The JSW Group intends to invest 18,000 crore to hike capacity of its cement business to 60 MTPA over the next five years, even as it is readying to raise about3,500-4,000 crore through an IPO. Further, the Group expects to emerge as one of the top cement players in the country with a 10% market share and its paints business to become profitable this year, Parth Jindal, managing director of JSW Cement and JSW Paints, tells FE’s Rajesh Kurup in an interview. Jindal, who is also the founder of JSW Sports and Inspire Institute of Sport, is also exploring the option to take Delhi Capitals IPL cricket team public. Excerpts:
What are the plans to increase JSW Cement’s capacity to 60 MTPA?
We will be investing 18,000 crore to grow our capacity to 60 million tonne over the next five years from the present 21 MTPA by the end of this calendar year. We will launch an initial public offering (IPO) for JSW Cement next year (2024) and hope to raise about3,500-4,000 crore by diluting 10-15% stake, of which 50% will be an offer for sale by the two PE investors – Apollo Global and Synergy Metals.
We will dilute the remaining 10% in the subsequent two years after the IPO to raise Rs 7,000-9,000 crore. The balance capex funding will be through a mix of internal accruals and debt.
Would the capacity addition plans be greenfield or there will be acquisitions too?
We will expand our total capacity to 35 MTPA through brownfield expansion across our seven manufacturing sites in India and for the balance 25 MTPA, we will put up integrated cement plants in Rajasthan, Madhya Pradesh and Karnataka. There are about 50-75 MT of cement assets available for sale and we will be looking at inorganic opportunities too. But right now, expansion through the organic route is much cheaper.
You are also setting up a clinker facility in the UAE. What is the status?
That clinker project is coming up in Fujairah, the UAE. It will be commissioned by December this year. We had invested $100 million in phase-I and will invest another $135 million in this 3 MTPA clinker facility.
Is the rise in cement demand led by the infrastructure and real estate sectors?
In the last fiscal, cement demand in India stood at 380 MT and it is expected to be about 430 MT this year led by the infrastructure and home segments. The Centre would spend close to $1 trillion on infrastructure development over the next 3-4 years, boosting the demand for cement. We are also seeing a return of real estate, but the main growth is happening from infrastructure such as national highways, railways, dedicated freight corridors and bullet trains, among others.
On the back of all that demand, we are expanding. We want to be among the top five cement players in the country, and garner a 10% market share.
The paints sector is hotting up. What are the growth plans for JSW Paints?
We are in the fourth year of operations now. This fiscal, we will cross revenues of 2,500 crore and become a profitable company. Our aim is to be among the top three players in the paints industry by 2026. We want to be a10,000-crore paints company in the next three years, and we are expanding our capacity from the present 210,000 kilolitres (KL) to 500,000 KL.
We are adding new brownfield capacities in Vasind and Vijayanagar, and also a new facility in Madhya Pradesh near Indore. This will take us to 500,000 KL to achieve Rs 10,000 crore turnover by FY27.
What are your initiatives on the sports front?
We plan to continue to invest in all sports. Last year, we bought the women’s premier league team of Delhi Capitals and Pretoria Capitals in the South African League. We continue to own Delhi Capitals, Bengaluru FC and Haryana Steelers (kabaddi team). On the business side of sports, we are exploring the option of taking Delhi Capitals public. We need clarity on this from the Board of Control for Cricket in India, and have to wait for some time till the women’s IPL matures a bit more.