JSW Cement IPO: Rs 1,600 Cr Fresh Issue, Rs 2,000 Cr OFS; Opens August 7 at Price Band Rs 139–147

JSW Cement is launching its Rs 3,600 crore Initial Public Offering (IPO) via the book-building route. The issue comprises a fresh issue of 10.88 crore equity shares aggregating to Rs 1,600 crore and an offer for sale (OFS) of 13.61 crore shares aggregating to Rs 2,000 crore by existing shareholders.

The IPO opens for subscription on August 7, 2025, and closes on August 11, 2025. The basis of allotment is expected to be finalized on Tuesday, August 12, 2025, with the stock tentatively scheduled to list on the BSE and NSE on Thursday, August 14, 2025.

The price band for the IPO has been set at Rs 139 to Rs 147 per share, with a lot size of 102 shares. For retail investors, the minimum investment amount is Rs 14,178. For non-institutional investors:

• sNII (small): Minimum 14 lots (1,428 shares) = Rs 2,09,916
• bNII (big): Minimum 67 lots (6,834 shares) = Rs 10,04,598

JM Financial Limited is acting as the book-running lead manager to the issue, while Kfin Technologies Limited is the registrar.

See details below:

Use of Proceeds and Promoter Details:

JSW Cement plans to utilize the net proceeds from the fresh issue of its Rs 3,600 crore IPO for a combination of expansion and debt reduction initiatives. A significant portion—Rs 800 crore—is earmarked for part-financing the cost of establishing a new integrated cement unit in Nagaur, Rajasthan. This expansion is aimed at strengthening the company’s manufacturing footprint in northern India. Another Rs 520 crore will be used for prepayment or repayment, in full or in part, of certain outstanding borrowings, thereby improving the company’s leverage position and enhancing financial flexibility. The remaining proceeds will be allocated towards general corporate purposes.

The promoters of JSW Cement include Sajjan Jindal, Parth Jindal, Sangita Jindal, Adarsh Advisory Services Private Limited, and the Sajjan Jindal Family Trust. Prior to the IPO, the promoters collectively held a 78.62 per cent stake in the company, which is expected to be diluted to 72.34 per cent post-issue. This indicates an equity dilution of 6.28 per cent, reflecting the company's strategy to raise capital for growth while maintaining strong promoter control.

Company Profile:

JSW Cement Ltd. is a leading Indian manufacturer of sustainable green cement and a part of the diversified JSW Group. Founded in 2006, the company follows a circular economy model by using industrial byproducts to produce eco-friendly cement, reducing natural resource usage and carbon emissions.

With seven manufacturing facilities across India—including units in Andhra Pradesh, Karnataka, Tamil Nadu, Maharashtra, West Bengal, and Odisha—and operations in the UAE, JSW Cement offers a wide range of products such as Portland Slag Cement, Portland Composite Cement, GGBS, Ordinary Portland Cement, and allied products like ready-mix concrete and construction chemicals.

As of March 31, 2025, the company had an installed grinding capacity of 20.60 MMTPA and clinker capacity of 6.44 MMTPA, largely built through in-house execution. Through greenfield and brownfield expansions, it plans to double its capacities, targeting 41.85 MMTPA grinding and 13.04 MMTPA clinker capacity. Backed by the JSW Group, JSW Cement is poised for strong growth while maintaining its focus on sustainability and innovation.

Industry Outlook:

India is the world’s second-largest cement producer, contributing around 8 per cent of global output, though far behind China. The industry is highly fragmented, with top players like UltraTech, Ambuja (with ACC), Shree Cement, and Dalmia Bharat controlling about 58 per cent of the market as of FY25. The sector has undergone significant consolidation, with over Rs 1,50,000 crore of capacity changing hands through M&A activity.

(Source: Company’s RHP)

Cement demand is expected to grow at 7.5–8.5 per cent CAGR from FY25 to FY30, driven by infrastructure, housing, and industrial projects. Infrastructure alone is projected to grow at 8.5–9.5 per cent CAGR, with its demand share rising to 31–33 per cent by FY30. Rural and urban housing, along with industrial and commercial segments, are also set to see steady growth between 6–8 per cent CAGR.

On the supply front, the industry is projected to add 245–255 MTPA of grinding capacity by FY30, reaching 915–925 MTPA, with utilization improving to 75–77 per cent. Blended cement’s share is expected to rise to 76–78 per cent, while GGBS demand is forecast to grow at 14–15 per cent CAGR, and Ready-Mix Concrete (RMC) at 9–10 per cent CAGR.

Cement prices are expected to recover in FY26, rising 2–4 per cent to Rs 365–Rs 370 per bag, leading to improved margins of 18–20 per cent. Lower power, fuel, and freight costs will aid profitability, although raw material costs may increase due to higher limestone prices. Blast furnace slag demand is also set to rise at 7.9–8.6 per cent CAGR, with GGBS usage expected to form 25–30 per cent of total slag demand by FY30.

Overall, the Indian cement industry is well-positioned for steady growth, supported by demand momentum, capacity expansion, and a shift toward greener, cost-efficient products.

Indian Cement maker’s capacity share

(Source: Company’s RHP)

Financials:

(Source – Company’s RHP)

Balance Sheet Snapshot

(Source – Company’s RHP)

Key Metrics

(Source – Company’s RHP)

Key Ratios

(Source – Company’s RHP)

Key Performance Indicators

Listed Peer Comparison

Vertical & Horizontal Analysis – JSW Cement

Receivables as a percentage of sales rose slightly from 12.18 per cent (FY23) to 13.45 per cent (FY25), indicating a marginally longer collection cycle. Cash from operations dropped from 23.35 per cent (FY24) to 12.67 per cent (FY25), reflecting earnings pressure and higher working capital needs. Inventory remained steady (~7.4–7.9 per cent), suggesting consistent inventory control relative to sales.

Sales have remained flat over FY23–FY25 (CAGR: -0.14 per cent), dipping in FY25 due to volume or pricing pressures. Receivables rose 10 per cent over the same period (CAGR: 3.23 per cent), largely aligned with revenue. Cash from operations surged in FY24, then normalized in FY25 — still showing a 4.09 per cent CAGR, indicating operational resilience. Inventory declined slightly (CAGR: -1.51 per cent), hinting at improved turnover or tighter working capital control.

Despite muted top-line growth, JSW Cement has maintained working capital discipline. Stable receivables, lean inventory, and decent cash generation in FY25 point to underlying operational strength. A demand revival or better realizations could significantly enhance cash flows going forward.

Strengths:

• Rapid Expansion: Among the newer large players in the Indian cement sector, JSW Cement has quickly scaled up to 20.60 MMTPA grinding capacity.
• Diversified Regional Presence: Derives 56–58 per cent of sales from South India, 20–23 per cent from East, and 20–22 per cent from West India, supported by dedicated regional capacities.
• Market Leader in GGBS: Holds 84 per cent market share in GGBS sales (FY25); green cementitious products form 77.41 per cent of total sales volume.
• Efficient Logistics: Plants are well-connected to raw material sources and key markets via road, rail, and in-plant sidings, reducing freight costs.
• Captive Resources: Meets most of its limestone needs through captive mines and has acquired the Marathwada VI coal block to manage fuel costs.
• Sustainability Edge: Has the lowest CO₂ emission intensity among peers; follows a circular economy model, using industrial by-products as raw materials.
• Strong Distribution Network: As of March 31, 2025, had 4,653 dealers, 8,844 sub-dealers, and 6,559 direct customers.
• JSW Group Synergies: Benefits from the scale, credibility, and brand value of the JSW Group.
• Weaknesses
• Economy-Linked Demand: Heavily reliant on construction and infrastructure sectors; any prolonged economic slowdown can reduce demand.
• Sambalpur Unit Uncertainty: The Sambalpur grinding unit’s transfer to Shiva Cement is uncertain due to ongoing Supreme Court proceedings against Bhushan Power and Steel.
• Supplier Concentration Risk: 92.93 per cent of blast furnace slag is sourced from JSW Steel and its subsidiaries — a high dependency risk.
• Cost Sensitivity: Exposed to volatility in power, fuel (20–25 per cent of costs), and freight (approximately 20 per cent), which can impact margins.
• Regulatory Overhang: SEBI show cause notices issued to promoters, including Sajjan Jindal, could affect reputation and fundraising ability.
• Expansion Risk: Delays or cost overruns in greenfield and brownfield projects could negatively affect financials and growth.
• Recent Losses: The company reported losses in FY2025; some subsidiaries and JVs are also loss-making, requiring financial support.
• Legal and Contingent Liabilities: As of March 31, 2025, legal claims against the company and promoters stood at Rs 133.9 crore and Rs 302.1 crore respectively; contingent liabilities stood at Rs 111.3 crore.
  
  Valuation and Outlook
  At the upper price band of Rs 147, JSW Cement seeks a market capitalisation of Rs 20,041 crore, translating to a market cap-to-sales ratio of 3.34x, which is modest compared to peers like UltraTech (4.62x), Shree Cement (5.66x), and JK Cement (4.33x). However, it still carries a premium valuation on an EV/EBITDA basis at 31.35x (post issue) — the highest among peers — despite being loss-making with a negative ROE of -4.14 per cent. The price-to-book value (P/B) of 5.07x (post issue) is in line with UltraTech and Shree Cement, while cash flow metrics are robust, with a CFO/EBITDA ratio of 0.90 — better than most peers except Shree Cement. Though the IPO lacks earnings visibility in the near term, strong operational efficiency and cash flow conversion lend credibility to its business model. JSW Cement plans to double its cement capacity from 20.6 MTPA to 42 MTPA in the next four years through organic expansion, with a longer-term target of 60 MTPA — aiming for a 7–8 per cent market share in India’s growing cement industry. The company has a clear strategy to avoid aggressive bidding and instead pursue value-accretive acquisitions via IBC or distressed assets, backed by cost advantages through group synergies. Its use of GGBS from JSW Steel significantly reduces capex per tonne and supports margin expansion. A portion of IPO proceeds will also be used to repay Rs 520 crore in debt, lowering its net debt/EBITDA ratio from approximately 3.2x to around 2.5x, which should further strengthen its balance sheet. With India’s cement demand expected to grow at 6–7 per cent CAGR over the next 6–7 years, and JSW Cement positioned to capitalise on government infrastructure push and housing growth, the company offers strong long-term potential despite near-term valuation concerns.
  
  Recommendation
  Given JSW Cement’s aggressive yet well-structured expansion plans, operational synergies from the JSW Group, and its strategic entry into underserved geographies, the IPO reflects a growth premium. However, the lack of profitability and high EV/EBITDA raise short-term valuation concerns. That said, for investors with a multi-year horizon and higher risk appetite, JSW Cement offers an opportunity to participate in the long-term cement growth story. Therefore, we recommend: Subscribe for Long Term.