JSW Cement, whose Rs 3,600-crore IPO has opened for public subscription on Thursday, plans to triple manufacturing capacity to 60 million tonnes per annum in the coming years, and the USD 23-billion JSW group firm may tap capital markets to fund its growth, said Managing Director Parth Jindal on Thursday.
JSW Cement plans to grow its capacity organically. However, it may keep looking for acquisition opportunities.
The initial public offering (IPO) of JSW Cement Ltd received 29 per cent subscription on the first day of bidding on Thursday. The issue will conclude on August 11.
The company, which has put a price band of Rs 139-Rs 147 apiece for its IPO, expects to become among top-five players, helped by expansion after listing.
"We had reached a critical size of 20 million tonnes, which put us in the top ten in the Indian cement industry with a very clear roadmap to come into the top five, so we felt that this is the right time to tap the capital market and go for the IPO," said Jindal.
The company, which currently has the capacity for 20 MTPA (million tonnes per annum), has sufficient "mines, assets and land" to get 60 MTPA "as soon as possible", he said at a media round-table here.
When asked about the funding, Jindal said: "In terms of stake sale, at some point in time we would tap the capital markets either through a QIP or through a follow-on offering if we require funds to expand faster.
As of now, JSW Cement's internal accruals will be "sufficient to get to 42 MTPA" and even for 60 MTPA, said Jindal.
"... but if required, we can always do a QIP and dilute some stake in order to raise the funds. We are also keeping that window open, if any good acquisition comes up, then again we could dilute some stake and look for the acquisition of any asset," said Jindal.
Jindal expects the Indian cement industry to grow 6-7 per cent in the current fiscal, helped by factors such as the government's increased spending on infrastructure.
The company said the June quarter of FY26 was impacted due to unseasonal rains, early arrival of monsoon and geopolitical disturbances.
"I think Q2 has been very positive so far because monsoons came a little bit early in Q1," he said, adding, "the industry grew at about 4 per cent pan-India in Q1, I expect Q2 to be better, and I think the target of being 6.5 per cent to 7 per cent for the year is ... definitely we are on track for that as an industry."
When asked about margins in the cement industry, Jindal said the company is working on it by reducing the logistics costs.
"We are fortunate to have access to the rail and port infrastructure of the JSW group. Hence, our logistics cost is materially lower than the competition," he said.
Besides, the company has now started deploying electric trucks as well as LNG trucks on some of our routes.
About sales realisation of the industry, which was under pressure from last two years due to intense competition and consolidation happening in the cement industry, Jindal said: "In terms of realisation, the lows of FY25 are behind us, cement prices have recovered to a great extent, and you could see a much improved performance in Q1 by all the leading players."
About the consolidation happening in the cement industry, Jindal said JSW is also "constantly evaluating all acquisition opportunities. We are not against acquiring".
However, he also added the price of acquisitions has been set at a very high level. Because of the transactions that have taken place over the last two years, building capacity organically for JSW is much cheaper and more value-accretive than acquiring.
JSW Cement, had on Wednesday mobilised Rs 1,080 crore from anchor investors.
This anchor portion witnessed participation from domestic and foreign institutional investors including Nomura, Government of Singapore, Abu Dhabi Investment Authority, Morgan Stanley Investment Fund, Goldman Sachs (Singapore) Pte and Kuwait Investment Authority, according to a circular uploaded on BSE's website.
Also, SBI Mutual Fund (MF), Nippon India MF, Tata MF, Aditya Birla Sun Life MF, Motilal Oswal MF and SBI Life Insurance Company are among investors.
As per the circular, JSW Cement has allotted 7,34,69,386 equity shares to 52 funds at Rs 147 apiece. This aggregates the transaction size to Rs 1,080 crore.
The company has set a price band of Rs 139-147 per share, valuing the 17-year-old company at Rs 20,000 crore at the upper end of the price band.
The IPO includes a fresh issue of Rs 1,600 crore of shares and Rs 2,000 crore of shares to be sold by current shareholders through Offer for Sale.
As part of the OFS, private equity giant Apollo Management, through its affiliate AP Asia Opportunistic Holdings Pte Ltd, as well as Synergy Metals Investments Holding Ltd and State Bank of India (SBI) will offload shares.
JSW Cement plans to grow its capacity organically. However, it may keep looking for acquisition opportunities.
The initial public offering (IPO) of JSW Cement Ltd received 29 per cent subscription on the first day of bidding on Thursday. The issue will conclude on August 11.
The company, which has put a price band of Rs 139-Rs 147 apiece for its IPO, expects to become among top-five players, helped by expansion after listing.
"We had reached a critical size of 20 million tonnes, which put us in the top ten in the Indian cement industry with a very clear roadmap to come into the top five, so we felt that this is the right time to tap the capital market and go for the IPO," said Jindal.
The company, which currently has the capacity for 20 MTPA (million tonnes per annum), has sufficient "mines, assets and land" to get 60 MTPA "as soon as possible", he said at a media round-table here.
When asked about the funding, Jindal said: "In terms of stake sale, at some point in time we would tap the capital markets either through a QIP or through a follow-on offering if we require funds to expand faster.
As of now, JSW Cement's internal accruals will be "sufficient to get to 42 MTPA" and even for 60 MTPA, said Jindal.
"... but if required, we can always do a QIP and dilute some stake in order to raise the funds. We are also keeping that window open, if any good acquisition comes up, then again we could dilute some stake and look for the acquisition of any asset," said Jindal.
Jindal expects the Indian cement industry to grow 6-7 per cent in the current fiscal, helped by factors such as the government's increased spending on infrastructure.
The company said the June quarter of FY26 was impacted due to unseasonal rains, early arrival of monsoon and geopolitical disturbances.
"I think Q2 has been very positive so far because monsoons came a little bit early in Q1," he said, adding, "the industry grew at about 4 per cent pan-India in Q1, I expect Q2 to be better, and I think the target of being 6.5 per cent to 7 per cent for the year is ... definitely we are on track for that as an industry."
When asked about margins in the cement industry, Jindal said the company is working on it by reducing the logistics costs.
"We are fortunate to have access to the rail and port infrastructure of the JSW group. Hence, our logistics cost is materially lower than the competition," he said.
Besides, the company has now started deploying electric trucks as well as LNG trucks on some of our routes.
About sales realisation of the industry, which was under pressure from last two years due to intense competition and consolidation happening in the cement industry, Jindal said: "In terms of realisation, the lows of FY25 are behind us, cement prices have recovered to a great extent, and you could see a much improved performance in Q1 by all the leading players."
About the consolidation happening in the cement industry, Jindal said JSW is also "constantly evaluating all acquisition opportunities. We are not against acquiring".
However, he also added the price of acquisitions has been set at a very high level. Because of the transactions that have taken place over the last two years, building capacity organically for JSW is much cheaper and more value-accretive than acquiring.
JSW Cement, had on Wednesday mobilised Rs 1,080 crore from anchor investors.
This anchor portion witnessed participation from domestic and foreign institutional investors including Nomura, Government of Singapore, Abu Dhabi Investment Authority, Morgan Stanley Investment Fund, Goldman Sachs (Singapore) Pte and Kuwait Investment Authority, according to a circular uploaded on BSE's website.
Also, SBI Mutual Fund (MF), Nippon India MF, Tata MF, Aditya Birla Sun Life MF, Motilal Oswal MF and SBI Life Insurance Company are among investors.
As per the circular, JSW Cement has allotted 7,34,69,386 equity shares to 52 funds at Rs 147 apiece. This aggregates the transaction size to Rs 1,080 crore.
The company has set a price band of Rs 139-147 per share, valuing the 17-year-old company at Rs 20,000 crore at the upper end of the price band.
The IPO includes a fresh issue of Rs 1,600 crore of shares and Rs 2,000 crore of shares to be sold by current shareholders through Offer for Sale.
As part of the OFS, private equity giant Apollo Management, through its affiliate AP Asia Opportunistic Holdings Pte Ltd, as well as Synergy Metals Investments Holding Ltd and State Bank of India (SBI) will offload shares.
