JSW Cement Secures SEBI Nod for ₹4,000 Crore IPO

JSW Cement, part of the Sajjan Jindal-led JSW Group, has received approval from the Securities and Exchange Board of India (SEBI) for its much-anticipated ₹4,000 crore initial public offering (IPO). This IPO marks a significant moment for the cement sector, as it is the first major offering since Nuvoco Vistas' ₹5,000 crore IPO in August 2021. The move comes amid heightened M&A activity in the cement industry, notably between the Birla Group and the Adani Group.

The IPO will consist of a fresh issue of equity shares worth ₹2,000 crore and an offer-for-sale (OFS) of ₹2,000 crore by existing shareholders, including Apollo Global Management, Synergy Metals Investment Holding, and SBI. The company had initially filed its draft red herring prospectus on August 17, 2024, with the SEBI approval process temporarily paused due to pending proceedings involving the promoter family. With the green signal now in place, the launch timing will depend on investor roadshows and other market conditions.

JSW Cement’s IPO comes as the company aims to bolster its position in the market. The proceeds from the fresh issue are earmarked for several strategic initiatives, including ₹800 crore for establishing a new integrated cement unit in Nagaur, Rajasthan, and ₹720 crore for debt repayment. The remaining funds will be allocated for general corporate purposes.

The company's growth plans are ambitious, with an installed grinding capacity of 20.60 million metric tonnes per annum (MMTPA) and an installed clinker capacity of 6.44 MMTPA as of March 2024. JSW Cement aims to increase these capacities to 40.85 MMTPA and 13.04 MMTPA, respectively, with a long-term goal of reaching 60.00 MMTPA. Additionally, the company may consider raising ₹400 crore through a pre-IPO placement, which could reduce the fresh issue size.

JSW Cement's IPO also signals the group's ongoing expansion in public markets, following the listing of JSW Infrastructure in October 2023, which was the group's first public offering in 13 years. The offering will be managed by prominent investment banks, including JM Financial, Kotak Mahindra Capital, Jefferies, and others, with legal counsel from Khaitan & Co.

Conclusion

JSW Cement's IPO represents a significant development in the Indian cement industry, positioning the company for further growth and expansion while offering investors an opportunity to participate in its ambitious future plans