JSPL, under the leadership of Naveen Jindal, is said to be engaging in discussions to secure funding of around $3 billion from credit funds and foreign banks. This capital infusion aims to bolster promoter holdings and lay the groundwork for the company’s delisting. JSPL is touted as one of the steel manufacturers, in India exhibiting financial performance over the past few years.
Sources said that Jindal Steel and Power Ltd (JSPL), spearheaded by industrialist Naveen Jindal, is engaged in exploratory discussions with prominent global private credit funds and foreign banks to secure potential funding of up to $3 billion. These funds could potentially be employed to increase promoter holdings, as per insider information.
Insiders suggest that while these talks are still in the preliminary stages, the underlying objective is to potentially delist the company in the future. However, it remains equally plausible that the promoters may opt against increasing their stake beyond the existing level and instead explore potential delisting offers.
JSPL, an integral part of the OP Jindal group, stands as one of India’s largest steel manufacturers. The latest data indicates that the Jindal family currently holds a 61.2% stake, marking a 0.8 percentage point increase since the previous year’s June quarter.
Having benefited from the surge in steel prices in recent years, JSPL reported an impressive EBITDA of ₹15,513 crore in FY22. However, in FY23, the EBITDA moderated to ₹9,935 crore. Analysts at ICICI Direct anticipate that the company’s EBITDA for FY24 will amount to ₹11,687 crore.
With cash and bank balances amounting to ₹5,700 crores as of March 31 this year, JSPL has garnered investor appreciation for its recovery and focus on expansion within India. Over the past year, the company’s stock has witnessed a notable increase of approximately 82%, outperforming peers such as Tata Steel and JSW Steel, the latter being a part of Sajjan Jindal’s JSW Group.
JSPL concluded trading at ₹641.60 on the BSE last Friday. While JSPL has commanded the spotlight, the privately held enterprises of Naveen Jindal, a former Congress parliamentarian from Haryana, have also experienced expansion, culminating in an estimated EBITDA of around ₹6,000 crore in FY23.
In 2020, JSPL sold its Oman-based subsidiary, Jindal Shadeed Iron and Steel LLC, to Vulcan Steel, a company linked to Naveen Jindal, for a staggering enterprise value of $1 billion. Subsequently, Jindal Power, a company under JSPL, was sold to Worldone Private Ltd, another entity associated with Naveen Jindal, for ₹7,401 crore. Jindal Power boasts an installed thermal power capacity of 3,400 MW in Raigad.
The power company is currently engaged in rapid expansion plans, including nearly 2,000 MW of thermal power and 5,400 MW of hydropower projects in India, alongside 650 MW of thermal power assets in Africa. In 2021, Vulcan Minerals acquired the Moatize coal mine in Mozambique, along with a connected railway corridor, from Brazilian miner Vale for $270 million. The acquired asset now supplies coal to JSPL, a listed company.
Additionally, it is known that Jindal intends to establish substantial renewable energy assets through privately-owned entities. According to insiders, Jindal announced in March that his business group would be entering into an agreement with the Andhra government for investments in renewable energy.
