UltraTech sets ₹10,000-crore capex plan, nears 200 MTPA capacity
Capacity addition and market outlook
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Industry competition
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UltraTech Cement has earmarked up to ₹10,000 crore in capital expenditure for FY26 to expand capacity and undertake energy and efficiency-related initiatives, according to its latest annual report. The company expects around 7 per cent growth in FY26, reports PTI.The Aditya Birla Group company recently acquired India Cements and the cement business of Kesoram Industries, adding 26.3 million tonnes per annum (MTPA) of grey cement capacity. It has also outlined an organic expansion plan of 28.8 MTPA by FY27.In FY25, UltraTech crossed the ₹75,000 crore revenue mark and moved closer to achieving 200 MTPA of total capacity. As of June 30, 2025, its consolidated capacity stood at 192.26 MTPA."Although our net debt to EBITDA (pre-tax profit) ratio rose to 1.33x in March 2025, we anticipate higher volume growth and an improving EBITDA profile to reduce this rapidly," Managing Director K C Jhanwar said.In FY25, UltraTech added 42.6 MTPA of grey cement capacity, through both organic and inorganic means, taking the total to 188.8 MTPA. Of this, 16.3 MTPA was added organically, accounting for 55 per cent of total cement sector expansion in the year.Jhanwar noted that acquisitions of India Cements and Kesoram Industries have expanded UltraTech's presence in the South Indian market. The company is also scaling up green energy capacity by 107 MW at the former Kesoram units.On India Cements, which reached EBITDA break-even in the March 2025 quarter, UltraTech said, 'A capex plan is being made for investments over the next two years for improvement in all areas of operations to bring these assets at par with UltraTech standards.'The company reported a marginal decline in EBITDA in FY25 due to lower sales realisation amid weak demand. However, it expects demand to rebound in FY26."While cement demand moderated to 4-5 per cent in FY 2024-25 owing to a temporary slowdown in government infrastructure spending and a prolonged monsoon, it is likely to rebound to 6-7 per cent in FY 2025-26," Jhanwar said.India's cement demand is currently estimated at 435 million tonnes. The Union Budget has allocated ₹11.21 lakh crore for the infrastructure sector, which the company expects to support demand.UltraTech continues to face competition from Adani Group's Ambuja Cements, which crossed 100 MTPA capacity in FY25 and aims to reach 118 MTPA by FY26 and 140 MTPA by FY28.Adani Group entered the cement sector in September 2022 by acquiring stakes in Ambuja Cements from Holcim for $6.4 billion. Since then, it has acquired ACC Ltd and smaller cement companies including Penna Cement, Sanghi Industries, and Orient Cement.
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Mint
3 hours ago
- Mint
JSW Cement promises a capacity expansion spree but says no to buyouts. 'We don't have the aukat,' says Parth Jindal
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The company's balance sheet does not have the necessary capital or cash flow to be able to outcompete its larger peers in a bidding war for existing assets in the mergers and acquisitions market, Jindal said. Read more: Boult rebrands as GoBoult, takes premium detour en route to ₹1,000-crore IPO goal 'I don't want to get into a bidding war with a player who's much bigger than me and is much stronger than me today," said Jindal. 'We don't have the aukaat right now to fight the big boys, and I don't want to go to my father for help in this business," he said to a room full of reporters in Mumbai on Monday, using the Hindi term that loosely translates to financial capability. JSW Cement said that its carbon dioxide emissions were half of the industry average. This was due to it utilizing slag—a waste product in steelmaking—as a key input material. Due to this, about 64% of the company's raw materials were recycled compared to 25% on average for its peers. Tough competition JSW Cement competes with players like Aditya Birla-backed UltraTech, which has a consolidated capacity of 192.26 mtpa, Adani Cements, which has surpassed 100 mtpa and Dalmia Bharat, which has a capacity of 49.5 mtpa. The price band for the IPO has been set at ₹139 to ₹147. At the upper end of the price band, JSW Cements will have a market cap of ₹200.40 billion. In comparison, key competitors UltraTech lead with a market cap of ₹3.61 trillion, followed by Ambuja Cements at ₹1.49 trillion, Dalmia Bharat at ₹417.67 billion, and ACC at ₹336.16 billion. From the IPO proceeds, about ₹800 crore will be used to partly fund a new integrated cement facility in Nagaur, Rajasthan. Another ₹520 crore will be allocated for the repayment or prepayment of existing borrowings, and the remaining funds will be used for general corporate purposes After achieving the 42 million tonnes per annum (mtpa) capacity target, the company has set a secondary target of reaching 60 mtpa in its effort to corner 10% of India's cement industry. India consumed around 435 million tonnes of cement in FY25, Jindal said, adding that cement consumption was expected to grow in line with India's GDP at about 6-7% annually to reach approximately 700 million tonnes in 6-7 years. 'To achieve a 10% share, then the company would need to produce 70 million tonnes. However, for now, the company is targeting 60 million tonnes, which would give us a 7-8% share," said Jindal. The capacity addition would be focused on new geographies. Currently, JSW Cement is present in southern, western and eastern India. It wants to become a pan-India player by entering north and central India. Read more: No FASTag, no bank, no fluff: How Paytm cut its way to a profit The company is making plants closer to their own limestone mines and near ports to make logistics cheaper. 'We leverage the group synergy when it comes to distribution of our products," said Jindal. 'Cement and TMT rods are sold at the same counters. JSW Steel is the largest TMT producer in the country, and hence, this gives us a very good headstart whenever we enter any new geographies." Jindal claimed that JSW Cement would spend at least 40% less than the company's peers to add every tonne of new cement capacity. This was because of the company's product mix. Group synergy The company uses slag secured from JSW Steel to make Ground Granulated Blast Furnace Slag (GGBS), a substitute for cement that is not only cheaper, but also more suitable for infrastructure projects. 'When you look at the capex needed for GGBS, it's equivalent to a grinding unit, but the earning that you make on GGBS is equivalent to the earning you make on cement. So with way less capex, you're able to build GGBS capacity and earn as much Ebitda as cement. So that's one big advantage we have," said Jindal. Read more: Another green energy company to take the confidential route to an IPO The IPO size for JSW Cement was reduced from ₹4,000 crore to ₹3,600 crore, with the entire reduction in the primary capital. When the draft red herring prospectus (DRHP) was filed, the industry was going into a downturn, but now industry conditions have improved, and the cement maker's own performance has strengthened, reducing immediate capital needs, said Jindal, adding the company wants to minimise equity dilution at this stage. It may consider dilution at a later stage at a better valuation, he said. JSW Cement will launch its ₹3,600 crore IPO on 7 August and be listed on the stock exchanges on 14 August.
The Hindu
3 hours ago
- The Hindu
IPO-bound JSW Cement opts out of cement war
JSW Cement, whose ₹3,600-crore IPO is opening on August 7, is not looking to acquire new businesses, but is set to focus on organic growth, said MD Parth Jindal. 'We don't have the aukat [stature] right now to fight the big boys and I don't want to go to my father for help in this business,' said Mr. Parth Jindal, the son of leading industrialist and the Chairman of the JSW Group Sajjan Jindal. Explaining further, he said that the firm was not interested in competing with either Ultratech or Adani, currently the top two players in terms of market share in the cement industry. India's cement players have been competing to expand through acquisition in the industry in the past two years. Adani Group has been eyeing the top spot which is now occupied by Birla-owned Ultratech Cement. The latter holds 22% of the 637 million tonnes per annum (MTPA) of capacity, according to the prospectus of JSW in Fiscal 2024. Adani, with its Ambuja and ACC acquisitions, controls 16% of the capacity. It has also acquired smaller players like Penna Cement and Orient Cement. Ultratech, too, acquired India Cements and a minority stake in Star Cement. In this context, Mr. Jindal said that the company would not consider acquisitions until they touch a capacity of 42 million tonnes. Currently, the company has a capacity of 20.6 million tonnes, which is 3% of the total capacity in fiscal 2024. 'We are working on getting to 10% (market share). Visibility is about 6% to 8%,' he said in a media briefing after the announcement to list. The company is also not looking to enter the South Indian market as Mr. Jindal said he believed that it is 'overcrowded and lacks pricing power.' JSW plans to stick to expansion in North and Central India. The company's shares are priced at ₹139 to ₹147 per equity share in lots of 102 shares and multiples thereafter. The IPO is for ₹1,600 crore of fresh issue and the rest on offer for sale. The company plans to use the proceeds to finance its cement unit in Rajasthan, debt payment and general costs. The bidding closes on August 11.
Time of India
5 hours ago
- Time of India
JSW doesn't have 'aukaat' to take on Adanis, Birlas; will grow cement biz organically: MD Jindal Parth
JSW Group does not have the 'aukaat' or financial muscle to take on powerful competitors like Adanis and Birlas to acquire cement assets, and will concentrate on growing its portfolio by itself, a top official said on Monday. JSW Cement has set a price band of Rs 139-147 per share, valuing the 17-year-old company at Rs 20,000 crore at the upper end of the price band. The issue, which includes a fresh issue of Rs 1,600 crore of shares and Rs 2,000 crore of shares to be sold by current shareholders through Offer for Sale, will be open between August 7-11. Productivity Tool Zero to Hero in Microsoft Excel: Complete Excel guide By Metla Sudha Sekhar View Program Finance Introduction to Technical Analysis & Candlestick Theory By Dinesh Nagpal View Program Finance Financial Literacy i e Lets Crack the Billionaire Code By CA Rahul Gupta View Program Digital Marketing Digital Marketing Masterclass by Neil Patel By Neil Patel View Program Finance Technical Analysis Demystified- A Complete Guide to Trading By Kunal Patel View Program Productivity Tool Excel Essentials to Expert: Your Complete Guide By Study at home View Program Artificial Intelligence AI For Business Professionals Batch 2 By Ansh Mehra View Program Parth Jindal, the managing director of the IPO-bound JSW Cement, told reporters here that entrenched competitors have very strong balance sheets, with low or no debt and a lot of cash. "...if an Ultratech or an Adani or a Dalmia or a Shree wants to acquire anything, they can outmuscle JSW Cement very easily. Right now we don't have the 'aukaat', I would say, to challenge them in any acquisition," Jindal said, answering a specific question on inorganic growth and why the company has not been focusing on acquisitions. Making it clear that he does not wish to go to his father - group chairman Sajjan Jindal - for money to make an acquisition, Parth said JSW Cement does not want to get into a bidding war of any kind with bigger and more powerful competition and will restrict to studying the assets for now. Live Events He reiterated that the company, which is intending to raise Rs 3,600 crore through its maiden share sale to the public this month, does not have the financial muscle to take on the "big boys" and added that he has asked the management not to get "distracted" by such opportunities which come up on the horizon. It can be noted that both the Aditya Birla Group-owned Ultratech and more recently the Gautam Adani group have relied on big-ticket acquisitions to grow business. Making it clear that he has "deep admiration and respect" for competition, Parth Jindal said the acquisition proposals right now are either subscale or not in the right geography, and conceded that if they are good, the bigger rivals will move aggressively to acquire them. Therefore, JSW Cements will look at growing its business organically, at least till it implements the medium term plan of doubling capacity to 42 million tonnes an annum, he said, adding that there may be more serious consideration to acquisition as it moves towards its ambition of being a 60 MTPA capacity player which will help it break into the top-5 in the country. A 60 MTPA capacity in the next seven-odd years will give the company a market share of up to 8 per cent in the cement industry, he said, adding that the ambition there is to have a 10 per cent market share in the same timeline. He also said that competition has behaved "irrationally" last year to book revenues by lowering prices last year, but some semblance of better behavior has set in lately. However, being a smaller player, JSW Cement continues to be dictated by what the bigger companies have to decide. The company wishes to expand in North, Central and Northeast India, and has drawn a plan of setting up assets including a Rs 800-crore unit in Punjab's Talwandi. At present, a higher contribution of Ground Granulated Blast Furnace Slag (GGBS) in the capacity makes JSW Cement's cost of capacity addition 40 per cent cheaper than competition but going ahead, as it enters newer markets, the competitive advantage will be off, Jindal said. He explained that for GGBS, it depends on residues from JSW group's assets in south India but the same will not be available up north or other markets. When asked about the reasons for scaling down the IPO size from Rs 4,000 crore to Rs 3,600 crore, Jindal said it is led by business requirements in current times and also to make future dilutions possible. At the time of announcing the IPO, the cement industry's condition was not as good, necessitating a higher sum of money, he added. Jindal said the company plans to repay Rs 520 crore of debt through the IPO proceeds and use the remaining money for capacity expansion. The debt, which stands t 3.2 times of pre-tax profit of Rs 865 crore in FY25-end, is aimed to be reduced to 2.5 times over the medium-term, he said.
