JSW Steel plans rights issue to raise Rs 19,000 crore
JSW Steel plans to launch a rights issue to raise Rs 5,000 crore and another Rs 14,000 crore in the form of debt and equity-linked issues.
Taking advantage of the runway rally in the stock prices which followed an unprecedented margin for the producers of the alloy, the Sajjan Jindal-led company will seek shareholders’ approval to issue non-convertible debentures with warrants convertible into shares and qualified institutional placements, apart from the rights issue.
The JSW scrip has risen 310.95 per cent in one year, gaining as much as 76.4 per cent in the last three months alone, preparing the ground for a share flotation. The stock closed at Rs 698.20 on Friday, up Rs 3.7 a share.
The fund raise is expected to lend support to JSW’s aggressive expansion plans and bold acquisitions it recently concluded.
The company said it would spend Rs 15,000 crore over the next three years to put up an additional capacity of 5 million tonnes. Once completed, Vijaynagar in Karnataka would become the largest single-site steel mill in India with 17mt capacity.
JSW has also earmarked Rs 3,450 crore to enhance mining capabilities and efficiencies in Odisha where it has won rights to four iron ore mines in auctions in February 2020. Own mines now contribute 42 per cent of JSW’s total requirement.
While announcing the new capex plan, the company said the commission of the expanded capacity at Dolvi from 5 million tonnes (mt) to 10mt would be impacted by the ongoing Covid disruptions. JSW now expects full integrated operations by September 2021. It has guided 1.4mt of additional capacity in 2021-22.
Overall, the company has guided for 22.94mt production and 21.63mt in sales in this fiscal after taking into account companies under joint control such as Bhushan Power & Steel Ltd.