Jindal Stainless Unveils ₹5,400 Crore Expansion Strategy

On May 1, 2024, Jindal Stainless announced major expansion and acquisition plans to increase its melting and downstream capacities and become one of the largest stainless steel producers globally. The company also revealed a three-pronged investment strategy worth nearly ₹5,400 crore to achieve global leadership in stainless steel.

The company stated that it entered into a joint venture (JV) to develop and operate a stainless steel melt shop (SMS) in Indonesia with an annual production capacity of 1.2 million tonnes per annum (MTPA). This will expand the company’s melting capacity by more than 40% to 4.2 MTPA at an investment of over ₹700 crore.

Also, Jindal Stainless set aside around ₹1,900 crore to expand its downstream lines in Jajpur, Odisha, to accelerate melting capacity expansion. Further, the company committed nearly ₹1,450 crore to upgrade infrastructural facilities, which includes railway siding, renewable energy generation and sustainability-related projects.

Next, Jindal Stainless will acquire a 54% equity stake in Chromeni Steels Private Limited (CSPL), which owns a 0.6 MTPA cold rolling mill in Mundra, Gujarat, via a structured indirect acquisition deal. The transactions entail an outlay of around ₹1,340 crore, which comprises a takeover of existing debt of approximately ₹1,295 crore and a balance of about ₹45 crore towards equity purchase.

Regarding the Indonesian SMS, the company added that the partner company is of international repute and has vast experience running such projects. The downstream expansion in Jajpur and the acquisition of CSPL are aligned with the Indonesian SMS capacity. This will support Jindal Stainless’s overall facility balance at the company level. The improvement in the infrastructural facility will greatly improve the efficiency in logistics needed to cater to increased planned volumes.

The company stated that these landmark decisions are approved by the Board of Directors of Jindal Stainless.

The Managing Director of Jindal Stainless, Mr Abhyuday Jindal, said, “With these acquisitions and investments, we have orchestrated a clear growth plan to become one of the leading players in the world. 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.”

On May 2, 2024, the share price of Jindal Stainless Ltd opened at ₹724.95, touching the day’s high at ₹731.20, as of 10:07 AM on the NSE.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.