The Sajjan Jindal-run JSW Group is planning to divest a quarter of the promoter holdings in its cement business through a public issue of around Rs 45 billion by 2020.
JSW Cement is on an aggressive expansion plan to take annual installed capacity to 20 million tonne by 2020 from the present 12.8 mt, which will reach 14 mt by March 2019.
"JSW Cement is targeting Rs 180 billion enterprise valuation by the time of the proposed IPO through which the promoters plan to dilute 25 per cent of their holding," the chief executive Nilesh Narwekar said.
He said the proceeds from share sale will be used to retire part of the debt as well as fund capacity expansion beyond 20 mt.
He also said the IPO plan is hinged to the company ramping up its production capacity.
"Once we reach the target capacity of 20 mt, we will later aspires to go for the IPO with a view to unlock the real value of the business," Narwekar said, adding currently the promoters own the entire stake in JSW Cement.
"The improving economic growth scenario, continued thrust on boosting infrastructure and pent-up demand will primary be the drivers for cement consumption going forward. As part of our strategy to capitalise on these opportunities, we are planning to increase our overall capacity to 20 mt by 2020," he said.
Narwekar also said the company is open to inorganic growth route to ramp up capacity and that the ongoing NPA resolution process has opened up lots of opportunities to acquire cement assets and that they are proactively exploring such opportunities.
It has significant presence in the Southern and Western states, and is now building its presence in the East primarily driven by growth in its slag-based cement products.
During the second quarter of, JSW Cement recorded 63 per cent volume growth while industry average was 22 percent in the markets it operates, he said.
JSW Cement currently markets two variants of green cement products, JSW Cement Portland Slag Cement and Concreel HD and has manufacturing plants in the South, West and the Eastern regions.