JSW Cement IPO: Rival Of Ambuja, Ultratech Coming Soon, 10 Key Points To Know! Is This The Biggest Cement IPO?

JSW Group is getting one step closer to launching its cement company's Rs 4,000 crore IPO as the market regulator Sebi gives the green signal. In the cement industry, on BSE and NSE, Adani Group-backed Ambuja Cements and ACC along with Ultratech Cement hold dominance, JSW Cement will be rivalling them once listed. The upcoming IPO is likely to be the biggest of JSW Group.

JSW Cement IPO will list after JSW Infrastructure IPO which was the last from the group. JSW Infrastructure IPO was launched in September 2023, with Rs 2,800 crore issue size, following its listing in October of that year.

Notably, JSW Cement's IPO will also be the largest in four years since Nuvoco Vistas's Rs 5,000 crore IPO that was launched in August 2021. JSW Cement IPO is going public at a time when both the Birla Group and the Adani Group are sweeping major mergers and acquisitions in regions of India for competition.

As per the latest update, market regular SEBI has approved JSW Cement's Rs 1PO which will be a mixture of both fresh issue and offer for sale. Here are 10 key points to know about JSW Cement IPO:

JSW Cement IPO Key Highlights:

1. Size: The IPO size is of Rs 4,000 crore which includes fresh issue worth Rs 2,000 crore and offer for sale up to Rs 2,000 crore. The face value of equity shares that will be offered, is at Rs 10 each.

2. OFS: The selling shareholders in the offer for sale (OFS) are AP Asia Opportunistic Holdings, Synergy Metals Investments
Holding, and State Bank of India.

3. The IPO size will be segregated into 60% of the total to qualified institutional buyers (QIBs), while 15% of the size to be reserved for non-institutional investors (NIIs) and rest 35% will be allotted to retail individual investors.

4. Companies like JM Financial, Axis Capital, Citigroup Global Markets, DAM Capital Advisors, Goldman Sachs (India), Jefferies India, Kotak Mahindra Capital and SBI Capital Markets are acting like book running lead managers of the IPO.

5. JSW Cement will utilise the proceeds from the fresh issue for part financing the cost of establishing a new integrated cement unit at Nagaur, Rajasthan, prepayment or repayment, in in full or in part, of all or a portion of certain outstanding
borrowings, and general corporate purposes.

6. The IPO opening, closing, anchor investors bidding, allotment and listing dates will be announced soon. Further, the price band of the IPO will also be fixed in due course.

7. The grey market premium of the IPO is currently not available.

8. JSW Cement is the fastest growing cement manufacturing company in India in terms of increase in installed grinding capacity and sales volume from Fiscal 2014 to Fiscal 2024 (among the top 10 cement manufacturing companies in terms of installed capacity), according to the CRISIL Report. Over this period, our installed grinding capacity and sales volume grew at a compound annual growth rate ("CAGR") of 14.14% and 19.06% respectively, as compared to the industry average CAGR of 7.31% and 7.56% respectively according to the CRISIL Report.

9. As per brokerage Zerodha, here are the strengths of the IPO: Fastest-growing cement manufacturer among top 10 by capacity and sales growth; Market leader in GGBS with 82.7% share in FY24; Strong limestone reserves of 1,098.88 MMT; and Strategically located plants for cost efficiency.

10. The broker Zerodha has also highlighted the risks of JSW Cement IPO. These are--- Dependence on steel by-products like slag; Regulatory and environmental compliance risks; Expansion delays may hurt financials; and Geographic and customer concentration risks.