JSW Cement Set for Rs 4,000-Crore IPO Amid Sector M&A Activity

JSW Cement, the cement business from the JSW Group led by Sajjan Jindal, would raise Rs 4,000 crore and was likely to get SEBI approval in respect of its proposed IPO. According to sources familiar with the issue, DRHP was filed on August 17, 2024. Approval is going to come for this IPO next week from SEBI. This would be the first big IPO in the cement space after Nuvoco Vistas raised Rs 5,000 crore through the IPO route back in August 2021.

Fresh equity shares worth Rs 2,000 crore would be issued, and existing shareholders such as Apollo Global Management, Synergy Metals Investment Holding, and SBI would do the OFS for the same amount of Rs 2,000 crore. Timing would depend on the date given by SEBI for approval in addition to investor roadshows conducted.

JSW Cement is listing at a time when the cement sector is witnessing a massive consolidation wave with the M&A battle between market leader UltraTech Cement of the Birla Group and the ACC-Ambuja combine of the Adani Group still on. The company had already consolidated its position by buying Shiva Cement in 2017, which supplies crucial components like clinker to its operations.

The share sale will be facilitated by a banking group comprising JM Financial, Kotak Mahindra Capital, and Jefferies. Khaitan & Co are legal counsel on the deal. JSW Cement would use all the proceeds earned from the initial public offering toward expanding its capacities and reducing debts. As of March 2024, the company had an installed grinding capacity of 20.60 million metric tonnes per annum (MMTPA) and aims to expand its grinding capacity to 40.85 MMTPA and clinker capacity to 13.04 MMTPA at the end of the expansion. A significant amount of funds will be spent on establishing a new integrated cement unit in Nagaur, Rajasthan, and on debt repayment.

Currently operating seven plants in India, JSW Cement, founded in 2009, stands ready to grow further in the industry.