SBI invests Rs 100 crore in JSW Cement to acquire a minority stake

The State Bank of India (SBI) on Tuesday has acquired a minority stake in JSW Cement Limited, with an investment of Rs 100 crore in the company via compulsorily convertible preference shares (CCPS).
“We have increased our capacity from 6MTPA to 14MTPA and are now working towards achieving the 25MTPA milestone over the next 24 months…I welcome SBI as a strategic investor at JSW Cement and look forward to a long & fruitful association with them,” said Parth Jindal, Managing Director of JSW Cement.

The conversion of such CCPS into common equity of the company will be linked to the company’s future business performance and valuation determined at the time of the proposed initial public offering, he added.

The investment augurs well for the company’s IPO plans, said JSW Cement’s director of Finance, Narinder Singh Kahlon.

"Financing our growth and expansion strategy with investment from a power banking partner such as SBI sets us up very well for our planned IPO in the next 12-18 months,” Kahlon said.

The SBI transaction with JSW Cement comes close on the heels of the Rs 1,500 crore investments made by two global private equity investors, Apollo Global Management Inc. (through its investment entity in Singapore) and Synergy Metals Investments Holding Ltd earlier this year.

Part of the diversified $13-billion JSW Group, JSW Cement has manufacturing units in Vijayanagar in Karnataka, Nandyal in Andhra Pradesh, Salboni in West Bengal, Jajpur in Odisha, and Dolvi in Maharashtra.

The company, which was only into Portland slag cement (PSC) till recently, entered the ready mix concrete (RMC) business in 2021 with its first commercial unit in Chembur, Mumbai, to enter a Rs 18,750-crore addressable market that is slated to grow at a compounded annual growth rate (CAGR) of 9% till 2025, driven by housing and construction sector boom.

JSW Cement is also aggressively foraying into ground granulated blast furnace slag (GGBS), a variant that is becoming popular as a building material. It also has higher margins of 300 bps compared to other varieties.