JSW Cement plans to trim IPO size to $415 mn; eyes early August launch at $2.3 bn valuation

JSW Cement IPO

Parth Jindal led JSW Cement, a group company of diversified conglomerate JSW Group is planning to trim the size of its initial public offer (IPO) from the original $462 million (Rs 4,000 crore) to $415 million (Rs 3,600 crore) by reducing the primary component from Rs 2,000 crore to Rs 1,600 crore with the secondary component kept unchanged at Rs 2,000 crore, multiple industry sources in the know told Moneycontrol on the condition of anonymity.

“The UDRHP (updated draft red herring prospectus) has been filed and JSW Cement is gearing up to launch the IPO early next month, possibly in the week of August 4,” said one of the persons above.

The firm is targeting an IPO valuation of around $2.3 billion or Rs 20,000 crore , a second person said.

An email query sent to company officials remained unanswered at the time of publishing this article. The story will be updated if and when the company responds.

Investors like Apollo Global Management, Synergy Metals Investment Holding and SBI will participate in the offer-for-sale as per the DRHP.

The initial share sale would be the cement sector's first offering by a majority group since Nirma Group backed Nuvoco Vistas' Rs 5,000 crore IPO in August 2021. Incidentally, the listing of JSW Infrastructure in October 2023 marked the group's first public offering in 13 years.

JSW Cement's move to make a debut on Dalal Street comes on the back of the sector witnessing an intense m&a tussle between market leader Ultratech Cement of the Birla group and the ACC-Ambuja combine of the Adani group.

Shiva Cement was acquired by JSW Cement in 2017 and supplies clinker - a key component in cement production - to the parent entity.

JM Financial, Kotak Mahindra Capital, Jefferies, Axis Capital, Citi, Goldman Sachs , DAM Capital, and SBI Capital are the investment banks managing the share sale. Khaitan and Co is the legal counsel to the firm.

JSW Cement's expansion plans

JSW Cement focuses on manufacturing green cementitious products comprising blended cement (which includes portland slag cement and portland composite cement and ground granulated blast furnace slag. The firm also manufactures ordinary portland cement, clinker and a range of allied cementitious products such as ready-mix concrete, screened slag, construction chemicals and waterproofing compounds

The firm had an installed grinding capacity of 20.60 MMTPA (million metric tonnes per annum) and an installed clinker capacity of 6.44 MMTPA as of March 2024.  As per the DRHP, the fresh issue proceeds will be used for establishing a new integrated cement unit at Nagaur, Rajasthan, repaying debt and for general corporate purposes.

JSW Cement, which started operations in 2009 in the southern region of India and operates 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.

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