After failing to buy out Lafarge and Binani Cement units, JSW Cement now plans to more than double its capacity to 30 million tonnes per annum (mtpa) at a cost of more than ₹12,000 crore by 2025.
The company plans to reach a capacity of 20 mtpa by 2020 at a capex of ₹2,000 crore and raise another ₹3,500 crore through an initial public offering (IPO) to add another 10 mtpa of cement capacity, aiming to be among the top 5 cement players in the country.
Top-5 ambition
Parth Jindal, managing director, JSW Cement, told The Hindu , “We plan to be among the top five cement players in India. Our current capacity is 12.6 mtpa, which will be enhanced to 14 mtpa by April 2019, and to 20 mtpa by December 2020. Then, we will plan for an IPO to increase our capacity to 30 mtpa by adding two cement plants of 5 mtpa each in Rajasthan and Chhattisgarh.” The company will expand its capacity mostly through a combination of brownfield and greenfield projects. However, it is also evaluating various ‘inorganic’ opportunities to further ramp up capacity growth.
With revenue of ₹2,800 crore, an EBITDA margin of 24% and debt of ₹2,400 crore. JSW Cement is looking at enterprise valuation between ₹25,000 crore and ₹30,000 crore while launching its maiden IPO. The company will appoint merchant bankers for its IPO later this year. “With ₹3,500 crore from IPO, we will be in position to invest over ₹10,000 crore in expanding our cement business, as the rest will come from debt,” said Mr. Jindal.
JSW Cement recorded a cumulative volume growth of 54% during the first nine months ending December 31, 2018, compared with the cement industry growth of 20% across participative markets during the same period. JSW entered the cement market in 2009 and has plants in Vijayanagar in Karnataka, Nandyal in Andhra Pradesh, Salboni in West Bengal and Dolvi in Maharashtra.
