Jindal Stainless, the country’s largest stainless steel maker, will invest ₹5,400 crore over the next three years as it looks at a 40 per cent ramp-up in capacities to 4.2 million tonnes per annum (mtpa). 

According to Abhyuday Jindal, Managing Director, Jindal Stainless, around ₹1,340 crore will be towards acquisition of Chromeni Steels Pvt Ltd at Mundra in Gujarat. Jindal Stainless will pick up a 54 per cent controlling stake that currently belongs to China’s Eternal Tsingshan Group, the world’s largest stainless steel maker. 

Jindal Stainless will make an upfront payment of ₹1,295 crore for the debt, and the balance ₹45 crore towards equity purchase. The 0.6-mtpa facility, now closed, will be operational in another six months with the company making a capital investment of ₹100 crore. 

Production at Chromeni was stopped during Covid.

“So in the first year (FY25), there will be some on-boarding of additional debt by ₹300-500 crore. This is because we are taking over the debt of Chromeni,” he said. Existing debt for Jindal Stainless is around ₹4,800 crore. 

The Mundra facility can be further leveraged as an export unit, he said. 

JV in Indonesia 

This apart, investments worth ₹700 crore will be for a JV for upstream facilities in Indonesia. Jindal Stainless’ Singapore-based subsidiary will enter into JV with Zenith International Capital Pte Ltd, Singapore, to operate the steel-melting shop. Zenith International has links to Eternal Tsingshan Group. 

Jindal Stainless will have the first right of refusal for products from the Indonesian JV . 

“The Indonesia facility is expected to be on-stream in two years. And offerings from there can be used for further processing at our Jajpur facility in Odisha,” Jindal said, adding, “The Indonesian JV will get us raw material security too.” 

According to him, augmentation of the Jajpur lines will offer enhanced value for domestic and export customers. 

Another ₹1,900-crore investment is expected across downstream facilities at Jajpur in Odisha and another ₹1,450 crore for infra addition there that include road re-laying and so on.

According to Jindal, “nearly 90 per cent of the investments” will be from internal accruals. And debt addition will be primarily for the acquisition.  

Improving exports 

Exports account for around 15 per cent of Jindal’s turnover, with primary markets being Europe and the US. “We are witnessing some improvement in demand across pockets of Europe, which include Germany, France, Italy, Poland and Spain. Some improvement is there in the US too,” he said. 

Jindal said trends for Q1 (April-June) FY25 orders “are good” and “further improvements are expected in Q2”.

He added, “However, shipping costs continue to be elevated because of the ongoing Red Sea crisis.”