In its quest to retain market share and increase steelmaking capacity to 40 million tonne by 2025, JSW Steel will investing $22 billion over the next decade, chairman Sajjan Jindal said.
Speaking at the company’s annual general meeting in Mumbai on Thursday, Jindal said his company would aim to retain the market share of 14-15% over the next decade. The company’s steel production in FY14 stood at 12.17 million tonne.
On the sidelines of the shareholders’ meet, Jindal also confirmed that JSW Steel was conducting due diligence on the assets of Welspun Maxsteel and may announce an acquisition in the next two months.
In June, there were reports that JSW Steel was looking to acquire Welspun Maxsteel for a consideration of around R1,100 crore. The acquisition was strategic for JSW Steel as Welspun was expected to supply raw materials such as sponge iron to JSW’s plants, which would help it cut down costs.
At that time, JSW Steel had said in a filing to the exchanges that while the company did not comment on market rumours, it would like to expand organically and inorganically. “In that perspective, we keep scanning suitable opportunities, which have a strategic fit.”
On July 23, Jindal had said that another group firm, JSW Energy, was looking to buy distressed power assets to supplement growth plans. JSW Energy has also received shareholders’ approval to raise R5,000 crore through a qualified institutional placement of shares.
It was recently reported that JSW Energy was looking to acquire a thermal power plant
from Lanco Infratech for around R6,000 crore.
Like other business leaders, Jindal also stated that the new government was expected to take steps to boost the domestic economy and that would, in turn, benefit the domestic steel sector. Jindal said that a stable government at the Centre would help usher in reforms, and strengthen governance.
“Housing and infrastructure creation are said to be key focus areas for the new government, and this augurs well for the steel sector outlook in India,” Jindal said.
In FY14, JSW Steel had revenues of R12,489 crore, up 4.4% year-on-year. It posted a net profit of R802 crore, up 23% from the previous year.
The stock closed at R1,179.80 on the BSE on Thursday, down 0.11%. The Sensex lost 0.74% to end at 25,894.97.