JSW Cement revises IPO and capacity expansion plans

India’s JSW Cement has deferred its plan for an initial public offering (IPO) by a year as the slowdown in construction activity continues, according to the Financial Express. It had planned to go public by 2020 once it hit 20Mta of capacity, however, the company has revised this target to December 2021. 

The company expects to go public with a valuation of around INR250bn (US$3.49bn). "We want to first get to 20Mta before we do an IPO, because that is the critical level at which we will have enough scale and a de-risked strategy in terms of raw material, and also we will have (sufficient) market share penetration in all the regions that we are present in," said Parth Jindal, managing director.

JSW Cement has also revised its expansions plans, now targeting 25Mta of capacity by 2023. "Given the fact that we have our own clinker, we have revised our target upwards to have an overall capacity of 25Mta," said Mr Jindal. "Earlier, the biggest risk for the business was not having our own clinker and being dependant on imports, for which prices can go up anytime."

The INR28.75bn required for the expansion will be raised through debt and internal accruals.