JSW Cement Board Approves Merger of Shiva Cement

JSW Cement Limited has received its board’s approval to merge its subsidiary, Shiva Cement Limited, into itself. This merger is currently in its first stage of approval. The company will now seek the requisite clearances from stock exchanges, the National Company Law Tribunal (NCLT), Odisha Industrial Infrastructure Development Corporation, and other statutory and regulatory authorities, as applicable.

Shiva Cement: A Subsidiary of JSW Cement

Shiva Cement Limited, established in 1985, is a cement production company headquartered in Maharashtra. The company operates two manufacturing plants in Odisha: one in Sundargarh, with a clinker production capacity of 1.5 Million Metric Tonnes Per Annum (MMTPA), and the other in Sambalpur, with a cement grinding capacity of 1 MMTPA.

Shiva Cement is an NSE and BSE listed subsidiary of JSW Cement, and has a market capitalisation of approx. ₹490 Cr. JSW Cement holds a 66.23% stake in the company.

JSW Cement to Emerge as ‘Single Unified Cement Platform’

Under this approved amalgamation scheme, Shiva Cement will be merged with JSW Cement, and the latter will emerge as a ‘single unified cement platform’.

This merger will be executed via an all-share swap. JSW Cement will issue 5 equity shares (face value of Rs. 10 each) for every 41 Shiva Cement shares (face value of Rs. 2 each). As a result of this merger, both companies’ financial statements will be balanced by removing internal debts and duplicate costs to show the economic value of the merged business.

This transaction is expected to be completed within 12-14 months, subject to timely receipt of regulatory approvals.

What Does This Merger Mean for JSW Cement?

Mr Nilesh Narwekar, CEO of JSW Cement, said, “The proposed merger is a strategic step towards creating a more integrated and efficient business…will unlock operational and financial synergies….and simplify our corporate structure”.

This merger will also contribute to JSW Cement’s production capacity targets by providing backward integration. Scaling up the capacity requires uninterrupted access to raw materials, and Shiva Cement owns limestone reserves in Sundargarh, Odisha. With this merger, JSW Cement will gain direct control over these reserves, securing the raw materials needed to feed its new cement production lines without relying on external suppliers.

JSW Cement has set a target of achieving a cement production capacity of 35.25 MMTPA by 2028 and further increasing it to 68 MMTPA in the years following 2028. Currently, the company’s cement production capacity stands at 24 MMTPA. The targeted capacity will be achieved through a combination of brownfield and greenfield expansions.

About JSW Cement: Mumbai-based JSW Cement is a part of the JSW Group. The company has its facilities in locations which include Andhra Pradesh, Karnataka, West Bengal, Maharashtra, Odisha, and the UAE, among others.