JSW Cement, a group company of multinational conglomerate, JSW group was established in 2009. JSW cement is a cement manufacturing company that operates seven plants across the country. The company's strength is attributed to its brand, marketing initiatives, strong management and access to other JSW Group companies. Companies’ product portfolio includes blended cement, GGBS, ordinary portland cement, clinker, and allied cementitious products. As of FY24, they had an installed grinding capacity of 20.60 MMTPA and an installed clinker capacity of 6.44 MMTPA. They are currently undertaking expansion plans to increase their Capacity to 40.85 MMTPA and 13.04 MMTPA, creating a pan-India footprint. The company has the lowest carbon dioxide emission intensity among its peer cement manufacturing companies in India and globally, with emissions of 266 kg per tonne in FY24, FY23 and FY22.
The Main Objectives to Launch the JSW Cement IPO
The JSW Cement IPO issue has both fresh issue and offer for sale
- Offer for sale (OFS) by JSW cement promoters consists of up to [●] equity shares aggregating up to ₹ 20, 000 million. Nothing from those proceeds of OFS will be allotted to company.
- JSW Cement issue has fresh issue aggregating up to ₹ 20, 000 million. As per document; Rs. 800 crores will be used for setting up new cement unit; Rs. 720 crores will be used for repayment of loan and rest for general corporate purposes.
| Particulars | Estimated Amount |
| (₹ in millions) | |
| Part financing the cost of establishing a new integrated
cement unit at Nagaur, Rajasthan |
Rs. 8, 000 |
| Prepayment or repayment, in full or in part, of all or a portion
of certain outstanding borrowings availed by our Company |
Rs. 7, 200 |
| General Corporate Purposes | [●] |
| Total | [●] |
IPO Details of JSW Cement:
| IPO Open Date | N.A. |
| IPO Close Date | N.A. |
| Basis of Allotment | N.A. |
| Listing Date | N.A. |
| Face Value | ₹10 per share |
| Price | N.A. |
| Lot Size | N.A. |
| Total Issue Size | Up to [●] Equity Shares |
| Aggregating up to ₹ 40,000 million | |
| Fresh Issue | Up to [●] Equity Shares |
| Aggregating up to ₹ 20,000 million | |
| Offer For Sale | Up to [●] Equity Shares |
| Aggregating up to ₹ 20,000 million | |
| Issue Type | Book Built Issue IPO |
| Listing At | BSE & NSE |
| QIB Shares Offered | Not more than 50% of the Net Issue |
| Retail Shares Offered | Not less than 35% of the Net Issue |
| NII (HNI) Shares Offered | Not less than 15% of the Net Issue |
JSW Cement IPO Issue Price & Size
The issue price of JSW Cement hasn’t been released yet. Upon releasing the dates, the investors can bid between these price ranges. The company has an OFS of up to [●] equity shares consisting of Rs. 2000 crores and fresh issue of Rs. 2000 crores.
Launch Date of JSW Cement IPO
The IPO of JSW Cement is launching on (Opening Date XXXX), hence the opening date for bidding is (Open Date) and the IPO is closing on (Closing Date). Investors can bid in this IPO between these days during the primary market hours.
JSW Cement Financial Statements
| Particulars | FY24 | FY23 | FY22 |
| Income | |||
| Revenue from operations | 60281.03 | 58367.24 | 46685.7 |
| Other income | 864.93 | 1454.85 | 1949.07 |
| Total Income | 61145.96 | 59822.09 | 49634.77 |
| Expenses | |||
| Cost of raw material consumed | 13089.38 | 11243.6 | 10670.51 |
| Purchases of stock in trade | 226.95 | 4499.98 | 1533.13 |
| Changes in inventories of finished goods,
work- in-progress and stock-in-trade |
-137.95 | -73.91 | -441.87 |
| Employee benefits expense | 2993.68 | 2946.28 | 1446.34 |
| Finance costs | 4347.05 | 3102.3 | 3146 |
| Depreciation and amortisation expense | 2782.76 | 3732.03 | 2384.72 |
| Power and fuel | 9903.3 | 10323.52 | 7591.38 |
| Freight and handling expenses | 14371.04 | 14146.74 | 11071.88 |
| Fair value loss arising from financial
instruments designated as FVTPL (net) |
1413.4 | 1353.62 | 7.7 |
| Expected credit loss on incentives under
government schemes (refer note 3B(iv)) |
547.76 | ||
| Other expenses | 8602.31 | 7151.59 | 6318.77 |
| Less: Captive consumption of cement | -57.58 | -38.98 | -73.67 |
| Total Expenses | 58082.10 | 58386.7 | 44654.89 |
| Restated profit for the year | 620.13 | 1040.38 | 2326.49 |
| Particulars | Unit | Fy24 | FY23 | FY22 |
| Operating KPIs | ||||
| Cement Saleable Production | MMT | 7.05 | 5.76 | 5.69 |
| GGBS Saleable Production | MMT | 5.11 | 3..85 | 3.13 |
| Total Cementitious Saleable Production (cement +GGBS) | MMT | 12.15 | 9.61 | 8.82 |
| Clinker Production ^ | MMT | 4.34 | 2.67 | 2.99 |
| Cement Volume Sold | MMT | 6.94 | 5.7 | 5.58 |
| GGBS Volume Sold | MMT | 5.08 | 3.85 | 3.13 |
| Clinker Volume Sold | MMT | 0.5 | 0.94 | 0.99 |
| Total Volume Sold | MMT | 12.53 | 10.5 | 9.69 |
| Ready mix concrete Sales volume | Million Cu. M | 0.37 | 0.35 | 0.26 |
| Percentage of Cement Volume Sold through Trade Channel | % | 57.53% | 64.39% | 65.13% |
| Installed Grinding Capacity | “MMTPA | 20.6 | 16.3 | 14.55 |
| Installed Clinker Capacity^ | MMTPA | 6.44 | 5.12 | 3.3 |
| Grinding Capacity Utilization | % | 67.50% | 60.37% | 60.51% |
| Clinker Capacity Utilization # | % | 84.81% | 78.78% | 90.73% |
| Clinker To Cement Ratio | % | 46.60% | 42.88% | 47.49% |
| Green power consumed as percentage of total power consumption | % | 15.01% | 3.00% | 3.16% |
| Financial KPIs | ||||
| Revenue from operations | ₹ million | 60281.03 | 58367.24 | 46685.7 |
| Cement Realization per Tonne | ₹ | 4909.81 | 5084.4 | 4923.28 |
| GGBS Realization per Tonne | ₹ | 3760.61 | 3640.79 | 3239.09 |
| EBITDA (INR Million) | ₹ million | 10356.56 | 8269.65 | 9510.6 |
| EBITDA per Tonne | ₹ | 826.8 | 787.67 | 981.03 |
| EBITDA Margin | % | 16.94% | 13.82% | 19.56% |
| Operating EBITDA | ₹ million | 10989.33 | 8158.1 | 7561.53 |
| Operating EBITDA per Tonne | ₹ | 877.31 | 777.05 | 779.98 |
| Operating EBITDA Margin | % | 18.23% | 13.98% | 16.20% |
| PAT | ₹ million | 620.13 | 1040.38 | 2326.49 |
| Pat margin | % | 1.01% | 1.74% | 4.78% |
| Adjusted PAT | ₹ million | 1991.53 | 2383.68 | 1084.39 |
| Adjusted PAT margin | % | 3.26% | 3.98% | 2.23% |
| Net Debt (excluding CCPS) to Operating EBITDA Ratio | No. of Times | 3.43 | 4.6 | 3.43 |
| Net Debt (excluding CCPS) to Total Equity plus CCPS | No. of Times | 0.91 | 0.98 | 0.72 |
| Operating Return on Capital Employed (RoCE | % | 11.08% | 6.46% | 8.57% |
| Return on Equity (RoE) | % | 2.60% | 4.64% | 11.02% |
| Adjusted Return on Equity (Adjusted RoE) | % | 4.82% | 6.19% | 3.02% |
| Basic EPS | ₹ | 0.91 | 1.392 | 2.48 |
| Net Debt (excluding CCPS) | ₹ million | 37725.24 | 37563.88 | 25913.35 |
| Total Equity | ₹ million | 23854.82 | 22407.43 | 21120.26 |
| Net Asset value per share | ₹ | 24.99 | 23.24 | 21.6 |
| Raw Material per Tonne | ₹ | 1047.48 | 1488.8 | 1205.64 |
| Power & Fuel per Tonne | ₹ | 790.61 | 983.3 | 783.06 |
| Freight Cost per Tonne | ₹ | 1147.29 | 1347.46 | 1142.08 |
JSW Cement Promoters & Shareholding
There are 5 promoters of the company; 3 individual and 2 corporate entities. Names of the prompter are mentioned in table below.
| Name of the Promoter | No. of Eq. Share on fully diluted basis (assuming conversion of CCPS) | % of the pre-Offer Eq. share capital on a fully diluted basis |
| Adarsh Advisory Services Private Limited | 88,25,80,780 | 69.81 |
| Sajjan Jindal Family Trust | - | - |
| Sajjan Jindal | 3,00,000 | 0.03 |
| Parth Jindal | 36,00,000 | 0.35 |
| Sangita Jindal | 3,00,000 | 0.03 |
| Other Shareholders | ||
| AP Asia Opportunistic Holdings Pte. Ltd. | 11,50,44,844 | 9.1 |
| Synergy Metals Investments Holding Limited** | 11,50,44,844 | 9.1 |
| Siddeshwari Tradex Private Limited | 4,66,42,340 | 3.69 |
| JSW Cement Employees ESOP Trust | 3,25,06,692 | 2.57 |
| Virtuous Tradecorp Private Limited | 2,65,90,226 | 2.1 |
| JSL Limited | 2,00,52,114 | 1.59 |
| State Bank of India** | 1,53,39,312 | 1.21 |
Should You Subscribe to JSW Cement IPO or Not
While investing or subscribing to any IPO, consider the investment rationales related to the company. Hence, here you can find out the strength of the company that will be its growth factors. And also check the risk factors that can affect the growth and operational efficiency of the company.
Competitive Strengths of JSW Cement:
Fastest growing cement manufacturer
Established in 2009, the company has become the fastest growing cement manufacturer in India. The company has been increasing installed grinding capacity at speed of CAGR of 5.49 MMTPA and sales volume from FY14 to FY24. As of filing the prospectus, the company has seven strategic plants across India and one joint venture clinker unit in the UAE.
Largest manufacturer of GGBS in India
JSW cement is India's largest GGBS manufacturer, based on blast furnace slag and has seen a significant increase in volume sales. The demand for GGBS in India is expected to grow at a CAGR of 15%-16% to reach 12.0 MMT-13.0 MMT in Fiscal 2029. GGBS is used in various infrastructure projects, and the company is also researching new applications. GGBS is a popular replacement for OPC and fly ash in concrete manufacturing, offering various advantages like reduced thermal cracks, higher compressive strength, and improved durability. The company is well-positioned to tap into this growing demand due to its large, reliable supply of blast furnace slag.
Strategically located plant
The company operations across India's and their plant and strategically located near sources of raw material and consumption markets. Their clinker and integrated units are located near limestone mines, enabling them to sourcing of raw materials in cost-effective ways. Their plants are strategically located near key consumption markets, allowing us to serve customer demands.
Lowest CO2 emission among peers
JSW Group has obtained Green-Pro certifications and the Green Rating for Integrated Habitat Assessment certification for all their products. JSW Group's business model emphasizes the circular economy approach, utilizing industrial by-products and using waste derived resources as raw materials. The company primarily manufactures green cementitious products, such as blended cement and GGBS, which constituted 80.68%, 82.49%, and 79.58% of their total volume sold in FY24, 23, and 22. JSW cement has the lowest carbon dioxide emission intensity among their peer cement manufacturing companies in India.
Strong corporate lineage
JSW strong lineage, visionary promoters, experienced board and strong management team provide a competitive advantage in growth and opens expansion opportunity for the company. JSW Group with its diversified portfolio, from Steel to power helps them to integrate its resource and used them for optimum utilization, leverages intelligence, negotiate better deals, etc.
Risk Factors of the Company:
Dependency on raw material
As per DRHP, the company has 5 operational mines, of which 4 are in India and 1 is in Fujairah, UAE. Limestone is the primary ingredient for manufacturing clinker. Although the company has entered into long-term leases with the state govt to extract raw material through mining. But if due to lack of demand because of economic slowdown, might lead to lower turnout from mines. Which may lead financial constraints for company and bring up difficulty in fullfing contractual obligations.
Dependency on Group’s holding companies
The company relies heavily on JSW Steel Limited and its subsidiaries along with other related parties for the supply of blast furnace slag and ground granulated blast furnace slag (GGBS). There is no assurance that conflicts of interest will not arise between the company and steel suppliers in the future. Such conflicts could negatively impact the company's business and prospects. Also, any spike in the cost of slag could increase the costs of manufacturing green cementitious products, impacting the company's margin, operations and financial condition.
Dependency on power and fuel
Cement Industrial relies on abundant supply of power and fuel for its operations. Even though the company has installed waste heat recovery systems at its Nandyal plant and Shiva Cement Limited clinker unit. Majority of power requirements is being met through state electricity boards and any fluctuations in supply, increase in tariffs and changes in policies can directly impact operations.
Capacity utilization
The capacity utilization of plants is influenced by various factors such as raw material availability, customer demand, inventory management, and operational efficiency. The table below provides details of the installed clinker capacity and grinding capacity utilization for previous three years.
| Plant name | Plant type | region | Clinker Capacity Utilization in Fiscal 2024 | Clinker Capacity Utilization in Fiscal 202 | Clinker Capacity Utilization in Fiscal 2022 |
| Nandyal | Integrated unit | South | 79.94% | 68.76% | 89.28% |
| Shiva Cement limited | clinker unit | East | 73.14% | 44.57% | 3.42% |
| Total India | 77.76% | 66.22% | 83.14% | ||
| JSW cement FZC | clinker unit | UAE (Serving west India) | 114.14% | 109.29% | 108.43% |
| Total | 84.81% | 78.00% | 90.73% | ||
Plant shutdowns, inability to maintain or increase current capacity utilization levels, which could have an adverse effect on the company's results of operations and cash flows.
Loss making joint ventures
JSW cement has many loss making subsidiaries and loss making ventures, which it need to support for smooth conduct of its operations. The company has issued 48 corporate guarantees on behalf of its subsidiaries and joint ventures, with the outstanding balance of ₹1,376.14 million as of FY24. It subsidies have taken many unsecured loan which carries an interest,. The loan maturity varies from one to three years and if the subsidiary couldn’t repay the loan then the parent company has to pay them back as guarantor.
| Entity Name | Category | FY24 | FY23 | FY22 |
| Shiva cement limited | Subsidiary | -683.25 | -804.7 | -255.19 |
| JSW Green Cement Limited | Subsidiary | -29.15 | -50.76 | -0.34 |
| Utkarsh Transport Private Limited | Subsidiary | -176.25 | -40.93 | -45.2 |
| JSW One Platforms Limited | Joint Venture | -2270.13 | -838.13 | -452.85 |
| JSW Cement FZC | Joint Venture/subsidiary | -808.2 | -492.43 | -400.56 |
Role of roads in transportation
The company relies on India's transportation and logistics networks for transporting raw materials and products. As of FY24, FY23 and FY22, 87.84% of assignment were transported through road network, while rail network only contributed to 12.16%. Freight and handling expenses were 23.84%, 24.24%, and 23.72%. Blockages, inadequacies in India's transportation infrastructure may result in delays in deliveries or lengthen schedules. Transportation strikes could also impact the company's ability to receive supplies and deliver products on time.
| Distribution network | As of March 31, | ||
| 2024 | 2023 | 2022 | |
| Road network used for transport of cement and GGBS as a percentage
of total volume of cement and GGBS sold |
87.84% | 86.72% | 88.32% |
| Rail network used for transport of cement and GGBS as a percentage
of total volume of cement and GGBS sold |
12.16% | 13.28% | 11.68% |
Demand of their product
According to a report by CRISIL, reveals that the cement demand come from mainly three sources, out of them housing take majority share (56-58%), the come infrastructure (29-31%), and industrial/commercial (13-15%). Slow housing demand from private sector could be seen because of recent hype. However government strong boost for housing and infrastructure project could sound demand. Economic slowdowns, changes in budgetary allocation, or changes in government policies could lead to lower demand, potentially impacting business prospects and financial performance.
JSW Cement limited IPO Grey Market Premium
Grey market premium is the premium quoted over the IPO issue price. GMP shows that investors are ready to pay above the upper band of the IPO issue price. GMP is determined in the grey market as per the demand and supply of the shares in the primary market. A grey market is that unofficial ecosystem of unlisted companies' stocks that start trading even before the launch of the IPO to the date of its listing.
Also Read: What is Grey Market Premium in IPO: How is GMP Calculated & Reliable
However, GMP is not a reliable factor, as it keeps fluctuating as per the demand and supply of shares in the primary market. There are numerous factors that affect the stock market in India and individual stock prices of different companies that are already listed and trading in the secondary market. However, for an IPO-bounded company, you can consider the GMP as the speculative listing price of the share
According to various online sources, the Grey Market Premium or GMP of the JSW Cement is trading around Rs XX in the grey market. It means shares are trading at the upper band issue price of Rs XX with a premium in the grey market and may list around the same price.
