Housing revival may bring back cement IPOs
Indian primary markets may see some cement IPOs soon as companies plan to raise funds for capex amidst a revival in housing and infrastructure sectors. At least five cement firms including Emami Cement, Penna Cement, Wonder Cement, Nuvoco Vistas and JSW Cement have drawn up plans to do IPOs in the next one year, investment bankers aware of the discussions said.
For example, Hyderabad-based Penna Cement Industries plans to raise Rs 1,300-1,500 crore and has hired JM Financials, Edelweiss Financial Services and IIFL Holdings as bankers. Penna will hike its capacity to from 10 million tonnes to 16 for Rs 3,500 crore within the next three years.
Similarly, Wonder Cement, which is planning to achieve the capacity of 6.5 million tonnes by the end of this financial year, is in talks with bankers for an IPO. Also, Sajjan Jindal-owned JSW Cement, which has announced an investment of around Rs 1,800 crore for expansion of cement capacity to 20 MT, may tap the primary markets next year. Kolkata-based Emami Group, according to sources, has already appointed bankers for the IPO for its cement division.
NuVoCo Vistas, owned by Ahmedabad-based detergent maker Nirma, recently met bankers to discuss its IPO plans, bankers said. Nirma acquired Lafarge India’s cement assets in 2016 for about Rs 9,400 crore, outbidding Sajjan Jindal-led JSW Cement and Piramal Enterprises.
Several mid-sized cement companies are in an expansion mode and have revealed plans to more than double their capacity in the next four-five years. While some have initiated the IPO process, others have appointed bankers.