JSW in talks to buy Lafarge, Jaypee Group’s cement assets

Billionaire Sajjan Jindal-led $11 billion JSW Group is in talks with LafargeHolcim to acquire its Indian unit Lafarge India with 11 mtpa cement capacity at enterprise valuation of Rs.10,000 crore and another 22 mtpa of Jaypee Group's cement assets at a valuation of Rs.20,000 crore.

In talks Manoj Gaur  & Sajjan Jindal

If these deals goes through, JSW Group will emerge as India’s third largest cement maker with combined capacity of 39 mtpa, just after Kumar Mangalam Birla-led UltraTech with capacity of 72 mtpa and global giant LafargeHolcim with Indian capacity of 63 mtpa after divestment of Lafarge India.

According to the newspaper ‘The Hindu’  Mr. Sajjan Jindal, Chairman, JSW Group told The Hindu: That they are definitely looking at buying Lafarge India. Lafarge has just received CCI approval for the divestments. The company is also looking at other cement assets.

Mr. Jindal is also learnt to have met Jaypee Group Executive Chairman and CEO, Manoj Gaur, for buying out Jaypee Group’s portfolio of 22 mtpa of cement assets. The valuation of Jaypee assets is said to be Rs.20,000 crore, according to bankers familiar with the development.

LafargeHolcim said that it has received a revised order of the Competition Commission of India (CCI) for the divestment of its interest in Lafarge India, including three cement plants and two grinding stations with a total capacity of around 11 million tons per annum.

According to LafargeHolcim, the proposed transaction is an alternate remedy for the merger of the group’s legacy companies and now forms part of the company’s CHF 3.5 billion divestment target in 2016.

A conditional clearance by the CCI for an earlier divestment proposal was received in April 2015 for the divestment of Jojobera and Sonadih plants in Eastern India with a cement capacity of 5.1 million tonnes. LafargeHolcim subsequently entered into an agreement with Birla Corporation Limited, subject to CCI approval, in August 2015. However, due to the current regulatory issues relating to the transfer of mining rights captive and critical to the two plants, the deal fell through and LafargeHolcim had to come out with an alternate remedy to the CCI to ensure compliance with the order. As a result, LafargeHolcim will now begin a new divestment process for Lafarge India.

However, analysts are not very positive about JSW potential to pull both the acquisitions due to its high amount of debts.

JSW Group under leadership of Sajjan Jindal has become very ambitious off late. They have become India’s largest steel maker but in the process have debts of Rs.40,000 crore. Recently, JSW acquires 41.29% stake in Ispat Industries for Rs. 2157cr.

Consolidating could be helpful for the country, it will insure more wealth and new jobs creation. 63moons a new venture is investing on entrepreneurs which will aid PM Modi's Make In India campaign. 

4 Reliable Ways To Fund A Start-Up

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The majority of startup ideas get stuck at funding. At the end of the day, capital is highly important. It is like the lifeline for the entrepreneur. Whatever revolutionary the business idea may be, it can’t be brought into the reality without finance. Particularly, in India the situation is different. Entrepreneurs still rely on the conventional methods. The concepts of angel funding Mumbai, or seed funding Mumbai, are still in the beginning stage. When the right source of money is tapped, it is possible to take the business to towering heights. Smart entrepreneurs do it rightly in the first attempt.

Compare all sources

When you want to start a business venture, always look at every possibility of raising funds. Do not leave any stone unturned because you don’t know where is the key to success? Be careful while choosing one as a wrong decision may take you to square one. Mentors suggest a few useful sources to entrepreneurs in Mumbai.

·        Bank loan or credit: You should have a clean and creditable history before you move ahead with this option. You may get funding easily if everything is fair and positive. However, things are not that simple if the credit history is not spotless.

 Search for startup incubators in Mumbai: Many people prefer incubators or accelerators who offer funds to startup companies. They are associated with organizations that work for community development. Even big business groups also provide it. They offer free of charge (or at nominal charge) resources, consultation, and office setup. Some offer seed funding as well.

·         Find out Mumbai angel network for funding: Nowadays, several groups of individuals offer startup support to entrepreneurs. These investors are generally big business owners who form a syndicate and build a huge corpus for funding new ventures. However, it is very much important that you find the right group and showcase your business plan effectively.

• Self-finance your business: If you are an established entrepreneur and starting up a new venture, then diverting funds from another business is a good idea. The government offers tax benefits to such business ventures, e.g. excise duty or sales tax is levied for a limited time.

Funding a startup is not rocket science if you follow the right path. Detailed analysis crystals down two or three right choices for you. Select the one that fulfills your needs to the most.