The scheme, approved subject to shareholder and regulatory approvals, will also involve reorganisation of reserves of both companies. Shiva Cement will cease to exist without being wound up once the scheme becomes effective.
JSW Cement currently holds 66.23% of the paid-up equity share capital of Shiva Cement. Under the proposed arrangement, the shares held by JSW Cement in Shiva Cement will be cancelled, with no JSW Cement shares issued against that holding.
The proposed share exchange ratio is five fully paid-up equity shares of JSW Cement, with a face value of ₹10 each, for every 41 fully paid-up equity shares of Shiva Cement, with a face value of ₹2 each. There will be no cash consideration under the scheme.
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The scheme has an appointed date of April 1, 2026. JSW Cement said the transaction is expected to be completed within 12–14 months, subject to timely receipt of regulatory approvals.
The approvals required include those from the stock exchanges, the Securities and Exchange Board of India (SEBI), the National Company Law Tribunal (NCLT), Odisha Industrial Infrastructure Development Corporation, other applicable statutory and regulatory authorities, and the shareholders and creditors of the respective companies, as may be required.
Why JSW Cement is merging Shiva Cement
According to the company, the amalgamation is aimed at combining financial, managerial, technical, distribution, marketing and other resources of the two businesses.
Shiva Cement operates a 1.32 million tonne per annum (MTPA) clinker manufacturing facility at Sundargarh, Odisha. JSW Cement said the merger would provide backward integration of clinker manufacturing with its cement business, reducing dependence on external procurement and associated third-party purchases.
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The company also expects the merger to improve funding arrangements, including greater ability to raise funds within a single entity, elimination of inter-company guarantees and more efficient funding.
The consolidation is also intended to simplify the corporate structure by reducing administrative duplication, regulatory and legal compliance, separate record-keeping, and efforts involved in consolidating financials at the group level.
Shareholding changes
Post-arrangement, JSW Cement’s promoter and promoter group holding is expected to decline from 72.02% to 71.39%, while public shareholding is expected to rise from 27.03% to 27.67%.
JSW Cement’s total equity shares are expected to increase from 136.34 crore to 137.55 crore. Shiva Cement has 29.50 crore equity shares, of which the promoter/promoter group holds 66.50% and public shareholders hold 33.50%.
The public shareholders of Shiva Cement, other than JSW Cement, will receive shares in JSW Cement under the proposed share exchange ratio.
Reserve restructuring
As part of the scheme, Shiva Cement’s accumulated losses represented by the opening debit balance of retained earnings will be adjusted against its securities premium account, to the extent of the available balance.
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Following the scheme, the debit balance of retained earnings in Shiva Cement is likely to be ₹133.92 crore, while its securities premium account is expected to be nil.
For JSW Cement, the amalgamation adjustment deficit account arising from the merger will be adjusted against its securities premium account. The deficit account is expected to be nil, while the securities premium account is likely to stand at ₹4,335.67 crore.
The company said there will be no consideration involved in the reserve reorganisations and no benefit to the promoter, promoter group or group companies from these restructuring measures.
Financial details of the two companies
For FY26, JSW Cement’s standalone turnover stood at ₹5,995.28 crore, with a net worth of ₹7,029.47 crore and paid-up equity share capital of ₹1,363.36 crore. Shiva Cement’s standalone turnover was ₹435.17 crore, while its net worth stood at negative ₹30.08 crore and paid-up equity share capital at ₹159 crore.
The entire paid-up optionally convertible cumulative redeemable preference share capital of Shiva Cement, comprising 1 crore shares with a face value of ₹100 each, is held by JSW Cement.
The merger is a related-party transaction as Shiva Cement is a subsidiary of JSW Cement. The company said the consideration under the scheme has been determined by independent registered valuers and a fairness opinion has been issued by an independent Category I merchant banker, making the transaction an arm’s-length arrangement.
JM Financial Ltd acted as the exclusive financial advisor to the transaction, while Price Waterhouse & Co LLP was the tax and regulatory advisor. PwC Business Consulting Services LLP and BDO Valuation Advisory LLP acted as independent registered valuers and provided the share exchange ratio report to the boards of JSW Cement and Shiva Cement.
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SBI Capital Markets Ltd and DAM Capital Advisors Ltd provided fairness opinions on the share exchange ratio to the boards of JSW Cement and Shiva Cement, respectively.
Nilesh Narwekar, CEO of JSW Cement, said, “The proposed merger is a strategic step towards creating a more integrated and efficient business. It will unlock operational and financial synergies, strengthen backward integration, and simplify our corporate structure. Importantly, it will enable Shiva Cement’s public shareholders to participate directly in the growth of a larger and more liquid listed entity.”
Shares of JSW Cement Ltd ended at ₹112.75, up by ₹0.20, or 0.18%, on the BSE.