JSW Cements to raise Rs.4000 Crores finance through IPO, have presented their draft papers with SEBI, Click here to know more about the IPO:

JSW Cement, a subsidiary of JSW Group, is set to initiate an initial public offering (IPO) to raise funds up to ₹4,000 crore. The draft red herring prospectus was submitted to the Securities and Exchange Board of India (SEBI) on Friday, August 16.

The IPO will consist of a fresh issue and an offer-for-sale (OFS), each component aiming to raise ₹2,000 crore. The State Bank of India (SBI), a current investor, plans to sell shares valued at ₹125 crore through the OFS. Additionally, AP Asia Opportunistic Holdings Pte Ltd and Synergy Metals Investments Holding Ltd will each divest shares amounting to ₹937.5 crore.

The IPO process for the company is being managed by JM Financial Ltd, Axis Capital Ltd, Citigroup Global Markets India Private Ltd, DAM Capital Advisors Ltd, Goldman Sachs (India) Securities Private Ltd, Jefferies India Private Ltd, Kotak Mahindra Capital Company Ltd, and SBI Capital Markets Ltd.

How IPO proceeds will be used:

The company plans to allocate ₹800 crore towards partially financing the establishment of a new integrated cement unit in Nagaur, Rajasthan, and ₹720 crore for the prepayment or repayment of its outstanding loans.

 The remaining funds will be used for general corporate purposes. However, it specified that the amount used for general corporate purposes will not surpass 25% of the total gross proceeds.

JSW Cement's financials:

As of March 31, 2024, JSW Cement reported a total liability of ₹8,933.42 crore. This includes borrowings of ₹1,678.90 crore, dues to creditors (excluding micro and small enterprises) amounting to ₹1,184.40 crore, and other financial liabilities totaling ₹842.02 crore.

For the fiscal year 2024, the company's operational revenue was ₹6,028.10 crore, compared to ₹5,836.72 crore in FY23 and ₹4,668.57 crore in FY22.

The profit for the year stood at ₹62 crore in FY24, down from ₹104 crore in FY23.

As of March 31, 2024, JSW Cement has an installed grinding capacity of 20.60 million tonnes per annum (MTPA), with a strategic goal to expand its capacity to 60 MTPA.

Currently, the company operates manufacturing units in Vijayanagar, Karnataka; Nandyal, Andhra Pradesh; Salboni, West Bengal; Jajpur, Odisha; and Dolvi, Maharashtra.

India's 6th largest cement firm:

JSW Cement ranks as the sixth largest entity in the segment, with the Aditya Birla Group's UltraTech Cements leading the pack.

The industry is undergoing consolidation, with the top five entities - UltraTech Cement, Shree Cement, Ambuja Cement (inclusive of ACC Ltd), Dalmia Bharat, and Nuvoco Vistas - holding around 54 percent of the total market share in FY24.

UltraTech and the Adani Group's Ambuja Cement are expanding their capacities through acquisitions and brownfield projects.

Following the acquisitions of Kesoram Cement and India Cements, and with ongoing expansion plans, UltraTech anticipates its total cement capacity to exceed the 200 MTPA mark by FY27, up from its current capacity of over 150 MTPA.

The Adani Group, which entered the cement sector in September 2022 by purchasing Ambuja Cement from the Swiss company Holcim for USD 6.4 billion (approximately Rs 51,000 crore), has set a goal to reach a 140 MTPA capacity by FY28.

Led by Gautam Adani, the group now owns ACC Ltd and has acquired Sanghi Industries and ACCPL, making it the second-largest cement manufacturer. In June, it announced the acquisition of Penna Cement, based in Hyderabad, for an enterprise value of Rs 10,422 crore, boosting its capacity to 93 MTPA.

Additionally, JSW Cement operates a clinker unit in Odisha through its subsidiary, Shiva Cement.