Jindal Stainless Announces ₹5,400 Crore Expansion Plans for Domestic and International Markets

Jindal Stainless, India's largest stainless steel manufacturer, has announced plans to invest ₹5,400 crore over the next three years, aiming for a significant capacity expansion both domestically and internationally. The company's goal is to increase its annual production capacity by 40% to 4.2 million tonnes.

As part of the expansion, Jindal Stainless will invest ₹1,340 crore to acquire a 54% controlling stake in Chromeni Steels Pvt Ltd in Mundra, Gujarat. The stake is currently held by China’s Eternal Tsingshan Group, the world’s largest stainless steel maker. Of the total amount, ₹1,295 crore will be used to cover Chromeni's debt, with an additional ₹45 crore for the equity purchase. This acquisition will reactivate Chromeni's 0.6-mtpa facility, which has been closed since the pandemic. The facility is expected to be operational within six months following a capital investment of ₹100 crore.

Abhyuday Jindal, Managing Director of Jindal Stainless, stated that the company's existing debt stands at around ₹4,800 crore. With the new acquisition, an additional ₹300-500 crore in debt may be on-boarded in the first fiscal year (FY25). The Mundra facility, once operational, has the potential to serve as an export hub.

Additionally, Jindal Stainless will invest ₹700 crore in a joint venture with Zenith International Capital Pte Ltd, a Singapore-based company with ties to Eternal Tsingshan Group. This joint venture will establish a steel-melting shop in Indonesia, providing Jindal Stainless with a secure source of raw materials. The Indonesian facility is expected to become operational within two years, with its products potentially being used at Jindal Stainless' Jajpur facility in Odisha.

An additional ₹1,900 crore will be invested in expanding the downstream facilities at Jajpur, while another ₹1,450 crore will be allocated for infrastructure enhancements, including road re-laying.

Regarding the source of funding, Jindal stated that approximately 90% of the investments will come from internal accruals, with debt addition primarily for the Chromeni acquisition. Exports, accounting for around 15% of Jindal's turnover, are targeted at Europe and the US, where demand is expected to improve. However, Jindal cautioned that shipping costs remain elevated due to the ongoing Red Sea crisis.

Looking ahead, Jindal said that trends for the first quarter of FY25 are promising, with further improvement expected in the second quarter. This expansion marks a significant step in Jindal Stainless' growth trajectory, solidifying its position in the stainless steel industry both in India and abroad.

HBL