JSW Cement IPO gets approval from SEBI: 11 things you need to know about the upcoming issue

JSW Cement IPO Share Price Today: The cement sector is buzzing with action. JSW Cement, a part of multinational JSW conglomerate and one of the leading cement companies in India, is set to launch its public offering. In the latest development, the company has received a green signal from the capital markets regulator SEBI to raise Rs 4,000 crore through an IPO. Further, this will also mark a significant competition in the listed cement sector as it follows Nuvoco Vistas Rs 5,000 crore IPO in August 2021.  

If you’re considering participating in the JSW Cement IPO, here is the 11 things you need to know about the upcoming issue.

JSW Cement IPO: What is the Size of the IPO?

A mainboard issue, the IPO will raise Rs 4,000 crore, which includes both a fresh issue of shares and an offer for sale (OFS). It will comprise of a fresh issue of Rs 2,000 crore and an offer-for-sale (OFS) of Rs 2,000 crore from existing investors.

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JSW Cement IPO: Key investors participating in the OFS

The OFS portion of the IPO involves key investors selling their stake in JSW Cement such as AP Asia Opportunistic Holdings, offering Rs 937.5 crore worth of shares, Synergy Metals Investments Holding with Rs 937.5 crore, and State Bank of India (SBI) contributing Rs 125 crore.

JSW Cement IPO: Market segmentation

The shares in the IPO will be divided among different types of investors such as 50% for Qualified Institutional Buyers (QIBs), 15% for Non-Institutional Investors (NIIs), and 35% for Retail Investors

JSW Cement IPO: Use of funds raised

The company plans to use the funds raised from the public issue for specific purposes such as expanding its capacity and reducing its debt. The cement-maker will use Rs 800 crore for setting up a new integrated cement facility in Nagaur, Rajasthan and Rs 720 crore will be allocated for debt repayment. Thereafter, the company will use the remaining funds for general corporate purposes.

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JSW Cement IPO: Debt situation

As of March 31, 2024, JSW Cement’s total liabilities stood at approximately Rs 8,933.42 crore, which includes both short-term and long-term financial obligations.

JSW Cement IPO: Timeline

As of the latest available update, the official date of the IPO opening by the company is not disclosed yet. As per reports, it is expected to open soon.

JSW Cement IPO: Listing details

Once the IPO process is completed, the shares will be listed on both the BSE and the NSE, giving investors easy access to buy and sell the stock on India’s leading exchanges.

JSW Cement IPO: Leading investment banks behind the IPO

Several leading investment banks are managing the JSW Cement IPO, including JM Financial, Axis Capital, Citigroup Global Markets India, Goldman Sachs (India) Securities, and Jefferies India.

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JSW Cement IPO: Growth in the past decade

According to a CRISIL Report, the company was the fastest-growing cement manufacturer in India between FY2014 and FY2024, based on installed grinding capacity and sales volume. In FY2023, the company’s sales volume grew by 31.11%, outperforming the industry’s average growth of 6.35%.

From FY2023 to FY2024, JSW Cement’s installed grinding capacity and sales volume grew at compound annual growth rates (CAGR) of 14.14% and 19.06%, respectively.

JSW Cement IPO: Risk factors

As the DRHP filed by the company, some of the risk factors noted by the company in the disclosure include:

“Our business depends on our ability to mine and procure sufficient limestone for our operations. Our inability to do so on reasonable terms, or at all, could have an adverse impact on our business, financial condition, and results of operations.”

“We are significantly dependent on JSW Steel Limited and its subsidiaries, our related parties, for the supply of blast furnace slag (90.93% of total blast furnace slag consumed in Fiscal 2024), which is a key additive raw material used for manufacturing green cementitious products such as ground granulated blast furnace slag and blended cement. The loss of one or more such suppliers could adversely affect our business, results of operations, financial condition, and cash flows.”

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“We depend on adequate and uninterrupted availability of power and fuel for our operations, and any failure to do so may have an adverse impact on our operations.”

JSW Cement IPO: Company overview

JSW Cement, founded in 2009, is a subsidiary of the multinational JSW Group, based in Mumbai. The company produces cement products and is part of the diversified JSW Group, which also operates in steel, energy, infrastructure, paints, and sports.