mtpa) and west (4.5 mtpa).
According to a report on the firm dated March 1 by Crisil Ratings, "The company aims to strengthen its geographical reach further as it plans to enter into the north region with cement capacity of 5 mtpa (through 2.5 mtpa unit in Rajasthan and 2.5 mtpa unit in Punjab) by FY27. Combined with a planned 4 mtpa brownfield addition in its Vijayanagar unit and 1 mtpa addition in subsidiary Shiva Cement Ltd, it aims to reach a total capacity of 30.6 mtpa by FY27."
For the period ended March 31, 2024, JSW Cement posted revenues of Rs 5,845 crore and a profit of Rs 59 crore. It manufactures various grades of cements such as PSC (Portland Slag Cement), OPC (ordinary portland cement), CHD (Concreel HD), GGBS (ground granulated blast furnace slag) and CPC (composite cement).
According to its website, the firm has manufacturing units at Vijayanagar in Karnataka, Nandyal in Andhra Pradesh, Salboni in West Bengal, Jajpur in Odisha and Dolvi in Maharashtra. Besides, JSW Cement, through its subsidiary Shiva Cement, also operates a clinker unit in Odisha. The company is present across the entire value-chain of building materials comprising cement, concrete and construction chemicals.
Its portfolio of green building materials includes "GreenCrete", India’s greenest RMC product combining high durability of concrete and lower carbon emissions, the website adds.
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