JSW Cement Limited has officially approved a scheme of arrangement to merge with its listed subsidiary Shiva Cement, with the Board of Directors approving the merger on September 30, 2026. The transaction has an appointed date of April 1, 2026, and is expected to be completed within 12-14 months, subject to regulatory and shareholder approvals. The scheme involves reorganisation of reserves of both companies, with Shiva Cement ceasing to exist without being wound up once effective. The merger will create a 'single unified cement platform' and unlock operational, financial and management synergies, as stated in the company's latest announcement.
The proposed share exchange ratio remains five fully paid-up equity shares of JSW Cement (face value ₹10 each) for every 41 fully paid-up equity shares of Shiva Cement (face value ₹2 each). As reported by Business Standard, there will be no cash consideration under the scheme. 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. The merger aims to create synergies by pooling financial, managerial, technical, distribution, and marketing resources, with a primary driver being optimization of raw material procurement through Shiva Cement's clinker manufacturing facility in Sundargarh, Odisha, with a capacity of 1.32 mtpa. The scheme is subject to receipt of requisite approvals from stock exchanges, SEBI, NCLT, Odisha Industrial Infrastructure Development Corporation, and other statutory authorities.
According to Business Standard, the amalgamation is aimed at combining financial, managerial, technical, distribution, marketing and other resources of the two businesses. The merger will pool financial, managerial, technical, distribution and marketing resources to drive operational efficiency and allow backward integration through Shiva Cement's clinker facility, reducing dependence on external procurement. JSW Cement CEO Nilesh Narwekar emphasized that the merger will unlock operational and financial synergies, strengthen backward integration, and enable Shiva Cement's public shareholders to participate directly in the growth of a larger and more liquid listed entity. The consolidation is 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. The scheme will also result in right-sizing of financial statements of the companies involved, with Shiva Cement's accumulated losses represented by the opening debit balance of retained earnings being adjusted against its securities premium account. For JSW Cement, the Amalgamation Adjustment Deficit Account arising from the merger will be adjusted against its SPA, leaving the SPA at ₹4,335.67 crore.
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 as of March 31, 2026, and paid-up equity share capital at ₹59 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 and will be cancelled without allotment of new shares. JSW Cement currently holds a 66.23% stake in Shiva Cement, having acquired a 37% stake in January 2018 with a subsequent open offer. The proposed restructuring includes adjusting Shiva Cement's accumulated debit balance in Retained Earnings against its Securities Premium Account, with Shiva Cement's Retained Earnings likely to stand at negative ₹133.92 crore post-merger, while its SPA will be reduced to nil. JSW Cement shares were trading at ₹112.85 on BSE, up 0.22% from the previous close following the announcement.
