JSW Steel on Thursday announced an ambitious plan to invest $22 billion (Rs 1,32,000 crore) to increase its steel capacity over three times to 40 million tonnes per annum by 2025, adding to the frenzy of multiple big-ticket investments announced by companies since the Narendra Modi-led government came to power in May.
In the last couple of months companies ranging from Tata Group, Reliance Industries, Adani Group to online retail heavyweights such as Amazon and Flipkart have pledged investments to the tune of over $80 billion (Rs 4,80,000 crore) while there has been a simultaneous spike in mergers and acquisitions worth $13.4 billion (Rs 80,400 crore) during the same period.
And this may just be the tip of the iceberg.
“After more than three decades, we now have a stable government at the Centre with a clear majority by a single political party. This is likely to have far-reaching consequences over the medium-term outlook for the country — from expected ushering in of reforms, a revival in economic growth and the strengthening of the governance framework,” said Sajjan Jindal, chairman and managing director, JSW Steel, at the company’s annual general meeting held in Mumbai on Thursday.
“India is now at an inflection point, where the government’s focus is on implementing speedy reforms, nurturing strong macroeconomic fundamentals and improving the investment scenario, all of which augurs well for the country,” he added.
The announcements, however, come with many riders.
A number of big investment projects from the last decade including Posco and ArcelorMittal’s steel plants have remained on paper and failed to take off due to regulatory uncertainties and problems in land acquisition. Jindal’s own greenfield projects in West Bengal and Jharkhand are running behind schedule and the company has said that further capital would only be employed once raw material linkages are firmly in place.
“While we remain committed to the planned greenfield projects in West Bengal and Jharkhand, committing additional capital to these projects is limited to securing raw material linkages as it is fundamental to achieve financial closure,” Jindal told shareholders.