JSW Cement has received SEBI approval to raise Rs 4,000 crore via IPO

JSW Cement, part of the Sajjan Jindal-led JSW Group, has received approval from capital market regulator SEBI to raise Rs 4,000 crore through an initial public offering. The company filed IPO papers with SEBI in August 2024.

Last September, SEBI had suspended JSW Cement’s IPO application without specifying reasons. However, the application was approved on Monday.

The IPO, with a face value of Rs 10 lakh crore each, will be a combination of fresh issue of shares worth Rs 2,000 crore and an offer for sale of Rs 2,000 crore by existing investors.

The offer for sale consists of Rs 937 crore from AP Asia Opportunistic Holdings, Rs 937 crore from Synergy Metals Investments Holding, and Rs 125 crore from State Bank of India.

Placement before IPO

The Company, in consultation with its lead book-running managers, may consider further issue of equity shares through preferential offer or any other mode in the amount of Rs 400 crore as deposit prior to the IPO. If this placement is completed, the size of the new version will be reduced.

The company plans to deploy Rs 800 crore to fund the cost of setting up a new integrated cement unit in Nagaur, Rajasthan, and Rs 720 crore for pre-payment of outstanding loans and general corporate purposes.

JSW Cement, which has a manufacturing capacity of 19 million tons per annum, aims to achieve a production capacity of 60 million tons per annum. Currently, it has manufacturing units in Vijayanagar in Karnataka, Nandyal in Andhra Pradesh, Salboni in West Bengal, Jajpur in Odisha, and Dolvi in ​​Maharashtra.

Sales volume

The company achieved a 31 percent increase in sales volume in FY23, excluding sales from JSW Cement FZC, significantly ahead of the industry average growth of 6 percent, according to the CRISIL report.

During this period, JSW Cement’s installed grinding capacity and sales volume grew at CAGRs of 14 percent and 19 percent, respectively, compared to industry averages of 7 percent and 8 percent.

JM Financial, Axis Capital, Citigroup Global Markets India, DAM Capital Advisors, Goldman Sachs (India) Securities, Jefferies India, Kotak Mahindra Capital and SBI Capital Markets are the lead managers running the book, while KFin Technologies is acting as the registrar for the offering. The equity shares will be listed on the BSE and NSE.