JSW Group’s JSW Cement files DRHP for Rs 4000 crore IPO

IPO proceeds to be used to retire debt as well as for establishing a new integrated unit

Mumbai, August 16, 2024: JSW Cement Limited, part of the multinational conglomerate JSW Group, has filed the DRHP for its initial public offering with SEBI on 16th August 2024. The Cement business of Sajjan Jindal-led JSW Group plans to raise upto Rs 4,000 crore through the IPO route.

JSW Group has diversified businesses across various sectors such as steel, energy, maritime, infrastructure, defence, business-to-business e-commerce, realty, paints, sports and venture capital.

The IPO, with a face value of ₹10 each, is a mix of fresh issue of shares up to Rs 2000 crore and an offer for sale (OFS) of up to Rs 2000 crore by Investor Selling Shareholders.

The offer for sale consists of up to Rs 937.50 crore by AP Asia Opportunistic Holdings Pte. Ltd., up to Rs 937.50 crore by Synergy Metals Investments Holding Limited, and up to Rs 125 crore by State Bank of India.

The company, in consultation with the book-running lead managers, may consider a further issue of equity shares through a preferential offer or any other method aggregating to Rs 400 crore as Pre-IPO placement. If such placement is completed, the fresh issue size will be reduced.

The company plans to deploy Rs 800 crore to part financing the cost of establishing a new integrated cement unit at Nagaur, Rajasthan; Rs 720 crore for prepayment or repayment, in full or in part, of all or a portion of certain outstanding borrowings availed by the Company; and general corporate purposes.

The offer is being made through the book-building process, wherein not more than 50% of the offer shall be available for allocation on a proportionate basis to qualified institutional buyers, not less than 15% of the offer shall be available for allocation to non-institutional investors, and not less than 35% of the offer shall be available for allocation to retail individual investors.

JSW Cement is the fastest-growing cement manufacturing company in India in terms of increased installed grinding capacity and sales volume from Fiscal 2014 to Fiscal 2024, according to a CRISIL Report. From Fiscal 2023 to Fiscal 2024, It was also one of the fastest growing cement manufacturing company in terms of sales volume within India among the top 10 cement manufacturers by installed capacity.

The Company achieved a 31.11% rise in sales volume in Fiscal 2023, excluding sales from JSW Cement FZC, significantly outpacing the industry average growth of 6.35%, according to the CRISIL Report.

During this period, JSW Cement’s installed grinding capacity and sales volume grew at compound annual growth rates (CAGR) of 14.14% and 19.06%, respectively, compared to the industry averages of 7.31% and 7.56%, as reported by CRISIL.

The company is currently pursuing greenfield and brownfield expansion projects across India, particularly in the northern and central regions, aiming to raise its Installed Grinding Capacity to 40.85 MMTPA and Installed Clinker Capacity to 13.04 MMTPA, establishing a comprehensive pan-India presence.

JSW Cement is the leading manufacturer of ground granulated blast furnace slag (GGBS) in India, an environmentally friendly product made entirely from blast furnace slag, a by-product of steel production. In Fiscal 2024, the company had a market share of 82.70% in GGBS sales, according to the CRISIL Report.

In 2021, two global private equity investors, AP Asia Opportunistic Holdings Pte. Ltd. (managed by affiliates of Apollo Global Management, Inc) and Synergy Capital, along with the State Bank of India, invested in the Company.

JSW Cement began its operations in 2009 in southern India with a single grinding unit in Vijayanagar, Karnataka. Since then, it has expanded its footprint across the southern, western, and eastern regions of India, as well as in the UAE.

The Company’s product portfolio includes blended cement (such as PSC and PCC), GGBS, ordinary Portland cement (OPC), clinker, and a variety of allied cementitious products, including ready-mix concrete (RMC), screened slag, construction chemicals, and waterproofing compounds.

As of March 31, 2024, JSW Cement operated seven plants in India, comprising one integrated unit, one clinker unit, and five grinding units across Andhra Pradesh (Nandyal plant), Karnataka (Vijayanagar plant), Tamil Nadu (Salem plant), Maharashtra (Dolvi plant), West Bengal (Salboni plant), and Odisha (Jajpur plant and the majority-owned Shiva Cement Limited clinker unit). Additionally, JSW Cement FZC operates a clinker unit in the UAE, supplying clinker to the Dolvi grinding unit in western India and to third-party customers.

JSW Cement has the lowest carbon dioxide emission intensity among its peers in the cement manufacturing industry both in India and globally, according to the CRISIL Report. To reduce its reliance on coal and petroleum coke as fuel sources, the company co-processes industrial waste as alternative fuels.

In Fiscal 2024, JSW Cement’s thermal substitution rate, which measures the percentage of total fuel consumption met by alternative fuels, stood at 6.89%. The company has also installed alternative fuel handling systems at its Nandyal plant, the Shiva Cement Limited clinker unit, and the JSW Cement FZC clinker unit to facilitate the use of alternative fuels. Additionally, JSW Cement utilizes green power, including energy from solar panels and waste heat recovery systems (WHRS), to meet some of its power needs, with plans to expand green power usage across all its plants.

As of March 31, 2024, the company had established a network of 5,043 dealers, 10,412 sub-dealers, 164 warehouses, and 6,268 direct customers.

JSW Cement’s revenue from operations increase by 3.28% to Rs 6028.10 crore in Fiscal 2024 from Rs 5836.72 crore, primarily due to an increase in the sales volumes of cement and GGBS, average retail selling prices of cement and GGBS and increase in government grants.

Between Fiscals 2025 and 2029, the demand for cement in India is anticipated to grow at a compound annual growth rate (CAGR) of 6.5% to 7.5%. Simultaneously, the Indian ready-mix concrete (RMC) industry is projected to expand at a CAGR of 10% to 12% from Fiscal 2024 to Fiscal 2029. This growth is expected to drive increased demand for blended cement, GGBS, OPC, clinker, and related cementitious products. Specifically, the demand for GGBS is forecasted to rise at a CAGR of 15.00% to 16.00% over the same period.

JM Financial Limited, Axis Capital Limited, Citigroup Global Markets India Private Limited, DAM Capital Advisors Limited, Goldman Sachs (India) Securities Private Limited, Jefferies India Private Limited, Kotak Mahindra Capital Company Limited, and SBI Capital Markets Limited are the book running lead managers and KFin Technologies Limited is the registrar to the offer. The equity shares are proposed to be listed on BSE and NSE.

DRHP Link:: https://www.axiscapital.co.in/wp-content/uploads/JSW-Cement-Ltd-Draft-Herring-Prospectus.pdf