JSW Cement(JSWCL) is a manufacturer of green cement in India. The company operated seven plants across the country, including one integrated unit, one clinker unit, and five grinding units located in Andhra Pradesh (Nandyal plant), Karnataka (Vijayanagar plant), Tamil Nadu (Salem plant), Maharashtra (Dolvi plant), West Bengal (Salboni plant), and Odisha (Jajpur plant and the majority-owned Shiva Cement clinker unit).

JSWCL focuses on manufacturing green cementitious products such as Portland slag cement, Portland composite cement, and ground granulated blast furnace slag. The company also produces ordinary Portland cement and a range of allied products including ready-mix concrete, construction chemicals, waterproofing compounds, and screened slag.

As of March 31, 2025, the company had installed grinding capacity of 20.60 million metric ton per annum (MMTPA) and had an installed clinker capacity of 6.44 MMTPA which includes the installed clinker capacity of JSW Cement FZC. Majority of its capacity has been developed organically by its in-house project management team, demonstrating its strong project execution capabilities.

JSWCL is expanding its presence across India by entering newer geographies and adding to its capacities through green-field as well as brown-field expansion. These capacity additions are expected to increase the company’s installed grinding capacity by 103.16% from 20.60 MMTPA to 41.85 MMTPA and installed clinker capacity by 102.48% from 6.44 MMTPA to 13.04 MMTPA.

The company is part of the JSW Group, a multinational conglomerate with a portfolio of diversified businesses across various sectors including steel, energy, maritime, infrastructure, defense, business-to-business e-commerce, realty, paints, sports and venture capital.

Object of the offer

The IPO consists of a fresh issue of Rs 1600 crore and offer for sale of Rs 2000 crore.

The selling shareholders include AP Asia Opportunistic Holdings Pte Ltd who will offload 63387755 equity shares at upper price band aggregating Rs 931.8 crore, Synergy Metals Investment holding will offload 63843537 equity shares at upper price band aggregating Rs 938.5 crore and State Bank of India will offload 8823129 equity shares at upper price band aggregating Rs 129.7 crore.

Out of the proceeds from the fresh issue, Rs 800 will be used to part finance the cost establishing a new integrated cement unit in Nagpur, Rajasthan, Rs 520 crore will be used for repayment/ prepayment/ redemption, in full or in part, of certain borrowings availed of by the company and the balance for general corporate purposes.

Strengths

JSWCL is among the recent large entrants in Indian cement sector and has at rapid pace established its presence with 20.60 MMTPA of grinding capacity. The company is well diversified with deriving 56%-58% of its sales volumes from South India with its dedicated 11 MMTPA of cement capacity for the region, followed by Eastern region 20%-23% and Western region 20%-22%.

JSWCL is India’s largest manufacturer of ground granulated blast furnace slag (GGBS), an eco-friendly productproduced entirely from blast furnace slag (a by-product of the steel manufacturing process), with a market sharein terms of GGBS sales of 84.00% in FY 2025. The company’s green cementitiousproducts which include (i) products with GGBS, (ii) Portland slag cement (PSC), (iii) Portland compositecement (PCC) and (iv) others constituted 77.41% of its sales volume in FY 2025. GGBS is used in a wide range of infrastructure projects including highways, ports and bridges.

JSWCL has operations across the southern, western and eastern regions of India and in each region, the company’s plants are well connected by road and/or rail to their respective raw material sources and key consumption markets. Some of the company’s plants are also equipped with in-plant railway sidings while other plants are located in close proximity to public railway sidings.Proximity of grinding facilities to raw material sources as well as markets reduces freight cost.

The company meets majority of its limestone requirements from captive mines. The company has adequate reserves considering its lower limestone requirements due to focus on blended cement and GGBS. The company recently acquired rights of Maratwala VI coal block in Madhya Pradesh. This will meet part of its coal requirements for clinker production, keeping lid on fuel costs to a certain extent.

JSWCL has the lowest carbon dioxide emission intensity among its peer cement manufacturing companies in India and the top global cement manufacturing companies. Its circular economy approach is at the center of its business model which places emphasis on the utilization of industrial by-products such as blast furnace slag, Al-killed slag, argon oxygen decarburization slag, fly ash, red mud and chemical gypsum as raw materials to reduce the use of finite natural resources such as limestone. It also utilizes waste derived resources as its raw materials.

The company has an extensive sales and distribution network comprising of dealers, sub-dealers and warehouses across its markets of operations to serve the retail demand for its cement and allied cementitious products (trade sales). In addition, the company sells its products to direct customers (non-trade sales). As on March 31,2025, the company had 4653 dealers, 8844 sub-dealers, and 6559 direct customers.

As part of the JSW Group, the company benefit from synergies with the long established“JSW” brand. The company also benefits from the scale of the JSWGroup’s overall operations.

Weaknesses

The company’s business is related to construction activity and infrastructure developments in India and demand for its products is largely dependent on the output of the construction and real estate industries. The performance of these sectors is influenced by the general economic conditions prevalent in India. A slowdown in the Indian economy could adversely affect the company’s business, especially if such a slowdown were to be continued and prolonged.

A grinding unit at Sambalpur, Odisha is currently being constructed by Bhushan Power and Steel, a Group Company, and post commencement of operations this unit is proposed to be transferredto Shiva Cement, the company’s subsidiary. The Supreme Court of India pursuant to its order dated May 2, 2025, has directed for initiation of liquidation proceedings against Bhushan Power and Steel Limited, which has subsequently been stayed by the Supreme Court of India. There can be no assurance that the Sambalpur plant will commence operations within the timeline or at the planned costs and that Bhushan Power and Steel will not be liquidated. Any adverse occurrence in relation to Bhushan Power and Steel or in relation to the Sambalpur may significantly impact the company’s expansion plans.

The company is significantly dependent on JSW Steel and its subsidiaries for the supply of blast furnace slag (92.93% of total blast furnace slag consumed in Fiscal 2025), which is a key additive raw material used for manufacturing green cementitious products such as ground granulated blast furnace slag and blended cement. The loss of one or more such suppliers could adversely affect its business.

Power and fuel expenses account for 20-25% and freight expenses account for around 20% of the cement sector’s operating cost. Adverse price movements of coal, petcoke and freight cost can have an adverse impact on the profitability of the company.

The Securities and Exchange Board of India has issued show cause notices inter-alia to certain members of the promoter group and one of its promoters, Sajjan Jindal, among others, inter-alia under the provisions of the Securities and Exchange Board of India Act, 1992, and the Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market)Regulations, 2003. Any adverse outcome in relation to such show cause notices, may impact the reputation and ability to raise funds from capital markets transactions.

Financial condition and business prospects of the company could be materially and adversely affected if the company is not able to complete its green-field and brown-field expansion projects as planned or if they experience delays or cost overruns.

The company incurred losses in FY2025. Further, certain of its subsidiaries and joint ventures have incurred losses in the past. If its subsidiaries and joint ventures continue to incur losses, the company maybe required to continue providing financial support to them and its financial condition could be adversely affected.

Outstanding legal claims against the company and promoters stood at Rs 133.9 crore and Rs 302.1 crore respectively as on March 31,2025.

Total contingent liabilities as on March 31,2025, stood at Rs 111.3 crore.

Valuation

For FY 2025, consolidated sales were down by 3.6% to Rs 5813.07 crore. This decrease was primarily on account of reduction in cementrealization per Ton by 7.98% from Rs 4,909.81 in Fiscal 2024 to Rs 4,517.93 in Fiscal 2025, which offset increase in the sales volumes of cement and GGBS from 6.94 MMT and 5.08 MMT in Fiscal 2024 to 7.09 MMT and 5.18 MMT in Fiscal 2025, respectively. OPM dropped 320 bps to 12.28% which led to 23.5% decline in operating profit to Rs 713.73 crore. Other income increased 17.5% to 101.59 crore while interest cost increased58.4% to Rs 664.03 crore and depreciation increased 3.6% to Rs 450.15 crore. Loss before tax stood at Rs 43.64 crore as against profit before tax of Rs 224.36 in FY2024. Tax expenses declined by26.0% to Rs 120.13 crore. Net loss stood at Rs 114.09 crore as against net profit of Rs 89.81 crore in FY2024.

As the company is making losses, P/E ratio cannot be calculated. At the higher price band of Rs 147, the offer is made at around 36.79times post-IPO EV/FY2025 EBITDA and EV/Ton of 1274.7.Listed industry peers of the company are Shree Cement, JK Lakshmi Cement, JK Cement, Ultratech and Dalmia Bharat. In comparison Shree Cement trades at 26.32 times its EV/FY2025 EBITDA, JK Lakshmi Cement trades at 13.98 times its EV/TTM EBITDA, JK Cement trades at 25.28 times its EV/TTM EBITDA, Ultratech trades at 26.96 times its EV/TTM EBITDA and Dalmia Bharat trades at 16 times its EV/TTM EBITDA.