JSW Steel is a long-term bet that needs many pieces to fall in place
₹65,000 crore, which will include a steel plant with a capacity of 13.2 MT, a captive power plant, captive jetties with cargo-handling capacity, a cement manufacturing unit, etc. Port facilities would considerably ease logistics. JSW is eyeing stakes in overseas coal mining operations.
There are reports that it is seeking a 20% stake in an Australian coal mine Blackwater, which is run by Whitehaven Coal. This could cost around $1 billion. JSW Group already has investments in Australia which give it access to two coal mines.
Other expansion plans include a ₹5,500 crore, grain-oriented electrical steel manufacturing facility through a joint venture with Japan’s JFE Steel Corp in Karnataka. Grain oriented steel is critical for grid applications since its used in transformers. In Q3FY24 , the company reported consolidated revenues of ₹41,940 crore and net profit of ₹2,415 crore, with sales volume at around 6 MT and production of 6.9 MT.
In FY23, it had logged consolidated revenues of ₹1.67 trillion. Fulfilling these capex plans will require at least ₹1 trillion, with the company reportedly seeking loans exceeding $750 million. JSW Steel shares have done well in the last year, as profitability has risen.
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