JSL charts Rs 5,400 crore strategic investment plan

Jindal Stainless Limited (JSL) Wednesday announced a Rs 5,400 crore investment plan to expanding its capacity by 1.2 million tonnes per annum (MTPA) to 4.2 MTPA. The company will be taking over Chinese stake in a Gujarat based steel mill, expanding its own capacity in Jajpur (Odisha), and setting up capacity in Indonesia through a joint venture (JV).

The company plans to fund the capacity addition a mix of internal accruals and a small component of debt, Abhyuday Jindal, JSL's Managing Director told reporters.

"The Indonesian JV will get us the best of speed and raw material security, and the augmentation of the Jajpur lines will offer enhanced value for domestic and export customers. The cold rolling mill at Chromeni will expand our outreach, both in India as well as abroad, and strengthen our presence in the value-added segment in the long term," he said.



The company currently had a debt of Rs 4,800 crore that would go up by about Rs 300-500 crore by end of current fiscal in view of the expansion plan.

JSL said it will be developing and operating a stainless steel melt shop (SMS) in Indonesia with an annual production capacity of 1.2 MTPA. This will increase the company’s melting capacity by over 40% to 4.2 MTPA at a Rs 700 crore investment. This investment will be made through Jindal Stainless' Singapore based subsidiary which will enter into Joint Venture (JV) with Zenith International Capital Pte. Ltd, to operate the SMS in Indonesia.

Zenith International Capital is allied with China's Tsingshan Holdings Group which is the world's largest producer of stainless steel.

JSL also said it will acquire a 54% equity stake of Tsingshan Holdings in Chromeni Steels Private Limited (CSPL), which owns a 0.6 MTPA cold rolling mill in Mundra, Gujarat.

This will be through a Rs 1,340 crore structured indirect acquisition deal deal which comprises takeover of existing debt of Rs 1,295 crore and balance of Rs 45 crore towards equity purchase. CSPL has not been operational after COVID-19.

"Restarting the project will require around Rs 100 crore investment. The Rs 1,295 crore debt will be paid upfront," Jindal said.

In addition to these, JSL said it plans to invest Rs 1,900 crore for the expansion of its downstream lines in Jajpur, Odisha, to be able to process an increase in melting capacity. Besides, the company also earmarked nearly Rs 1,450 crore towards the associated upgradation of infrastructural facilities, such as railway siding, sustainability-related projects, and renewable energy generation.