India’s JSW Cement filed draft papers for an initial public offering (IPO) worth up to 40 billion rupees (S$628.4 million) on Friday (Aug 16), aiming to cash in on the country’s booming stock market and strong demand for the building material.
The company, part of billionaire Sajjan Jindal’s steel-to-energy JSW Group, will issue new shares worth up to 20 billion rupees, and existing shareholders are set to sell shares of up to 20 billion rupees, the draft papers showed.
This is the group’s second IPO in recent times, coming more than a year after its port-operating arm JSW Infrastructure filed for a public offering.
“The IPO should garner interest from long-term investors as the momentum of infrastructure spending is expected to remain buoyant,” said Ashutosh Murarka, an analyst at Choice Broking.
In India’s competitive cement market – expected to roughly double to US$49.2 billion by 2029 from 2022 levels – makers stand to benefit from an expected infrastructure spending spurt following Prime Minister Narendra Modi’s return to power.
Proceeds from the IPO would be used to partly finance the proposed cement unit in Nagaur, Rajasthan – a state rich in key raw mineral limestone – and trim portions of “certain outstanding borrowings”, the company added.
JSW Cement’s total liabilities increased to 89.3 billion rupees in the fiscal year ended March 2024, from 79.8 billion rupees a year ago.
The proposed offering follows successful listings by FirstCry, Ola Electric, Allied Blenders and Emcure Pharmaceuticals at a time when more than 150 companies have raised over US$5 billion on India’s red-hot stock market so far this year, per LSEG data at end-July.
The Indian equity market has hit record highs over 50 times this year. Reuters
