JSW Steel Ltd.’s quarterly profit tumbled as demand for the alloy fell amid disruptions caused by the coronavirus pandemic, and overseas subsidiaries continued to suffer losses.
Fundraising Plans
The company’s board of directors have approved raising as much as Rs 14,000 crore through:
- Non-convertible debentures for an amount not exceeding Rs 7,000 crore.
- Equity shares and/or convertible securities (other than warrants) for an amount not exceeding Rs 7,000 crore.
Higher Leverage
The company’s debt-to-Ebitda ratio rose to 4.5 times—higher than 3.71 times in December 2019 and its guidance of 3.75 times. The company said on a post-earnings call that the ratio is expected to remain at 4.5 times during FY21.
Capex Guidance
JSW Steel not only failed to meet its capex guidance for FY20, but it also slashed its guidance for FY21.
- JSW Steel spent Rs 10, 200 crore compared with earmarked capex of Rs 11,000 crore.
- In October 2019, JSW Steel revised its FY20 planned capex to Rs 11, 000 crore vs Rs 15,700 crore announced in May 2019
- Reduces capex for FY21 to Rs 9,000 crore from earlier guidance of Rs 16,340 crore
Project Updates
- Expansion of crude steel capacity at Dolvi plant in Maharashtra from 5 MTPA (million tonnes per annum) to 10 MTPA along with captive power plant and coke oven (Phase 2) likely to get delayed into the second half of FY21.
- 8 MTPA pellet plant and wire rod mill at Vijayanagar in Karnataka expected to be commissioned in Q1 of FY21.
- CRM1 complex capacity expansion at Vijayanagar from 0.85 MTPA to 1.8 MTPA expected to be commissioned progressively in Q2 and Q3 of FY21.
- Downstream modernisation-cum-capacity enhancement projects at Tarapur expected to be commissioned in second half of FY21.
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