JSW Cement to raise up to Rs 1,500 crore from two global equity investors

Deal structured as a PE deal with compulsorily convertible preference shares issued to the investors; conversion into equity will be based on performance and valuation at the time of IPO

Sajjan Jindal-led JSW Cement has entered into definitive agreements to raise up to Rs 1,500 crore from two global private equity investors, Apollo Global Management Inc (through its managed funds) and Synergy Metals Investments Holding Ltd.

The transaction is a structured private equity deal wherein compulsorily convertible preference shares (CCPS) are being issued to the investors and the conversion of such CCPS into common equity of the company will be linked to the company’s future performance and valuation determined at the time of the initial public offering.

"We will utilise these funds to grow both organically and inorganically. We plan to enter key new geographies, and expand our share in our existing markets. With new initiatives across our plants and functions, we are prepared to continue to build and play a significant role in the core infrastructure growth of the country,"Nilesh Narwekar, chief executive officer at JSW Cement was quoted as saying.

This investment will help JSW Cement accelerate its capacity expansion from current 14 million tonne to 25 million tonne.

“Apart from strategic capital to finance our growth, investments by Apollo and Synergy bring with them deep validation and trust in our brand.  I would like to take this opportunity to welcome both investors on board and look forward to a long and fruitful association with them,” Parth Jindal, managing director at JSW Cement was quoted as saying.

The Competition Commission of India has recently approved the transaction by Synergy Metals Investment Holding Ltd. Apollo’s transaction is subject to customary closing conditions including regulatory approval.

Synergy Metals and Mining Fund, the parent entity of Synergy Metals Investments Holding Ltd., is a specialised private equity fund investing in the industrial, metals and power sectors globally.

Apollo Global Management is a leading global alternative asset manager having assets under management of approximately $461 billion as of March 31, 2021. The firm's Hybrid Value business provides flexible, tailored equity and debt capital solutions to private and public companies.

Citigroup Global Markets India Private Limited acted as exclusive placement agent on this transaction for JSW Cement. JSW Cement and its promoter are being advised by Khaitan & Co.