JSW Cement IPO: Sebi Puts Rs 4,000 Crore Public Offer On Hold; SBI Among Sellers; Key Highlights

JSW Group faces a setback as its upcoming cement company, JSW Cement IPO is put under the hold category by the market regulator SEBI. The company plans to launch an offer for sale of Rs 2,000 crore and a fresh issue of Rs 2,000 crore via IPO, taking the total issue size to Rs 4,000 crore.

As per the latest public issues status by Sebi, JSW Cement IPO is put in abeyance. Sebi said, "Document about which issuance of observations kept in abeyance."

As per the guidelines, SEBI is obligated to keep issuance of observations in abeyance for a period of 30 days 45 days 90 days or more, as the case may be.

JSW Steel filed its draft prospectus with Sebi on August 20, 2024. Brokerage JM Financial is the co-ordinating lead manager for the IPO. The overall IPO size is Rs 4,000 crore including a fresh issue of Rs 2,000 crore and an offer for sale (OFS) of Rs 2,000 crore.

Selling shareholders under the OFS are -- AP Asia Opportunistic Holdings who will offload up to Rs 937.5 crore, while Synergy Metals Investments Holding will sell up to Rs 937.5 crore worth of shares; and the largest public sector lender, State Bank of India (SBI) going to sell stakes worth Rs 125 crore.

The price band, IPO dates, and anchor investment date will be announced in due course once SEBI clears the offer. The face value of the equity shares is Rs 10 each.

Of the total size of the IPO, 50% of the issue will be allotted to qualified institutional investors. Meanwhile, 15% of the size will be reserved for non-institutional investors (NII), and the remaining 35% will be kept for retail individual investors.

The proceeds from the fresh issue will be used for - part financing the cost of establishing a new integrated cement unit at Nagaur, Rajasthan which would be to the tune of Rs 800 crore. At the same time, Rs 720 crore will be utilized for the pre-payment or repayment, in full or in part, of all or a portion of certain outstanding borrowings availed by the company. Rest will be used for general corporate purposes.

The proceeds from the offer for sale will be used by the selling shareholders and the company will have no part in it.

Companies like JM Financial, Axis Capital, Citigroup Global Markets India, DAM Capital Advisors, Goldman Sachs Securities, Jefferies India, Kotak Mahindra Capital Company, and SBI Capital Markets are acting as the book-running lead managers. And, KFin Technologies is the registrar of the IPO.

JSW Cement is among the fastest-growing cement manufacturing companies in India in terms of increase in installed grinding capacity and sales volume from Fiscal 2014 to Fiscal 2024 (among the top 10 cement manufacturing companies in terms of installed capacity), according to the CRISIL Report. Over this period, our installed grinding capacity and sales volume grew at a compound annual growth rate ("CAGR") of 14.14% and 19.06% respectively, as compared to the industry average CAGR of 7.31% and 7.56% respectively according to the CRISIL Report.

Post the IPO, the company plans to list its shares on BSE and NSE.