JSW Cement has announced plans to merge its listed subsidiary, Shiva Cement, into the parent company as part of efforts to streamline operations, strengthen vertical integration and improve financial efficiency.

The boards of both companies have approved the proposed merger, which remains subject to regulatory, shareholder and creditor approvals. These include clearances from the stock exchanges, Securities and Exchange Board of India, National Company Law Tribunal and Odisha Industrial Infrastructure Development Corporation. The transaction is expected to be completed within 12-14 months.

Under the proposed share exchange arrangement, eligible Shiva Cement shareholders will receive five JSW Cement equity shares, each with a face value of INR10 (US$0.01), for every 41 Shiva Cement shares held, each with a face value of INR2. Shares held by JSW Cement itself will be excluded from the exchange.

The merger is expected to combine the companies' financial, managerial, technical, distribution and marketing resources, while eliminating administrative duplication and reducing compliance costs. JSW Cement also anticipates greater financial flexibility, lower borrowing costs and the removal of inter-company guarantees.

Furthermore, the consolidation will strengthen JSW Cement's backward integration by bringing Shiva Cement's clinker manufacturing operations directly into the parent company's structure. This is expected to reduce reliance on externally sourced clinker and improve supply-chain efficiency.

Advertisement

Shiva Cement's public shareholders will gain direct ownership in JSW Cement, benefiting from its larger institutional investor base and greater share liquidity.

JSW Cement began acquiring a controlling interest in Shiva Cement in January 2017. The subsidiary operates a 1Mta integrated plant in Kutra, Odisha, close to the borders with Chhattisgarh and Jharkhand. In FY25-26, Shiva Cement also commissioned a 1Mta cement grinding unit at Sambalpur through a commercial arrangement with Bhushan Power and Steel.

JSW Cement currently has a cement capacity of 25.10Mta. Its Indian manufacturing network comprises 10 plants, including four integrated cement plants and six grinding units.

The proposed merger will consolidate the two companies' operations and financial reporting under a single corporate structure.