Sajjan Jindal’s Home Run With New Biz

SAJJAN JINDAL, chairman, JSW Group, aborted the idea of foraying into electric car manufacturing multiple times before the $24-billion group made a plunge in March this year. The billionaire was finally convinced that EV penetration would happen much faster than everybody thought, and JSW needed to acquire the platform and technology fast enough.

JSW Group, which has been in the B2B segment for almost three decades, entered the pure-play electric car manufacturing industry by picking up 51% stake in MG Motor India, a subsidiary of Chinese auto major SAIC Motor, along with a few Indian investors.

Soon after the deal, the carmaker made a unique offer to disrupt the EV market: It launched a subscription model that lowers the upfront cost of high-end EV to less than ₹10 lakh, a price point largely considered the sweet spot in the industry now. Recently, JSW MG Motor India announced all its EV models can be purchased under BaaS (battery as a service) model, under which one can buy an EV at a significantly lower price but will have to pay a running cost for the battery.

Meanwhile, the flagship steel business, which Jindal has been building since he was in his 30s, added over 10 million tonnes per annum (MTPA) capacity in the last three years. Besides greenfield expansions, JSW Steel acquired bankrupt companies Bhushan Power and Steel (BPSL) and Monnet Ispat in 2022, and increased the capacity to 28.2MT. It now plans to raise the capacity to 50MT by March 2031.

Higher capacity lends strength to financials. JSW Steel’s consolidated profit rose 116.8% year-on-year to ₹8,973 crore in FY24, while revenue went up 5.5% to ₹1.75 lakh crore. Another listed firm JSW Energy posted a 16.5% jump in net profit to ₹1,725 crore, on revenues of ₹11,941 crore. In October last year, group company JSW Infrastructure launched its IPO, mopping up ₹2,800-crore in an issue subscribed 37.37 times.

Passion For Steel

It was passion for steelmaking that drove the second son of industrialist and politician, late O.P. Jindal, to counter the might of the Tatas and the Mittals and build the country’s largest steel empire from scratch. In his three-decade journey, the 64-year-old faced many crises, including loan defaults. In 2000, the company defaulted on loans and went for corporate debt restructuring, but came out in five years. The second time when the steel sector collapsed after the 2008 global financial crisis, JSW Steel was better positioned and acquired sick assets such as Ispat Industries and Welspun Maxsteel. Later, it bought Essar and Bhushan’s steel assets when they went bankrupt.

But then steel alone cannot help the group multiply revenues four-five times, as targeted, by 2030. Hence, the forays into paints, cement, renewables energy and ports, besides emerging businesses such as EVs. In fact, Jindal considers power, ports, cement and paints as adjacencies. The group started an energy business to feed steel plants and later started selling surplus power in the market. The ports business (JSW Infrastructure), set up to help secure raw material for steel and ship-out finished goods, started doing business with third parties.

Acquisitions & Expansion

Much of JSW’s capacity expansion is driven inorganically. Besides acquiring Bhushan Power and Steel for ₹19,350 crore, it also bought Monnet Ispat and Energy (₹2,875 crore), flat-steel producer National Steel and Agro Industries (₹621 crore) and Asian Colour Coated Ispat (₹1,550 crore), in recent years. In March last year, JSW Energy acquired 1,753MW of renewable energy assets from Mytrah Energy.

JSW Vijayanagar Metallics Ltd. (JVML), a wholly owned subsidiary of JSW Steel, commissioned the hot strip mill facility in March 2024. Commercial production and sale have already begun. The 5MT integrated facility is expected to be commissioned by mid FY25. At Dolvi steel complex in Maharashtra, JSW Steel announced a capacity addition of 5MT, taking the total capacity to 15MT. BPSL’s expansion by 1.5MT to 5MT is expected to be completed by the end of Q3FY25.

The company expanded its product portfolio, introducing 51 new grades of steel, including 21 import substitution grades and 15 grades of advanced high strength steel, in FY24. “We received 48 new product approvals from our customers in FY24. These developments highlight our dedication to innovation and customer-centric solutions,” Sajjan Jindal says in the latest annual report.

Reducing carbon footprint is also on the group’s agenda. “In January 2024, we announced our commitment to achieving net neutrality in carbon emissions by 2050, significantly ahead of India’s net-zero commitments by 2070, through both short-term and long-term initiatives,” Jindal was quoted in the annual report.

The steelmaker is progressing on its energy transition journey, with planned addition of 600MW of solar and wind energy, combined with 320 MWh of battery storage. “This takes our renewable energy procurement to over 1.6GW. We also plan to establish a green steel manufacturing facility at one of our existing sites, initially at 2MT, expandable to 4MT,” says Jindal. The group aims to transform JSW Steel as one of the world’s largest green steel producers.

JSW Energy’s locked-in portfolio of 13.2GW comprises installed capacity of 7.2GW, under-construction capacity of 2.6GW and pipeline projects of 3.4GW. The locked-in capacity in energy storage stands at 3.4GWh, while in energy products and services, it is working on a 3,800 tonnes per annum green hydrogen plant.

Among other businesses, JSW Paints posted its first full-year operating profit at an EBITDA margin of more than 3% (₹67 crore) in FY24. The company’s gross revenues crossed the targeted ₹2,000 crore, growing 10x than the industry average, thanks to significant ramp-up in decorative and industrial coatings businesses.

JSW Cement, on the other hand, plans to increase grinding capacity to 40.85 MTPA from the current 20.60 MTPA and installed clinker capacity to 13.04 MTPA from 6.44 MTPA, according to the company’s IPO documents. It also wants to raise ₹4,000 crore through public offering of shares.