JSW Cement, a leading company within the diversified JSW Group founded by Sajjan Jindal, has obtained approval from SEBI to raise Rs 4,000 crore through an initial public offering (IPO), as confirmed by the market regulator on Monday. The IPO will feature a new equity share issuance valued at Rs 2,000 crore, in addition to an Offer-for-Sale (OFS) of Rs 2,000 crore from its investor shareholders, according to the Draft Red Herring Prospectus (DRHP) submitted in August of last year.
Key Details of the IPO
The Offer-for-Sale comprises the following:
- AP Asia Opportunistic Holdings Pte Ltd: Selling shares valued at Rs 937.5 crore
- Synergy Metals Investments Holding Ltd: Also selling shares worth Rs 937.5 crore
- State Bank of India (SBI): Divesting shares estimated at Rs 125 crore
JSW Cement submitted its preliminary IPO documents to SEBI in August 2023. In September, the regulator momentarily suspended the company’s IPO proposal. Nonetheless, on January 6, a final observation was granted, allowing the company to proceed with the public offering.
Allocation of Proceeds
The proceeds from the IPO will be allocated as follows:
- Rs 800 crore: Part-financing of a new integrated cement unit in Nagaur, Rajasthan
- Rs 720 crore: For the prepayment or repayment of existing debts
- Remaining funds: Assigned for general corporate purposes
As of March 31, 2024, JSW Cement’s total liabilities stood at Rs 8,933.42 crore.
Financial Performance
Regarding financial results, JSW Cement reported the following for FY24:
- Revenue from operations: Rs 6,028.10 crore, compared to Rs 5,836.72 crore in FY23 and Rs 4,668.57 crore in FY22
- Profit: Rs 62 crore for FY24, down from Rs 104 crore in FY23
As of March 31, 2024, the company has an installed grinding capacity of 20.60 MTPA (million tonnes per annum) and aims to increase its total capacity to 60 MTPA.
Operational Facilities
JSW Cement operates several manufacturing facilities in the following locations:
- Vijayanagar, Karnataka
- Nandyal, Andhra Pradesh
- Salboni, West Bengal
- Jajpur, Odisha
- Dolvi, Maharashtra
Furthermore, through its subsidiary, Shiva Cement, the company manages a clinker unit located in Odisha.
IPO Management Team
The management of the IPO process is being handled by a consortium of firms that includes:
- JM Financial Ltd
- Axis Capital Ltd
- Citigroup Global Markets India Pvt Ltd
- DAM Capital Advisors Ltd
- Goldman Sachs (India) Securities Pvt Ltd
- Jefferies India Pvt Ltd
- Kotak Mahindra Capital Company Ltd
- SBI Capital Markets Ltd