JSW CEMENT IPO
Market regulator Securities and Exchange Board of India (SEBI) has granted approval to JSW Cement, a part of Sajjan Jindal’s JSW Group, to raise ₹4,000 crore through an Initial Public Offering (IPO). This marks a significant development for the company as it seeks to expand its operations and strengthen its market position.
IPO Details
The proposed IPO comprises two components:
- Fresh Issue: Equity shares aggregating to ₹2,000 crore.
- Offer-for-Sale (OFS): Shares worth ₹2,000 crore will be sold by existing investor shareholders, including Synergy Metals Investments Holding Ltd, AP Asia Opportunistic Holdings Pte Ltd, and State Bank of India (SBI).
JSW Cement initially filed its draft IPO papers with SEBI in August 2023, with a follow-up submission in September. After an interim hold, SEBI gave its observation—effectively an approval—last week, allowing the company to proceed with its IPO plans.
Utilization of IPO Proceeds
According to the Draft Red Herring Prospectus (DRHP), the fresh issue proceeds will be allocated as follows:
- New Cement Facility: ₹800 crore will go toward establishing an integrated cement facility in Nagaur, Rajasthan.
- Debt Reduction: ₹720 crore will be used to clear outstanding debts.
- Corporate Purposes: The remaining funds will address general corporate requirements.
JSW Cement’s Financial Performance
JSW Cement has showcased steady growth in its revenue and operational capacity over the years:
- Revenue from Operations:
- FY24: ₹6,028.10 crore
- FY23: ₹5,836.72 crore
- FY22: ₹4,668.57 crore
- Profit After Tax:
- FY24: ₹62 crore
- FY23: ₹104 crore
The company’s installed grinding capacity stands at 20.60 million tonnes per annum (MTPA) as of March 2024. It operates manufacturing facilities in Karnataka, Andhra Pradesh, West Bengal, Odisha, and Maharashtra, alongside a clinker unit managed by its subsidiary, Shiva Cement, in Odisha.
Strategic Goals
The Nagaur facility in Rajasthan represents a significant step in JSW Cement’s expansion strategy. Additionally, reducing debt and funding corporate objectives will further enhance the company’s financial stability and operational efficiency.
IPO Lead Managers
The IPO’s book-running lead managers include:
- Axis Capital Ltd
- JM Financial Ltd
- DAM Capital Advisors Ltd
- Citigroup Global Markets India Pvt Ltd
- Goldman Sachs (India) Securities Pvt Ltd
- Kotak Mahindra Capital Company Ltd
- SBI Capital Markets Ltd
- Jefferies India Pvt Ltd
Conclusion
The JSW Cement IPO is poised to attract significant attention, given its strong financial track record, strategic expansion plans, and backing by the JSW Group. Investors should monitor upcoming announcements regarding the IPO’s price band and subscription dates to make informed decisions.
Stay tuned for further updates on this promising IPO.