Jindal Stainless announces Rs 5,400 crore capacity expansion plan

Jindal Stainless has announced capacity expansion worth Rs 5,400 crore, signalling its intent to emerge as one of the world's largest stainless steel producers.

Jindal Stainless has entered into a joint venture (JV) agreement to develop and operate stainless steel melt shop (SMS) in Indonesia. The joint venture, with an annual production capacity of 1.2 million tonnes per annum (MTPA), represents a step towards augmenting the company's melting capacity. The investment in this venture exceeds Rs 700 crore and is expected to increase Jindal Stainless's melting capacity by over 40 per cent, reaching a total of 4.2 MTPA.

In addition to the Indonesian venture, Jindal Stainless has allocated approximately Rs 1,900 crore for the expansion of downstream lines at its facility in Jajpur, Odisha. The investment aims to enhance the company's processing capabilities to accommodate the increased melting capacity resulting from the SMS joint venture.

Moreover, Jindal Stainless has earmarked nearly Rs 1,450 crore for the associated upgradation of infrastructural facilities. These enhancements include investments in railway siding, sustainability-related projects, and the development of renewable energy generation capabilities.

Furthermore, as part of its expansion strategy, Jindal Stainless will acquire a 54% equity stake in Chromeni Steels Private Limited (CSPL), which owns a 0.6 MTPA cold rolling mill situated in Mundra, Gujarat. The acquisition, structured as an indirect deal, entails an outlay of approximately Rs 1,340 crore. This includes the takeover of existing debt amounting to around Rs 1,295 crore, with the remaining funds allocated towards equity purchase.

“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,” said Abhyuday Jindal, Managing Director, Jindal Stainless.

Jindal Stainless shares ended 1 per cent higher at Rs 706.90 a day ahead of capex announcement.