JSW Cement to Raise Rs 4,000 Crore Through IPO for Expansion and Debt Repayment
JSW Cement, one of the leading player in India’s cement industry, has received approval from the Securities and Exchange Board of India (SEBI) to raise Rs 4,000 crore through an Initial Public Offering (IPO). This marks a pivotal moment for the company as it plans to expand its operations and enhance its financial standing. The IPO comprises a fresh issue of equity shares worth Rs 2,000 crore, along with an Offer-for-Sale (OFS) of an equal value by existing investors. The approval comes after a thorough review process by SEBI, which initially put the approval on hold in September 2024 before clearing it in early January 2025.
JSW Cement, part of the diversified JSW Group, aims to use the funds raised through the IPO for strategic purposes, which include financing a new integrated cement plant in Nagaur, Rajasthan. The plant, expected to enhance the company’s production capabilities, aligns with JSW Cement’s objective to increase its total installed capacity to 60 million tonnes per annum (MTPA). The company’s current grinding capacity stands at 20.6 MTPA, with operations spread across multiple states such as Karnataka, Andhra Pradesh, West Bengal, Odisha, and Maharashtra.
The Offer-for-Sale (OFS) component of the IPO includes share divestment by major stakeholders such as AP Asia Opportunistic Holdings Pte Ltd, Synergy Metals Investments Holding Ltd, and the State Bank of India (SBI). AP Asia and Synergy Metals will offload shares valued at Rs 937.5 crore each, while SBI will divest shares worth Rs 125 crore. This move is expected to provide liquidity to these investors while giving new investors an opportunity to participate in the company’s growth.
The proceeds from the IPO will be utilized for various purposes. Rs 800 crore will be directed towards financing the establishment of the new cement unit in Rajasthan. This project is crucial for meeting the growing demand for cement in the country’s infrastructure and housing sectors. Additionally, Rs 720 crore will be used to prepay or repay some of the company's existing borrowings, strengthening its financial position. The remaining funds will be allocated to general corporate purposes, which include operational costs and expanding its market reach.
JSW Cement’s financial performance has been steadily improving. In the fiscal year 2024, the company reported a revenue of Rs 6,028.1 crore, marking a growth from Rs 5,836.7 crore in FY23. Although its profit stood at Rs 62 crore for FY24, a decrease from the previous year’s profit of Rs 104 crore, the company’s long-term outlook remains positive due to its strong market position and expanding capacity.
The company’s expansion strategy is aligned with India’s growing demand for cement, driven by ongoing infrastructure development projects, urbanization, and government initiatives like the Pradhan Mantri Awas Yojana (PMAY), which aims to provide affordable housing for all. Cement is a crucial material for these projects, and JSW Cement is positioning itself to capitalize on this demand.
JSW Cement operates a diversified manufacturing base with plants in various regions, including a clinker unit in Odisha through its subsidiary Shiva Cement. The company is focused on enhancing its production facilities to meet the increasing demand in the domestic and international markets. Its existing plants at Vijayanagar (Karnataka), Nandyal (Andhra Pradesh), Salboni (West Bengal), Jajpur (Odisha), and Dolvi (Maharashtra) are expected to contribute significantly to its growth.
As part of the IPO process, a team of prominent financial institutions, including JM Financial Ltd, Axis Capital Ltd, Citigroup Global Markets India Pvt Ltd, DAM Capital Advisors Ltd, Goldman Sachs (India) Securities Pvt Ltd, Jefferies India Pvt Ltd, Kotak Mahindra Capital Company Ltd, and SBI Capital Markets Ltd, has been entrusted with managing the offering. Their expertise will be crucial in ensuring the smooth execution of the IPO and in generating investor interest.
