JSW Cement, part of the Rs 2-trillion JSW Group, is expected to file draft papers for its initial public offering (IPO) with the Securities and Exchange Board of India (Sebi) soon to raise up to Rs 4,000 crore, said industry sources.
Sources say that the IPO will likely include new shares worth Rs 2,000 crore and an offer for sale of an equal amount.
JSW Cement refused to comment to the queries sent by FE.
The firm may dilute 10-15% stake, of which 50% will be an offer for sale by the two PE investors – Apollo Global Management and Synergy Metals Investments Holding. In 2021, it had raised Rs 1,500 crore from these two PE firms.
The proceeds from the fundraise are expected to be used towards expanding the company’s capacity from the current 21 million tonne per annum (MTPA) to 60 MTPA over the next 5 years and expand presence in the northern market.
The total investment required to reach the 60 MTPA capacity is estimated at Rs 18,000 crore. The company’s current cement capacity stands at 20.6 MTPA – south (11 MTPA), east (5.1 MTPA) and west (4.5 MTPA).
In the near term, the company plans to increase total capacity to 30.6 MTPA by FY27, according to a report by Crisil.
The additional capacity will be coming from the Rajasthan plant, a new unit announced by JSW Cement in May this year. The company said that it will invest Rs 3,000 crore towards the new cement facility in Nagaur, which includes a clinkerisation unit of up to 3.30 MTPA, a grinding unit of up to 2.50 MTPA and an 18-megawatt power plant. This investment will allow JSW Cement to service markets like Punjab, Haryana and Delhi NCR.
Crisil added that the company also plans to set up a 2.5 MTPA capacity unit in Punjab, further accelerating its presence in the north. Further, as part of its capacity expansion plans, the company is planning a 4 MTPA brownfield addition in its Vijayanagar unit and a 1 MTPA addition in subsidiary Shiva Cement, which supplies clinker – a key component in cement manufacturing.
Analysts estimate that these expansion plans will require a capex of Rs 5,500 crore over FY25-FY27, which will need to be funded through a mix of equity infusion, debt and internal accruals.
Media reports also suggest that JSW Cement has joined the list of suitors – Aditya Birla and Adani – to acquire Delhi-based Orient Cements, which has a capacity of 8.5 MTPA.
