JSW Cement's IPO will hit the market at a time when its other listed competitors are working hard to expand their capacities and gain market share.

The money that the company will raise by issuing new shares. Out of which Rs 800 crore will be used to set up a new integrated unit at Nagaur in Rajasthan.

JSW Cement IPO

Another JSW Group company is gearing up to list in the domestic market. Group cement company JSW Cement has submitted draft documents to market regulator Securities and Exchange Board of India (SEBI).

JSW Cement's IPO could be worth Rs 4 thousand crore. New shares will be issued under this IPO. While existing shareholders will also reduce their stake under the Offer for Sale. It will be the biggest listing in the cement sector after three years. Earlier in August 2021, Nuvoco Vistas Corporation had an IPO of Rs 5 thousand crore.

JSW Group had earlier said that it would list its cement unit in the year 2024. The group's energy, ports and steel are already listed businesses. JSW Infrastructure was listed in the port vertical some time back.

In August last year, JSW Group heir and JSW Cement Managing Director Parth Jindal shared the listing plans for 2024, saying that the capital raised from the IPO would help the group reach its target of 60 million tonnes of capacity.

JSW Cement plans to triple the capacity of its cement business in four years. The company currently has a capacity of 20.6 million tonnes per annum, which it wants to increase to 60 million tonnes per annum.

The document submitted on Friday said that the money raised from the IPO will be used to finance the cement unit in Rajasthan, settle certain borrowings and for other general corporate purposes.

The company has also shared plans to expand in the markets of North and Central India. JSW Cement currently has a presence in South-East and West India. In May this year, the company said that it plans to invest about Rs 3,000 crore on setting up a new integrated cement manufacturing unit in Nagaur district of Rajasthan.

Private equity (PE) investors associated with JSW Cement include Apollo Global Management (through its managed funds) and Synergy Metals Investments Holding.

In July 2021, JSW Cement had signed agreements with these two global PE investors to raise up to Rs 1,500 crore. At that time, JSW Cement had said that the conversion of this investment into the company's common equity would depend on the company's future performance and the valuation determined at the time of the IPO.

JSW Cement's IPO is coming at a time when its listed competitors are competing to increase capacity and gain market share. Cement sales grew by 9 per cent in FY24.

Shareholding in the company

Investors under the Offer for Sale AP Asia Opportunities Holdings Pvt. and Synergy Metals Investment Holding will sell shares worth Rs 937.5 crore each. Apart from this, SBI will sell shares worth Rs 125 crore. The promoters own 78 percent of the company. While 19.43 percent is held by individuals and 2.57 percent by employee trusts.

7 plants across the country

JSW Cement started its business in South India in 2009. Now the company has 7 plants across the country. As of March 2024, their grinding capacity is 20.6 million tonnes per annum and clinker capacity is 64.4 lakh tonnes. The company had acquired Shiva Cement, which operates a clinker unit, in FY 2017.

Net profit

The company's net profit fell to Rs 62 crore in FY24 from Rs 104 crore on an annualized basis. Other income also declined from Rs 145.5 crore to Rs 86.5 crore during the period. However, operating revenue increased by 3.3 percent to Rs 6,028.1 crore and EBITDA also increased by 36.9 percent to Rs 932.9 crore during the period. Its margin increased by 3.80 percent to 15.5 percent. The company has a debt of Rs 5,835.76 crore.

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