JSW Cement ₹3,600 Cr IPO Hits Market

7 Aug 2025 , 12:23 PM

JSW Cement is attempting to carve a niche in the highly competitive cement industry by focusing on ‘Green’ cement. By leveraging its group relationships and manufacturing cement using steel and iron plant waste (instead of limestone), its GGBS cement offers a cleaner alternative.

However, the company incurred losses in FY25 and performed worse than the industry average on several financial ratios. It’s INR 36000 million IPO is part fresh offer and part an offer for sale.

Offer Details of the IPO

Total Offer Size: Up to INR 36,000 million

• Fresh Issue: Up to INR 16,000 million
• Offer for Sale: Up to INR 20,000 million by the following shareholders
• Up to INR 9,385.00 million by Synergy Metals Investments Holding Limited
• Up to INR 1,297.00 million by State Bank of India
• Up to INR 9,318.00 million by AP Asia Opportunistic Holdings Pte. Ltd.

Price Band: Rs. 139 to Rs. 147 per Equity Share

Book Running Lead Managers (BRLMs)

• The BRLMs of the issue are:
• JM Financial Limited
• Axis Capital Limited
• Citigroup Global Markets India Private Limited
• DAM Capital Advisors Limited
• Goldman Sachs (India) Securities Private Limited
• Jefferies India Private Limited
• Kotak Mahindra Capital Company Limited
• SBI Capital Markets Limited

Objectives of the IPO:

De-leveraging/Repayment of Debt

• Repayment of debt to the tune of INR 5,200.00, which will help reduce the company’s leverage.

Capital Expenditures

• Funding capital expenditures to the tune of INR 8,000.00 for part-financing the cost of establishing a new integrated cement unit at Nagaur, Rajasthan

Cement Industry Overview

The cement industry is a vital part of the construction sector, providing essential building materials for infrastructure development, housing, and commercial projects. The industry produces cement, a binding agent that holds aggregates together to form concrete, which is used in various applications, including construction, infrastructure, and industrial projects. The end customers of the cement industry include construction companies, builders, and infrastructure developers.

 

Key Segments

The cement industry can be broadly segmented into two main categories:

• Clinker Production
• Cement Grinding.

Clinker production involves the extraction of limestone and other raw materials, followed by the production of clinker through a process of calcination. Cement grinding, on the other hand, involves the grinding of clinker with gypsum and other additives to produce cement.

Another key segment within the industry is Blended Cement, which involves the production of cement using a combination of clinker and other additives, such as fly ash or slag. Blended cement is gaining popularity due to its environmental benefits and cost-effectiveness.

 

Product Types

The cement industry produces a range of products, including:

• Ordinary Portland Cement (OPC): a general-purpose cement used in construction and infrastructure projects.
• Portland Pozzolana Cement (PPC): a type of cement that uses pozzolana particles, such as fly ash or volcanic ash, to improve its strength and durability.
• Portland Slag Cement (PSC): a type of cement that uses blast furnace slag, a byproduct of the steel industry, to improve its strength and durability.
• Composite Cement: a type of cement that uses a combination of clinker, fly ash, and other additives to improve its strength and durability.

These products are used in various applications, including construction, infrastructure, and industrial projects.

 

Industry Size and Growth Trends

The Indian cement industry is the second-largest cement producer in the world, with a total capacity of approximately 668 million tonnes as of 2024-25. The industry has been growing at a steady pace, with a compound annual growth rate (CAGR) of 7-8% over the past five years. Going forward, the industry is expected to witness a slightly higher growth of 7.5% to 8.5% (based on sources in RHP).

 

Segment-wise Growth Trends

The industry can be broadly segmented into three categories: housing, infrastructure, and industrial/commercial. The housing segment accounts for the largest share of cement demand, followed by infrastructure and industrial/commercial segments.

• Housing Segment: The housing (urban) segment is expected to grow at a CAGR of 6-7% over the next five years, driven by government initiatives such as the Pradhan Mantri Awas Yojana (PMAY) and the Smart City Mission.
• Infrastructure Segment: The infrastructure segment is expected to grow at a CAGR of 8-9% over the next five years, driven by government investments in roads, railways, and urban infrastructure.
• Industrial/Commercial Segment: The industrial/commercial segment is expected to grow at a CAGR of 6-7% over the next five years, driven by government initiatives such as the Production-Linked Incentive (PLI) scheme and the Atmanirbhar Bharat initiative.

Key Drivers of Growth

The growth of the Indian cement industry is driven by several key factors, including:

• Government Initiatives: Government initiatives such as the PMAY, Smart City Mission, and the PLI scheme are driving growth in the housing and infrastructure segments.
• Increasing Demand: Increasing demand from the housing and infrastructure segments is driving growth in the industry.
• Capacity Additions: Capacity additions by cement manufacturers are expected to drive growth in the industry over the next five years.
• Consolidation: Consolidation in the industry is expected to drive growth, as larger players acquire smaller players and increase their market share.

 

JSW Cement Limited: A Leading Green Cement Player

JSW Cement Limited is a leading Indian cement manufacturer, part of the JSW Group, a diversified business conglomerate with interests in steel, energy, infrastructure, and cement. The company was founded in 2006 by Sajjan Jindal, a member of the Jindal family, which has a long history of entrepreneurship and industrial development in India.

History and Background

JSW Cement Limited was established in 2006 as a subsidiary of JSW Steel Limited, one of India’s largest steel manufacturers. The company’s initial focus was on producing high-quality cement for the Indian market, leveraging the group’s expertise in steel manufacturing and its extensive distribution network. Over the years, JSW Cement has expanded its operations, investing in new manufacturing facilities and diversifying its product portfolio to cater to the growing demand for cement in India.

Segments and Products

JSW Cement operates in the following segments:

• Cement: The company produces a range of cement products, including Portland cement, blended cement, and specialty cement, catering to various applications in the construction industry.
• Ready-Mix Concrete (RMC): JSW Cement offers RMC services, providing customers with a convenient and efficient solution for their concrete requirements.
• Construction Chemicals: The company manufactures a range of construction chemicals, including admixtures, waterproofing compounds, and other specialty products.

Manufacturing Facilities

JSW Cement has a strong manufacturing presence in India, with several facilities located across the country. The company’s manufacturing facilities are equipped with state-of-the-art technology, ensuring high-quality products and efficient operations.

• Vijayanagar Plant: Located in Karnataka, this plant is one of the company’s largest manufacturing facilities, with a capacity of 3.2 million tons per annum.
• Nandyal Plant: Situated in Andhra Pradesh, this plant has a capacity of 2.4 million tons per annum and is one of the company’s oldest manufacturing facilities.
• Salboni Plant: Located in West Bengal, this plant has a capacity of 2.4 million tons per annum and is one of the company’s most modern manufacturing facilities.

Associations and Partnerships

JSW Cement’s parent group companies include:

• JSW Steel Limited: As a subsidiary of JSW Steel Limited, JSW Cement has a strong association with the steel industry, enabling the company to leverage the group’s expertise and resources.
• JSW Energy Limited: The company has a partnership with JSW Energy Limited, a leading power generation company in India, to supply power to its manufacturing facilities.

Competitive Landscape

The Indian cement industry is highly competitive, with several large players operating in the market. The company operates in a crowded market space, with numerous established players competing for market share.

Major Competitors

Some of the major competitors in the Indian cement industry include:

• UltraTech Cement Limited: One of the largest cement manufacturers in India, with a strong presence in the domestic market.
• Ambuja Cements Limited: A leading cement manufacturer in India, with a significant presence in the western and northern regions.
• ACC Limited: A well-established cement manufacturer in India, with a strong presence in the southern and western regions.
• Shree Cement Limited: A leading cement manufacturer in India, with a significant presence in the northern and eastern regions.

Competitive Positioning

In comparison to its competitors, the company has a strong presence in the southern and western regions of India.

• Market Share: The company has a market share of around 5-6% in the Indian cement industry, which is relatively small compared to its larger competitors.
• Capacity Utilisation: The company has a capacity utilisation rate of around 80% for its clinker capacity, which is higher than the industry average.
• Product Mix: The company has a diversified product mix, with a focus on premium products such as Portland Pozzolana Cement (PPC) and Ordinary Portland Cement (OPC).

Overall, while the company faces intense competition in the Indian cement industry, its focus on quality, customer service, and diversified product mix has enabled it to maintain a strong competitive position.

Strengths

• Diversified Product Portfolio: JSW Cement has a diversified product portfolio that caters to various customer needs. The company offers a range of cement products, including Portland Slag Cement (PSC), Portland Pozzolana Cement (PPC), and Ground Granulated Blast Furnace Slag (GGBS). This diversified product portfolio enables the company to mitigate risks and capitalize on market opportunities.
• Market leader in eco-friendly GGBS: JSW Cement is India’s single largest manufacturer of Ground Granulated Blast Furnace Slag (GGBS), an eco-friendly product, holding an approximate 84% market share in terms of GGBS sales in Fiscal 2025
• Strategic Location of Plants: The company’s plants are strategically located near raw material sources and key markets, reducing transportation costs and enabling timely delivery of products to customers. For instance, the Nandyal integrated unit is located just one kilometre from the JSW Nandyal limestone mine. Grinding units in Vijayanagar, Dolvi, and Salem are co-located with JSW Steel Limited’s steel plants, ensuring cost-effective transportation of blast furnace slag.

Weaknesses

• Dependence on Raw Material Suppliers: JSW Cement is dependent on raw material suppliers, particularly for blast furnace slag, which is a key additive raw material used in the production of blended cement products. The company’s reliance on a limited number of suppliers for blast furnace slag exposes it to risks related to supply disruptions and price volatility.
• Poorer Financial Ratios: In FY25, the company fared unfavorably vs industry average in RoCE, Net debt to EBITDA and EBITDA margins.
• Regulatory Risks: JSW Cement operates in a highly regulated industry, and changes in government policies and regulations can impact the company’s operations and profitability. The company is also exposed to risks related to non-compliance with environmental and labor laws, which can result in penalties and reputational damage.

Brief Financial Profile

Anemic revenue growth: The company has not witnessed any revenue growth over the past two years. This is despite the significant expansion in its clinker and GGBS capacity. A key reason for the anemic growth has been falling realisations. South India is one of the most competitive cement markets. With lower regional utilisation and high competition, realisations have likely remained under pressure.

 

Slipped into losses in FY25: Continued losses at its associated companies include Shiva Cement and JSW Cement FZC, along with falling realisations have led to the company making losses in FY25. As the company made losses, a comparison of P/E valuations is not possible.

Table: Key Competitors

Company	Revenue (INR million)	EBITDA (INR million)	EV/EBITDA	EPS
JSW Cement	58,130.7	8,153.2		-1.2
UltraTech Cement Limited	759,551.3	133,020.0	28.4	205.1
Ambuja Cements Limited	336,977.0	86,250.0	16.8	17.0
Shree Cement Limited	192,828.3	45,232.5	23.0	311.2
Dalmia Bharat Limited	139,800.0	24,070.0	17.4	36.4
JK Cement Limited	118,791.5	20,270.0	26.5	111.4
The Ramco Cements Limited	85,184.0	12,737.0	25.7	11.5
India Cements Limited	41,487.8	-1,736.9		153.2

Source: RHP

Table: Financial Profile

Particulars (INR m)	Fiscal 2025	Fiscal 2024	Fiscal 2023
Revenue from operations	58130.71	60281.03	58367.24
Total expenses	58598.35	58082.1	58386.77
Share of loss from joint venture and associates	-984.73	-820.28	-186.88
Restated profit/(loss) before tax	-436.43	2243.58	1248.44
Total tax expenses	1201.26	1623.45	208.06
Restated profit/(loss) for the year	-1637.69	620.13	1040.38

Source: RHP