JSW Cement reveals IPO plans to fund expansion

JSW Cement is planning to launch an initial public offering (IPO) in 2024 to raise INR40,000m (US$483.8m) to fund its ongoing expansion plans, reports Live Mint.

 “In 2024, we are planning to take this company public, for which we will be filing the DRHP (draft red herring prospectus) in the next six months. We will be timing the market listing after the national elections,” confirmed Parth Jindal, managing director, JSW Cement. 

According to the company, it hopes to raise INR35,000-40,000 through the IPO with the aim of diluting 10-15 per cent in round one. Over the following two years it intends to dilute the entire 25 per cent that it is obliged to do under the Securities Exchange Board of India guidelines. “It will give us enough ammunition to fulfil our organic ambitions,” adds Mr Jindal. 

The proceeds of the IPO will be used to fund the company’s expansion plans, increasing production capacity from 21Mta to 60Mta over the next five years. According to Live Mint, 20 per cent of the total capex required will come from the IPO. “The rest will come through internal accruals and then, we will fund it through debt. And, as and when required, we can always do a follow-on round in the public markets. We can raise a bond; we can do a QIP (qualified institutional placement). So, once we are public, we will have a lot more options at our disposal,” explained Mr Jindal.