JSW Cement, a subsidiary of the Sajjan Jindal-led JSW Group, is gearing up for its initial public offering (IPO) to raise approximately ₹6,500 crore. The IPO is expected to provide a partial exit for early private equity investors and fuel the company’s expansion plans. With a target to become one of the top five cement producers in India, JSW Cement aims to achieve a capacity of 60 million tonnes per annum within the next five years.
Sources reveal that JSW Cement has approached domestic and foreign investment banks, including SBI Capital, Kotak Mahindra Capital, JM Financial, DAM Capital, Jefferies, Citi, and Goldman Sachs, to advise the company on its proposed IPO. The IPO is expected to be the largest in the construction material industry since Nuvoco Vistas’ ₹5,000 crore IPO in August 2021. JSW Cement aims to utilise the IPO funds for expansion, debt reduction, and working capital.
JSW Cement currently has a capacity of 19 million tonnes per annum across its manufacturing units in Karnataka, Andhra Pradesh, West Bengal, Odisha, and Maharashtra. The company is close to completing a 2 million tonnes per annum expansion and has set an ambitious target of achieving a capacity of 60 million tonnes per annum in the next five years through brownfield and greenfield expansion. The soaring demand in the cement sector has prompted leading players like UltraTech Cement, Ambuja Cements, and ACC to consolidate their positions through acquisitions.
If JSW Cement’s listing plans materialise, it would be the largest IPO in the sector since Nuvoco Vistas’ ₹5,000 crore IPO in August 2021. The company’s IPO is expected to attract significant investor interest, given its growth potential and the positive market sentiment. JSW Cement’s listing comes after the successful IPO of JSW Infrastructure, marking the JSW Group’s first public offering in 13 years. The company aims to leverage the supportive market conditions and initiate the IPO process for a post-election listing.
RTM Watch’s Take
JSW Cement’s IPO preparation reflects the company’s strategic vision to capitalise on the growing demand in the cement sector and expand its market presence. The IPO is expected to provide the necessary funds for JSW Cement’s ambitious expansion plans and strengthen its position in the industry. With the backing of reputed investment banks and the positive market sentiment, JSW Cement’s IPO is likely to generate significant investor interest. As the company progresses towards its IPO, it will be interesting to observe how it navigates the competitive landscape and executes its growth strategy.
