The Indian cement industry is set to witness a major development as JSW Cement, a key player in the sector and part of the diversified JSW Group, prepares to go public with INR 4,000 crore Initial Public Offering (IPO). The IPO recently received approval from SEBI and is poised to become one of the most significant listings in the cement sector since Nuvoco Vistas (NS:NUVO)' INR 5,000 crore IPO in 2021.
The INR 4,000 crore IPO will include a fresh issue of INR 2,000 crore and an offer-for-sale (OFS) worth INR 2,000 crore from existing shareholders. The funds raised will be allocated toward strategic growth initiatives, including INR 800 crore for establishing a new integrated cement facility in Nagaur, Rajasthan, and INR 720 crore for debt repayment. The remaining funds will address general corporate purposes.
As of March 2024, JSW Cement’s liabilities stand at INR 8,933.42 crore, underscoring the importance of this IPO for strengthening its financial footing. The company has exhibited impressive growth over the past decade. A CRISIL (NS:CRSL) report highlights that between FY2014 and FY2024, JSW Cement was India’s fastest-growing cement manufacturer in terms of installed grinding capacity and sales volume. Its FY2023 sales volume surged by 31.11%, far exceeding the industry average of 6.35%.
The IPO will allocate 50% of shares to Qualified Institutional Buyers (QIBs), 15% to Non-Institutional Investors (NIIs), and 35% to retail investors. Post-listing, shares will trade on BSE and NSE, ensuring accessibility for investors. Leading investment banks, including JM Financial (NS:JMSH), Axis Capital (NYSE:AXS), and Goldman Sachs (NYSE:GS), are managing the offering.
Despite its robust growth, JSW Cement faces notable risks. The company heavily relies on JSW Steel (NS:JSTL) for blast furnace slag—a critical raw material—and any supply disruptions could impact operations. Additionally, uninterrupted access to power and limestone mining rights remain essential for maintaining production levels.
JSW Cement’s IPO comes at a time when the cement sector is witnessing steady demand driven by infrastructure growth. However, the company’s substantial debt and dependency on external suppliers pose concerns. Investors considering this IPO are encouraged to evaluate its intrinsic value using tools like
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