JSW Cement Plans Rs 1,800 Crore Capex, IPO By March 2020
JSW plans Rs 1,800 crore capex over next two years.
JSW Group plans to take its cement arm public by March 2020 as it bets on growing demand in Asia’s third largest economy.
JSW Cement Ltd. would come out with an initial public offering between December 2019 and March 2020, Parth Jindal, managing director of JSW Cement, said. The company plans to list on exchanges after reaching a production capacity of 20 million tonnes a year, he said. It will invest Rs 1,800 crore to boost the output in the next two years, he said.
We are also planning on aggressively acquiring limestone blocks in central and northern India so that the proceeds of the IPO go towards deleveraging the balance sheet and also fuelling the capacity from 20 MTPA to 30 MTPA.Parth Jindal, Managing Director, JSW Cement
Jindal said the company will target a capacity of 30 MTPA by 2025 and 50 MTPA by 2030, and will also consider acquisitions. JSW Cement has already increased capacity at its Dolvi plant in Maharashtra to cater to the demand in the west. It’s investing Rs 750 crore to more than double the capacity to 2.2 MTPA and will spend another Rs 500 crore to take it to 4.5 MTPA.
The company targets a 20 percent market share in the west by catering to states like Maharashtra and Gujarat, he said. In the east, it plans to enter Bihar, Jharkhand and Orissa in the next two months.
Demand to Pick Up From October
Jindal said the demand was muted in the quarter ended September, primarily because of monsoon. He expects a growth of 5 percent starting October.
“Overall, construction activity remains muted and we have seen demand only from government tenders but private sector investment is very low,” he said.
The company is preparing to launch JSW Paints at an investment of Rs 1,000 crore by mid-2018, and the work on the plant will begin in January.