After the successful venture into automobile sector, Sajjan Jindal-led JSW Group is preparing the ground for listing its cement business on stock exchanges to raise about ₹6,500 crore.
Sources said JSW Cement has reached out to domestic and foreign investment banks including SBI Capital, Kotak Mahindra Capital, JM Financial, DAM Capital, Jefferies, Citi and Goldman Sachs for advising the company on the proposed initial public offering.
The proposed IPO will also provide a partial exit for early private equity investors such as Apollo Global Management and Synergy Metals Investments Holding, the source added.
The company declined to comment on the development when businessline reached out.
In a first, after 13 years, the group recently listed JSW Infrastructure to raise ₹2,800 crore in September. The company’s shares, which was issued at ₹119 a piece, is currently trading at ₹215.
With the intense competition and consolidation in the industry, JSW Cement plans to utilise the IPO funds for expansion, debt reduction and working capital, sources said.
Soaring Demand
JSW Cement’s initial public offer will be the biggest in the construction material industry after Nirma group backed Nuvoco Vistas raised ₹5,000 crore in August, 2021.
Driven by JSW scion, Parth Jindal, JSW Cement has a capacity of 19 million tonnes per annum (mtpa) across its manufacturing units at Vijayanagar in Karnataka, Nandyal in Andhra Pradesh, Salboni in West Bengal, Jajpur in Odisha and Dolvi in Maharashtra.
The company, which is close to completing 2 mtpa of expansion, has an ambitious target to achieve 60 mtpa capacity in next 5 years through brownfield and greenfield expansion.
The soaring demand in the cement sector has forced leading players — UltraTech Cement and Adani Group companies Ambuja Cements and ACC — to consolidate their position through acquisitions.
UltraTech Cement, an Aditya Birla Group company, had made two acquisitions last November by buying out BK Birla Group company Kesoram Industries’ 10.75 mt cement capacity for ₹7,700 crore in all share deal and cement grinding assets of Burnpur Cement in Jharkhand for ₹170 crore.
Ambuja Cements recently acquired Sanghi Cements for ₹5,185 crore to take its capacity to 31 mtpa with six integrated cement manufacturing plants and eight cement grinding units across the country. Both Ambuja Cements and ACC plan to double their capacity 137 mtpa in next five years.