Steel producer JSPL plans to invest Rs 18,000 crore to increase its Angul steel capacity to 12 million tonnes (mt) by 2023. 2025 ”, said JSPL, VR General Manager Sharma, at the Telegraph.

He said the expansion would be achieved through internal accumulations. The expansion plan for 15 mt envisions a 4.25 mt blast furnace, 2.7 mt of direct reduction iron and 6.3 mt of steel smelting shop, replicating Angul’s current facilities.

The company will take 30 months (December 2023) to commission the blast furnace, followed by the direct reduction cast iron plant, which is scheduled to be commissioned in February 2025.

These projects as well as the related raw material capacities – coke oven, oxygen plant – will represent nearly two thirds of the planned capital expenditure of Rs 18,000 crore.

Debt reduction

Sharma said firming steel prices have allowed JSPL to repay debts and helped with expansion plans, adding that the company will be debt-free from July.

Consolidated net debt fell to Rs 11,164 crore in the second quarter ended September, from Rs 15,227 crore in June. During the second quarter of the year, finance costs decreased by 31% on an annual basis.

The focus on strengthening its balance sheet resulted in a drop in net debt of Rs 35,350 crore from a peak of Rs 46,500 crore. sale on his books.

“JSPL becomes the first entity to have no net domestic debt in our Indian steel coverage. Current net debt of Rs 11,200 core can be attributed to foreign operations. With the divestiture of Jindal Power, management appears to be free of its net debt by 2022-2023 – a very likely scenario, ”ICICI Securities said in a research note.

The country’s finished steel consumption rose 7.57 million tonnes in September, down 4% on an annual basis but 5.4% more per month. Steel consumption increased sharply in the first half to 48.95 Mt against 36.54 Mt a year ago.

While demand from the white and yellow goods industries has weakened in recent months due to rising steel prices and limited supply of components, increased government investment, including programs such that Make in India and government projects, has given a boost to the growth of construction and infrastructure. sectors.

Infrastructure, construction, automobiles, real estate and pipelines account for around 65% of domestic demand. National consumption of steel finished in the third quarter is expected to be sequentially higher with the end of the monsoon season and improved vaccination rates, according to India Ratings and Research.

Domestic spreads for flat and long products are expected to correct in the second half of the year due to higher coking coal prices. This will be partially offset by the increase in steel prices over the past month, he added.