News Detail

<p style="text-align: justify;"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial">Jindal Steel and Power Ltd (JSPL) is redesigning its business strategy, shifting from merchant-power sales that it pioneered and profited from to long-term contracts, betting big on hydropower and taking an &quot;investment holiday&quot; in 2014-15 to reduce debts of the Naveen Jindal-controlled company, MD and Group Chief Executive Ravi Uppal.</span></span></span></p> <p style="text-align: justify;"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial">It is also eyeing electricity distribution business in partnership with a foreign firm and going for power purchase agreements (PPA) with state utilities for a steady and predictable flow of income unlike merchant sales which are risky and unsteady although companies have made a killing in the past.</span></span></span></p> <p style="text-align: justify;"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial">The company is betting big on 6,000 mw hydro power projects in Arunachal Pradesh as it faces uncertainty of fuel supply in thermal plants as the government has decided to cancel some of its coal blocks, while domestic fuel is scarce and imports are costly. It has also decided to participate in coal block auctions initiated by the government, Uppal said.</span></span></span></p> <p style="text-align: justify;"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial">JSPL has appointed a new management team at its recently acquired Gujarat NRE Coking Coal, which has two mines with over 650 million tons of coking coal in Australia, where it is listed. &quot;We are going to double our size in terms of power and steel production capacities in next financial year. However, year 2014-15 is practically going to be an &#39;investment holiday&#39; for us since we intend to bring down debt to improve our financial parameters,&quot; Uppal said.</span></span></span></p> <p style="text-align: justify;"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial">Last month, JSPL spent INR &nbsp;500 crore to buy back company&#39;s 5 per cent equity from the market, which showcased the promoters&#39; confidence in the company, he said. JSPL&#39;s revenues increased by 9 per cent to INR 19,806.78 crore while its net profit fell 14 per cent to INR 3,485.74 crore in 2012-13 as compared to the previous financial year.</span></span></span></p> <p style="text-align: justify;"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial">This week, the company commissioned a 600 mw unit of it Tamnar plant in Chhattisgarh, which will add two more similar units by March and one more later to take its capacity to 3,400 mw. &quot;Due to decreasing realisations from merchant plants and compulsion to sign firm PPAs to avail domestic coal, we are looking for tying up 80 per cent of our generation capacity for term contracts,&quot; said Uppal. He added that the company is executing close 500 mw of thermal power projects overseas and JSPL will sign its first PPA in the international market anytime soon,&quot; he said.<br /> Uppal, who is also working on the blueprint for company&#39;s entry into hydro power projects in Arunachal Pradesh, said that JSPL will start commencing its 23 mw pilot hydro power project as soon as it obtains desired clearances from authorities.</span></span></span></p> <p style="text-align: justify;"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial">JSPL is facing uncertain future as the inter-ministerial group recommended de-allocation of its Ramachandi Promotional and Gare Palma IV/6 coal blocks for failing to achieve certain milestones recently while it the company is already under the scanner of Central Bureau of Investigation for alleged irregularities in the allocation of Amarkonda Murugadangal coal block. </span></span></span></p> <p style="text-align: justify;"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial">Source-On Request</span></span></span></p>