JSW Energy To Raise Rs 5,000 Cr Via IPO

Chennai: JSW Energy, the energy division of Rs 11,000-crore JSW Group, has decided to enter the capital markets to raise Rs 3,000-Rs 5,000 crore via an initial public offer by April 2008 to fund equity requirements for expansion. The group plans to invest Rs 12,000 crore in the energy sector in the next three years. The capex is part of the group's Rs 40,000 crore investment across sectors during the period. On the threshold of a major expansion blitz, the JSW Group, part of the $6-billion O P Jindal Group, will spend half of the total capex in the steel sector and the balance in the aluminium, cement and port sectors where the group is becoming active. Of the total investment corpus, Rs 25,000 crore will be funded through debt and the rest via internal accruals, Jindal said. For expansion in steel and power, JSW Group will utilise internal accruals of Rs 10,000 crore. With this, the O P Jindal group on the whole is looking at investing a mammoth Rs 80,000 crore on capacity expansion in various sectors over the next three years. In the steel sector, JSW will add three million tonnes per annum (mtpa) to its current capacity of four mtpa by 2008. The group company Southern Iron and Steel's (Siscol) integrated steel plant at Mechari, Tamil Nadu is poised for capacity upgadation. The group is also looking at setting up a 1,000 mw thermal power station in Tamil Nadu on an outlay of Rs 4,000 crore. Jindal said the Ennore port, with its new coal terminal under construction, would be an ideal site for the project, where capacity could be expanded to 2,000 mw when required. The project is likely to be operated by group subsidiary JSW Energy under a PPA with the Tamil Nadu government. The group is talking to the Tamil Nadu government for its various planned projects in the state, which include downstream raw material supply of iron ore from Kanchamalai in Salem and Tiruvannamalai district. Siscol will use iron ore deposits in these areas by putting up mining facilities and benefication plants at an investment of Rs 400 crore, and is awaiting clearance from the central and state forest departments. The projects will be spread over a total of 980 hectares and will generate direct and indirect employment for over 3,000 people. Additionally, JSW Steel will expand capacity at its Vijayanagar plant to 10 mtpa with the commissioning of a cold rolling mill to cater to automotive OEMs by 2010. The new capacity is expected to help JSW Steel foray into eastern Europe, Austria and Greece.