Jindal Steel Opens Capex Window

Having reduced its debt considerably over the last few quarters, Naveen Jindal-led Jindal Steel & Power (JSPL) plans to deploy its cash generated for doubling of capex—an option it had shut itself to on account of strong deleveraging focus. “With company’s consoli

BY Realty Plus
Published - Saturday, 15 May, 2021

Having reduced its debt considerably over the last few quarters, Naveen Jindal-led Jindal Steel & Power (JSPL) plans to deploy its cash generated for doubling of capex—an option it had shut itself to on account of strong deleveraging focus. “With company’s consolidated net debt having come down to a comfortable position at Rs 19,700 crore after the recent pre-payment, we are now looking to double capacity mainly via internal accruals. Our deleveraging strategy will continue and, in fact, another pre-payment is being planned for October. Our aim is to bring the debt level below Rs 15,000 crore for FY22. For this, we are very much on track,” said said VR Sharma, Managing Director at JSPL. Jindal Steel, over the last few quarters, has lowered its debt by over Rs 20,000 crore from a debt level of Rs 45,900 crore as on March 31, 2017. Meanwhile, the company’s plan to double capacity to 12 million tonne via the brownfield route at Angul in Odisha looks cautious. The company plans to tread on this next phase of growth in a measured way by not deviating from the two key guard rails, with keeping Net Debt/EBITDA below 1.5x during all times and keeping sustainability - of financial and ESG (Environmental Social Governance) matrices - at the forefront, said the company release. In the March quarter, JSPL’s consolidated net sales almost doubled because of strong volumes coupled with attractive realisations. “Nearly, 80 per cent of our business is in structural steel where there is no competition and hence see no threat to losing market share to anyone. Even if prices fall, input costs will also correct and so to that extent we do not see margins getting impacted,” explained Sharma.