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JSW Cement, a subsidiary of the Sajjan Jindal-led JSW Group, has taken a significant step towards its public market debut by filing a draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) for an initial public offering (IPO). The IPO, aiming to raise Rs 4,000 crore, will consist of a fresh issuance of equity shares worth Rs 2,000 crore and an offer for sale (OFS) of Rs 2,000 crore by existing investors.
The OFS will see AP Asia Opportunistic Holdings Pte Ltd and Synergy Metals Investments Holding Ltd offloading shares worth Rs 937.5 crore each, while State Bank of India (SBI) will divest shares valued at Rs 125 crore. The proceeds from the fresh issue will be utilized for various purposes, including financing the establishment of a new integrated cement unit in Nagaur, Rajasthan (Rs 800 crore), prepayment or repayment of outstanding borrowings (Rs 720 crore), and general corporate purposes (up to 25% of the gross proceeds).
JSW Cement currently operates five manufacturing units across India, located in Vijayanagar (Karnataka), Nandyal (Andhra Pradesh), Salboni (West Bengal), Jajpur (Odisha), and Dolvi (Maharashtra). The company also operates a clinker unit in Odisha through its subsidiary, Shiva Cement. With an installed grinding capacity of 20.60 million tonnes per annum (MTPA), JSW Cement has ambitious plans to expand its capacity to 60 MTPA. This expansion strategy aims to capitalize on the growing demand for cement in India, driven by infrastructure development and real estate growth.
The Indian cement sector is experiencing consolidation, with the top five players – UltraTech Cement, Shree Cement, Ambuja Cement (including ACC Ltd), Dalmia Bharath, and Nuvoco Vistas – holding approximately 54% of the market share. UltraTech and Adani Group’s Ambuja Cement are aggressively expanding their capacities through acquisitions and brownfield expansions. UltraTech aims to exceed 200 MTPA by FY27, while Adani Group, which acquired Ambuja Cement in 2022, aims for a 140 MTPA capacity by FY28. Adani Group’s recent acquisition of Penna Cement, adding 93 MTPA to its portfolio, has solidified its position as the second-largest cement maker in India.
Source: JSW Cement IPO DRHP: Company Files Draft With Sebi, Check Issue Size, OFS Details