JSW Group Plans $70 Billion Investment Over Six Years, Says Parth Jindal

Tanushree Jaiswal Tanushree Jaiswal

Last Updated: 13th June 2024 - 05:43 pm

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The JSW Group, under the leadership of billionaire Sajjan Jindal, has unveiled an ambitious strategy to allocate as much as $70 billion over the upcoming six years. This substantial investment will cover a range of business sectors, such as steel, cement, paints, renewable energy, infrastructure, and automobiles, among others.

In an exclusive interview with Moneycontrol, Parth Jindal, the Managing Director of JSW Cements and JSW Paints, provided insights into the group's strategic resource allocation. "Of this, the highest allocation will be towards our energy business," he stated, highlighting the group's focus on expanding its renewable energy portfolio.

To accomplish this, the JSW Group intends to use a combination of new equity, debt, and internal accruals. "We will fund this through a combination of fresh equity, debt, and internal accruals to meet the committed investment target," Parth Jindal explained.

Besides the planned investments, the JSW Group has set aside additional funds specifically for its newly established automobile business. "Our investments in the auto business will be over and above this," Jindal added, indicating the group's commitment to bolstering its presence in the automotive sector.

In March of this year, the JSW Group entered into a joint venture agreement with MG Motor India, owned by China's SAIC Motor, to produce electric and hybrid vehicles for the Indian market. In this venture, the JSW Group holds a 35% stake, while the remaining 65% is divided among SAIC, which owns 49%, private equity fund Everstone Capital, and a group of dealers. Additionally, the JSW Group is investing ₹40,000 crore to create an integrated EV facility in Odisha.

Buoyed by India's rapidly growing economy, some of the country's largest conglomerates are planning substantial investments, particularly in emerging sectors like green energy and semiconductors. The Adani Group, with interests in infrastructure, power, and new energy, has announced investments totaling $90 billion over the next decade. Similarly, the Tata Group has committed up to $90 billion in the coming years as it significantly expands into semiconductor and electronics manufacturing.

Notably, JSW Energy is establishing India's largest 25-megawatt green hydrogen project in Vijayanagar, Karnataka. This initiative aims to enable its flagship company, JSW Steel Ltd., to produce green steel. “The work on the project has started, and we will be commissioned by the fourth quarter of fiscal 2025,” Jindal said. “The company has also received 6.8 thousand tons of capacity per year from the Solar Energy Corp. of India (SECI) under the Strategic Interventions for Green Hydrogen Transition program,” he added.

“In JSW Energy, we recently raised $600 million from a clutch of marquee global investors. We will continue to invest in growing our renewable energy portfolio,” he said.

Jindal affirmed that the group will persist in investing in the paints business. The paint-maker achieved operational profitability for the first time in the 2023-24 fiscal year (April-March), with operating margins exceeding 3%. The company surpassed ₹2,000 crore in revenue during this period and is now aiming for ₹5,000 crore in revenue by FY26. “Despite the competitive intensity, we have continued to grow, and we expect the momentum to keep going up as more efficiencies kick in. We expect our margins to match the industry’s top players,” Jindal said.

"We expect to generate enough cash to meet most of the requirements, but we are open to exploring strategic opportunities for divestment,” Jindal said, adding, “For instance, in the newly listed JSW Infra, where we own more than 85%, we will have to mandatorily divest our stake to comply with SEBI regulations once the lock-in period ends. Likewise, we will explore opportunities in other businesses if the need arises; however, there are no immediate plans to do so.”

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