Q&A: Sajjan Jindal, Vice-Chairman & MD, JSW Steel

Sajjan Jindal’s JSW Steel will soon have a new strategic investor on its board. So, what would JFE bring to the table other than the Rs 5700-crore cash that will help JSW Steel deleverage its balance sheet? Jindal spoke to Abhineet Kumar & Arijit Barman about the deal dynamics. Edited excerpts:

The decision to dilute a substantial equity to a strategic investor would have been tough. How did you reach such a decision?
Certainly, I asked questions to myself. I discussed this with my family; I discussed this with the company’s board. After a lot of thinking, this decision has been taken. We are the largest shareholder in the company. Any thing that is good for the company is good for us. And nevertheless, we still own 40 per cent in the company. So, I don’t see any real reason to get worried about.

Do you see JFE bringing value addition to your greenfield projects?
I believe they will bring better technology. They will help us in design, technology selection, layout, project management. So, JFE will help in everything. I believe that with their help, we will be able to reduce our project cost.

In terms of new product developments, are you looking at India alone as a market or with JFE, you plan to target overseas markets?
We have discussed our plans for India and we haven’t discussed anything else. We believe that we should focus on India for the time being.

Since JFE comes on board, would they get straight exposure to the greenfield projects or not?
Those greenfield projects will be separate special purpose vehicles (SPVs), which would be held by JSW Steel. They will have holding in JSW Steel, by virtue of that they will have some share in those companies. But we can always ask them to come in at SPV level also. But these are points which are still open and we have not discussed it. We will discuss when the time comes.

Do you plan to use the raised fund for capital expenditure or it is only for the purpose of de-leveraging?
For capex, we have already tied up the financing, including internal accrual. This money will be purely going towards de-leveraging.

Essar Energy listed in London. Is it good model for resources companies to list there? Do you have such plans?

It is a good model. They followed what Vedanta did. It has been a successful model. But we are right now not looking at that.

How is the progress in Jharkhand?
Jharkhand project will only see the light of the day when we have all the approvals from mines and environment ministry. Typically the mine approvals and mine developments take five to seven years. It has already been three to four years, so may be it will take another two to three years. And only then the project will start.