Sajjan Jindal-promoted JSW Cement has a road map to double its cement capacity and also look for acquisitions, according to the company’s initial public offering (IPO) documents.
On Friday (August 16), JSW Cement filed its draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (Sebi). According to the DRHP, JSW Cement plans to increase grinding capacity to 40.85 million tonnes per annum (MTPA) from the current 20.60 MTPA and installed clinker capacity to 13.04 MTPA from current 6.44 MTPA.
In his interactions with the press last year, Parth Jindal, managing director for the company, had noted larger expansion plans of 60 MTPA in (then) five years’ time. The DRHP mentions the strategy is to reach an aggregate capacity of 60 MTPA, but details the plan only for 40 MTPA of grinding capacity.
An email query sent to JSW Cement on Monday with details mentioned in the story remained unanswered till the time of going to the press.
The board composition of JSW Cement, if retained post listing, will also be a detour from other JSW group listed entities. The DRHP lists Seshagiri Rao, a senior finance executive of the group, as the chairperson for JSW Cement. For all other listed group entities — JSW Energy, JSW Steel and JSW Infrastructure — promoter Sajjan Jindal holds the chair position.
In its offer documents, JSW Cement also said it “intends to continue to evaluate strategic acquisition, including by submitting bids for companies with cement plants undergoing the corporate insolvency resolution process under the Insolvency and Bankruptcy Code (IBC), 2016, based on their strategic fit with our expansion plans, and investment returns”. Jaiprakash Associates and Vadraj Cement are some of the cement assets in IBC at present.
Most of JSW group businesses are closely linked to each other, particularly to the steel business. JSW Cement, the company’s documents noted amongst the risk factors, is dependent on JSW Steel and its subsidiaries for 90.93 per cent supply of blast furnace slag as of FY24.
First Published: Aug 20 2024 | 7:08 PM IST
