JSW Cement raises Rs 400 crores to fund expansion plans

JSW Cement, part of the Sajjan Jindal-led JSW Group, has said that it has raised Rs 400 crores from MUFG Bank India as its first-ever sustainability-linked loan. 

We at Jobaaj reported sustainability-linked loans when Tata Power raised funds from foreign lenders. JSW Cement is also using similarly raised funds to fund its capital expenditure needs for expanding its capacity to 25 MTPA by FY25 from its existing capacity of 17 MTPA. 

"The Sustainability Linked Loan raised from MUFG Bank reiterates our purpose of pursuing sustainable business growth while ensuring a sustainable future for the next generations. The new capital will enable us to meet our goal of achieving 25 MTPA capacity in near term." Parth Jindal, MD of JSW Cement, said. 

According to the company, MUFG Bank has acted as the mandated lead arranger and bookrunner & the sustainability loan coordinator for the transaction. In contrast, DNV acted as a second-party opinion provider. This was MUFG's first transaction from its office in GIFT city(an under-construction central business district in Gujarat). 

The company has also developed a Sustainability Linked Loan Framework to link its fundraising with long-term ESG objectives. Moreover, the company has also opted to measure performance against the Sustainability Performance Target (SPT) as Kilograms of CO2 emitted per ton of cement manufactured, covering all of its manufacturing operations. 

This capital raise is the third one by JSW Cement in less than two years. Both JSW and Ultratech were among the parties who expressed interest in acquiring Ambuja and ACC but ultimately lost to the Adani Group. As demand for cement is expected to grow in the near future & all players focusing on improving capacity, the competition is set to intensify. 

JSW Cement is an unlisted company. In August 2020, the company announced the postponement of its IPO plans to December 2022, but the same has not been confirmed recently. 

Article by Aman Agarwal. 

This news piece is brought to you in association with jobaaj.com