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JSW Steel Ltd. Presentation to Analysts. Tornagallu (Bellary) 27 th March 2006. Contents. Group Highlights JSW Steel Rights Issue Project Status. Overview - O.P.Jindal Organization. O.P. Jindal. P R Jindal. Sajjan Jindal. Ratan Jindal. Naveen Jindal. Pipes. Carbon steel.
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JSW Steel Ltd.Presentation to Analysts Tornagallu (Bellary) 27th March 2006
Contents • Group Highlights • JSW Steel • Rights Issue • Project Status
Overview - O.P.Jindal Organization O.P. Jindal P R Jindal Sajjan Jindal Ratan Jindal Naveen Jindal Pipes Carbon steel Stainless steel Power & rail Jindal Saw Ltd. Jindal United Steel Inc. Saw Pipes Inc. JSW group • JSW Steel Ltd. • JSW Energy Ltd. • Southern Iron & Steel Co. Ltd. • South West Port Ltd. • JSW Aluminium Ltd. Jindal Stainless Ltd. Jindal Steel & Power Ltd.
O.P.Jindal Group - Highlights Revenues of over US$ 4 bn Assets over US$ 4.6 bn Employing over 20,000 people O. P. Jindal Group Diverse business interests • Steel & related • Power • Industrial gases • Ports Group ranked 548th by Forbes
JSW Group - Highlights Turnover over US$ 2 billion World’s largest air separation oxygen plant Employing over 9,000 people JSW group Known for growth and aggression - Turnover from US$ 22 mn to over US$ 2 bn in ten years Diversified business in steel, power, port and aluminium
JSW Steel - Capacity Million ton Capacity to increase from 2.5 to 7 mtpa in 3 years
Capex & Financing Plan • Upto 3.8 mtpa – Nearing completion • 3.8 to 7 mtpa – Rs. 6,150 crore: FinancingRs. in crore Equity / Internal accruals : 2550 Debt : 3600 Total : 6150
-Product Mix JSW Steel
JSW Steel • Turnover over $1.7 bn • Market share of 12% in the domestic market • Employee strength over 4000
JSW Steel - Key Strengths • Blend of 2 technologies - no petro fuel usage • Integrated from Iron Ore to galvanised and colour coated products • Proximity to sources of rich Iron Ore reserves - 30% captive Iron ore at 4 mtpa capacity
Sole producer of flat steel in southern region JSW Steel - Key Strengths • Waste utilisation up to 85% / Zero effluent discharge • Extremely environment friendly & socially responsible approach
JSW Steel - Key Strengths • Non unionised work force • Exports to over 50 countries • Long term tie ups with customer
Voltas Ltd. Supplies to 589 OEMs across India Shree Precoated Brakes India Tube Products of India Some Domestic Customers
Promoter Directors2 Executive Directors2 Lender Nominee Directors3 KSIIDC* Nominee Director1 Independent Directors5 JSW Steel - Management Structure Diversified Board & Management Structure Sajjan Jindal V C & M D Dr B.N. Singh JMD & CEO M.V.S. Rao Director (Finance) Board of Directors Audit, Remuneration, shareholders & investors grievance committees *Karnataka State Industrial & Investment Development Corporation
Independent directors from diverse fields : Mr. Anthony Pedder, an internationally renowned steel expert Dr. Vijay Kelkar, an eminent economist Mr. Sudipto Sarkar, a reputed lawyer Mr. Uday Chitale, a reputed Chartered Accountant Dr. S. K. Gupta, an acclaimed steel expert Effective Internal control system JSW Steel-Profile of Directors Sound corporate governance practices
JSW Steel 1 2 Financial highlights.. 3 4 5 6
JSW Steel - Financial Trends (Figures in Rs. Mn) CAGR 82% CAGR 76% CAGR 246% 16.6%
JSW Steel – Current Financials (Figures in Rs. Mn)
JSW Steel – Gearing Ratios Debt / equity EBIDTA / Interest
JSW Steel Going forward . . .
Volume growth, 7 mtpa by FY 2009 and 10 mtpa by FY 2011 Pellet capacity to 5 mtpa by FY 2007 Slab capacity to 3.9 mtpa by FY 2007 HR Coils capacity to 3.2 mtpa by FY 2008 CR products capacity to 1.8 mtpa by 2008 Colour coated capacity to 0.1 mtpa by FY JSW Steel - Strategy • Value added products increasing from 38% to 53% by 2008
JSW Steel - Strategy • Integration to reduce cost • Allocation of additional iron ore reserves • Investment opportunities in overseas Coal mines for Coal • Maintain gearing of 1 • Investment in cutting edge management practices • Innovation • Quality systems
JSW Steel - Challenges / Concerns • Delay in tying up further captive raw material source • Declining but yet relatively firm coal prices – valuation of coal mine • Meet the growth imperative at 1:1 debt equity • Talent retention
Fund raising upto Rs. 400 crs. (without warrants) Entitlement ratio on equity shares 1:8 Warrants entitlement of one Series A & one Series B warrant for every equity share offered on rights basis Warrant conversion period Series A : 18 - 36 months from allotment date Series B : 24 - 48 months from allotment date Rights-Broad Terms
The terms of warrants issue shall be decided by the committee of the Board Warrants to be listed on allotment and will be tradable Rights-Broad Terms
Up to 3.8 mtpa Expansion - Project Status Commissioning to be completed by June 2006
Upto 7 mtpa Expansion - Status • Financial closure: - In principle approvals in place • Orders placed: • Blast furnace of capacity 4019 M3 (Largest in India) • Land leveling started: • Blast furnace • BOF and CCP
Key ratios *Market value per share is as on 24th March 2006 for all the calculations, wherever required All figures annualised wherever necessary