SEBI Halts JSW Cement's Rs 4000-Crore IPO Pending Observations

Capital markets regulator Sebi has paused the Rs 4,000-crore IPO of JSW Cement without specifying reasons. The IPO includes a Rs 2,000 crore equity share issue and a Rs 2,000 crore offer-for-sale by shareholders. Proceeds will partly fund a new unit and debt payment.

Capital markets regulator Sebi has put on hold the proposed Rs 4,000-crore initial public offering (IPO) of JSW Cement.

Without specifying reasons, Sebi stated that the ''issuance of observations (has been) kept in abeyance,'' according to an update on its website on Monday.

JSW Cement, part of the diversified JSW Group, filed the preliminary IPO papers with Sebi on August 16.

The proposed IPO consists of a new issue of equity shares worth Rs 2,000 crore and an offer-for-sale (OFS) of Rs 2,000 crore by investor shareholders, according to the draft red herring prospectus (DRHP) filed with the regulator.

Under the OFS, AP Asia Opportunistic Holdings Pte. Ltd and Synergy Metals Investments Holding Ltd will offload shares worth Rs 937.5 crore each and State Bank of India (SBI) will divest shares valued at Rs 125 crore.

Going by the regulator's website, Sebi can keep issuance of observations in abeyance for 30 days or 45 days or 90 days or more, as the case may be.

In market parlance, Sebi's observations are a kind of go-ahead to float a public issue.

The regulator issues observations only after receiving a copy of in-principle approval from all stock exchanges on which the issuer intends to list its securities offered through the offer document.

As per the draft papers, proceeds from the fresh issue to the tune of Rs 800 crore will be used for partially financing the establishment of a new integrated cement unit in Nagaur, Rajasthan, while Rs 720 crore will be allocated for payment of debt and the remaining funds will be allocated for general corporate purposes.

JSW Cement, which has a manufacturing capacity of 19 MT annually, aims to achieve a capacity of 60 MTPA. It currently has manufacturing units at Vijayanagar in Karnataka, Nandyal in Andhra Pradesh, Salboni in West Bengal, Jajpur in Odisha and Dolvi in Maharashtra. Besides, JSW Cement through its subsidiary Shiva Cement operates a clinker unit in Odisha.

JSW Group has business interests in sectors such as steel, energy, maritime infrastructure, defence, B2B e-commerce, realty, paints, sports and venture capital. JM Financial Ltd, Axis Capital Ltd, Citigroup Global Markets India Private Ltd, DAM Capital Advisors Ltd, Goldman Sachs (India) Securities Private Ltd, Jefferies India Private Ltd, Kotak Mahindra Capital Company Ltd and SBI Capital Markets Ltd are responsible for managing the company's IPO process.

(With inputs from agencies.)