Markets regulator Securities and Exchange Board of India (Sebi) has put on hold the proposed Rs 4,000-crore initial public offering (IPO) of JSW Cement.
While the regulator did not give any reasons, it listed JSW Cement under “draft offer document in relation to which issuance of observations kept in abeyance” in an update giving the processing status of various firms that have filed for a public issue.
JSW Cement, part of the JSW Group, filed its draft red herring prospectus (DRHP) on August 20. The company seeks to raise Rs 2,000 crore by selling new shares and an equal amount through the offer-for-sale (OFS) route.
The OFS will be by the two private equity investors – Apollo Global Management and Synergy Metals Investments Holding – and State Bank of India. In 2021, it had raised Rs 1,500 crore from the two PE firms.
The proceeds from the IPO are expected to be used towards part financing the cost (Rs 800 crore) of establishing a new integrated cement unit at Nagaur, Rajasthan, and repayment of borrowings (Rs 720 crore). The remainder will be allocated towards general corporate purposes.
The company has set itself a capacity expansion goal of 60 million tonne per annum (MTPA) for which it will require an investment of Rs 18,000 crore.
In the near term, the company plans to increase the total capacity to 30.6 MTPA by FY27, from 20.6 MTPA now.
The additional capacity will come from the Rajasthan plant, which was announced by JSW Cement in May this year, where it will invest Rs 3,000 crore. The company also plans to set up a 2.5 MTPA capacity unit in Punjab to expand its presence in the north, in addition to the Rajasthan facility.
JM Financial, Axis Capital, Citigroup Global Markets India, DAM Capital Advisors, Goldman Sachs (India) Securities, Jefferies India, Kotak Mahindra Capital Company and SBI Capital Markets are responsible for managing the company’s IPO process.