JSPL - Expansion At Angul In Full Swing; Volume Growth Remains Robust, Deleveraging To Continue: IDBI Capital
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IDBI Capital Report
We visited Jindal Steel and Power Ltd.’s Angul steel plant in Odisha and interacted with employees. The company’s current capacity at Angul is 5 million tonnes per annum which is likely to increase to 6 mtpa by end of FY22 and further to 12 mtpa (phase-II) by FY25.
JSPL has land of 5,000 acres at Angul where it can expand capacity upto 30 mtpa via brownfield expansions – this, alongside its strong balance sheet provides expansion opportunities over the coming five-10 years.
Its Angul phase-II expansion is proposed at a modest capex of $400/tonne which is among the lowest in the industry.
The projects, which are expected to increase steel capacity by 66% and pellet by 133%, will be commissioned gradually from September 2022 to February 2025 and will be largely funded by internal cash flows.
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