Synopsis: Jayaswal Neco Industries disclosed twin capital deployment moves this week aimed at structurally reducing power and raw material costs at its Chhattisgarh steel and mining operations.
Two concurrent capital announcements from a Nagpur-headquartered alloy steel maker brought the scrip into focus this week: the first involving captive solar power procurement through a minority equity stake in a Waaree Group-backed SPV, and the second a new pellet plant at its existing Raipur complex, committing Rs. 720 crore toward backward integration into a key steel feedstock.
With a market capitalization of Rs. 10,084.79 crore, the shares of Jayaswal Neco Industries Limited were trading at Rs. 103.86 per share. It was up by 13.54 percent from its previous closing price of Rs. 95.78 apiece. It is trading at a P/E of 20.08 times.
Jayaswal Neco executed a non-binding term sheet with a Waaree Group entity for an equity investment of approximately Rs. 40.97 crore in one or more SPVs to be incorporated for setting up a 104 MWAC (145.60 MWp) solar power project. The captive solar generation will supply power to the company’s Steel Plant Division in Raipur and its Chhotedongar Iron Ore Mines in Narayanpur District, Chhattisgarh.
In a separate board decision, Jayaswal Neco approved the setting up of a 1.5 million TPA Straight Grate Pellet Plant at Siltara, Raipur. Project cost is estimated at Rs. 720 crore, to be funded through Rs. 540 crore of debt and Rs. 180 crore from internal accruals.
Iron ore pellets feed the company’s blast furnace and direct-reduced iron operations; sourcing them captively eliminates external procurement exposure and smooths input cost through steel price cycles. JNIL has its own iron ore mines at Chhotedongar. The pellet plant would allow it to convert mine output directly into feedstock for the steel plant, completing the upstream integration loop.
Additionally, it was reported that the company is targeting a specialty steel production ramp from 18,000 TPA to 80,000 TPA by FY30, in alignment with its agreement under the Ministry of Steel’s Specialty Steel Production Incentive Scheme.
Business Overview
Jayaswal Neco Industries Limited is the flagship company of the NECO Group, incorporated in 1972 and headquartered in Nagpur. The company produces alloy steel long products; wire rods, bars, bright bars along with billets, sponge iron, pig iron, pellets, and iron and steel castings across its integrated steel plant at Raipur and foundry operations at Nagpur. It serves automotive, railways, defence, and infrastructure sectors.
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