JSW Steel to seek shareholders' nod to raise Rs14,000 cr

JSW Steel will seek shareholders' approval to raise as much as Rs14,000 crore, partly through qualified institutional placement (QIP) and through sale of non-convertible debentures (NCDs).

The Sajjan Jindal-led company will seek approval of its shareholders to raise up to Rs4,000 crore through QIP and Rs10,000 crore through NCDs at its annual general meeting tomorrow.

The NCDs will be sold in one or more tranches during the current financial year on a private placement basis, the company said in its annual report

The funds so raised will be used for financing its ongoing brownfield expansion to reach 18 million tonnes per annum (mtpa) capacity by the end of financial year 2015-16.

A part of the funds will also be used to refinance expensive debt, to reduce interest costs and meet any unlikely shortfall in unforeseen circumstances, the company said.

JSW Steel has targeted 40 mtpa capacity by 2025 with significant investment in mineral resources like iron-ore and coal.

The NCDs will help the company optimize capital during expansion and facilitate future growth.

Jindal said much will also depend on government's policy support for the industry as the steel industry in the country is facing stiff competition from steel dumping into the domestic market.

Steel demand in the country grew by 3.1 per cent in financial year 2014-15, but imports of finished steel into India surged 71 per cent to 9.3 million tonnes during the year.

Countries like China, Russia, Japan and South Korea, which enjoy concessional rates of import duty for steel under FTAs and have access to cheap raw material, are effectively using the Indian market to dump their products, he added.