JSW Group To Invest Rs 7,000 Crore On Ports By 2020
The group looks to sell up to 15% in JSW Infrastructure before taking it public.
Industrialist Sajjan Jindal on Saturday said his JSW Group will invest Rs 7,000 crore more in the ports sector over next three years to create assets in the country as well as abroad. The company is also looking at diluting up to 15 percent stake in the ports operating company, JSW Infrastructure, to a private equity player soon, and take it public by 2019.
“We will be investing Rs 9,000 crore more in the ports sector till 2020 (including the Rs 2000 crore already invested),” he told reporters at JSW Infrastructure-run flagship port in Ratnagiri district.
The company has invested Rs 2,000 crore in the project at Jaigad and the overall investment plan for the company includes another Rs 2,000 crore for capacity expansion in Jaigarh, Jindal said. Of the remaining Rs 5,000 crore of investments, Jindal said the company is looking at putting up four berths in Paradip that will have a 50 million tonnes per annum (mtpa) capacity and a greenfield project in Fujairah in the UAE.
The Rs 4,000-crore Jaigarh Port project has a capacity of 40 mtpa now, which will be doubled by 2020 and raised further to 125 mtpa by 2025, he said. At the company level, total capacity target is 200 mtpa by 2020, Jindal said, adding the port now handles dry bulk cargo but has plans to enter container handling.
One of the biggest opportunities that the port is eyeing is the proposed public sector mega refinery by Indian Oil Corporate Ltd., Hindustan Petroleum Corporation Ltd. and Bharat Petroleum Corporation Ltd. in the Konkan belt of Maharashtra, even though the exact location is not finalised yet.
Jindal said JSW is “pitching” to act as a “captive port” for the proposed refinery project which will host the very large carriers to ferry in crude, and also ships to evacuate refined products.
The JSW group has tied up with the Hiranandani Group, which is investing up to Rs 4,000 crore to construct an LNG terminal at the Jaigad Port and then evacuate the cargo through a dedicated pipeline that will be connected with GAIL India Ltd.’s pipeline at Dabhol. Ratnagiri Gas & Power (formerly Dabhol Power) does the same work already, but Jindal is confident that the growing market will ensure there are opportunities for all.
The JSW Group is also looking at sites in the Palghar district which is north of Mumbai, to build a greenfield port, Jindal said, without specifying the details. Jindal said the Palghar project will be independent and not part of the Wadhawan Port being developed by the Centre and the state.
He said the company, which primarily handles captive cargo for group companies, had a turnover of Rs 4,000 crore and a pretax profit of Rs 800 crore in last financial year.
JSW Infrastructure is fully owned by the Jindal family now and is looking at first diluting up to 15 percent before launching an IPO, Jindal said. It has decided on milestones before it going public, he added, specifying that a capacity of utilisation of 100 mtpa is essential before it goes public, which at present is around 30 mtpa. The 100 mtpa target can be achieved by 2019 and will be jacked up further to 140 mtpa by 2020, he said. The total debt of the company stands at Rs 1,500 crore at present.
With a focus on port connectivity, the company has invested Rs 50 crore on a 42-km road link with the National Highway 17, which was inaugurated on Saturday.
The company also laid the foundation stone for a 34-km rail link between Jaigad and Digni on the Konkan Railway route, which includes 18-km of routes passing through tunnels.
Jindal said establishing rail connectivity between Chiplun and Karad on the Deccan Plateau being carried out by the government now will enhance the port's addressable hinterland.