Jindal Steel & Power Limited: history, ownership, mission, how it works & makes money

A Brief History of Jindal Steel & Power Limited

Jindal Steel & Power Limited (JSPL) was founded in 1970 by O.P. Jindal in the Indian state of Haryana. Initially, the company started as a manufacturer of steel and has evolved into one of India's leading integrated steel producers. Over the years, JSPL has significantly expanded its operations and diversified its product offerings.

In 1995, JSPL made a landmark move by launching its first Integrated Steel Plant in Raigarh, Chhattisgarh. This facility has a capacity of producing approximately 3.6 million tons of steel annually. The company also entered the power sector in 1999, establishing a power plant in Chandrapur, Maharashtra, with an initial capacity of 340 MW.

By 2001, JSPL was listed on the Bombay Stock Exchange (BSE), and by 2009, the company had a market capitalization exceeding ₹25,000 crores. During this period, JSPL expanded its footprint internationally, entering markets in South Africa and Australia for iron ore and coal mining.

In 2010, JSPL acquired coal mines in Mozambique, enhancing its raw material security. This acquisition aimed at supporting its steel production process and reducing dependency on external suppliers. Furthermore, in 2016, JSPL's new plant in Angul, Odisha, began operations, with a production capacity of 1.8 million tons of liquid steel per annum.

As of the latest financial year ending March 2023, JSPL reported consolidated revenues of approximately ₹40,000 crores. The company achieved a net profit of around ₹3,000 crores, reflecting a year-on-year growth of 12%.

JSPL has also embarked on efforts towards sustainability. The company aims to achieve a reduction in carbon emissions by integrating advanced technologies in its manufacturing processes. In 2022, JSPL ranked among the top producers of Long Steel in India, with a market share of approximately 16% in the long steel segment.

Currently, JSPL is recognized not only for its production capacities but also for its commitment to corporate social responsibility. The company invests significantly in local communities through health, education, and infrastructure initiatives, impacting over 1 million lives across various locations.

With aggressive expansion plans and a focus on green initiatives, Jindal Steel & Power Limited aims to strengthen its position in the global steel market while navigating the challenges of an evolving energy landscape.

A Who Owns Jindal Steel & Power Limited

Jindal Steel & Power Limited (JSPL) is a major player in the steel and power sector in India and is part of the O.P. Jindal Group. The ownership structure of JSPL highlights significant shareholdings by both individual and institutional investors.

As of the latest available data, the shareholding pattern of JSPL is as follows:

The largest shareholder in JSPL is the promoter group, led by Savita Jindal, who is the chairperson of the company. Savita Jindal, along with her family, holds a significant portion of the promoter shares, thereby maintaining control over the company's strategic decisions.

In terms of recent market capitalization, JSPL reported a market cap of approximately ₹54,000 crore (around USD 7.3 billion) in early October 2023. The company's stock has exhibited strong performance, with a year-to-date increase of approximately 38%.

The company's financial performance reflects a positive trend, with revenues reported at ₹52,182 crore for the financial year ending March 2023, an increase from ₹44,000 crore the previous year. The net profit for the same period stood at ₹4,903 crore.

JSPL’s ownership base is complemented by various institutional investors, including mutual funds and domestic insurance companies. Notable institutional shareholders include:

The board of directors further strengthens the governance framework of JSPL, comprising experienced professionals from various sectors. The current managing director, Vikrant Jindal, along with other executive directors, plays a crucial role in strategic leadership and operational efficiency.

JSPL continues to attract foreign investment, indicating confidence in its operational capabilities and growth potential. As of October 2023, prominent foreign institutional investors include:

In summary, Jindal Steel & Power Limited exhibits a diverse ownership structure, combining significant promoter control with a strong presence of institutional investors, contributing to its robust governance and growth strategy in the competitive steel and power markets.

Jindal Steel & Power Limited Mission Statement

The mission statement of Jindal Steel & Power Limited (JSPL) encapsulates its commitment to sustainable growth, innovation, and excellence in the steel and power sectors. The company strives to be amongst the top steel producers in the world while ensuring minimal environmental impact. As of fiscal year 2023, JSPL reported a production capacity of approximately 9.6 million tons of steel per annum.

Additionally, JSPL’s mission emphasizes the creation of value for all stakeholders, including customers, employees, and investors. The company aims to achieve this through technological advancements and efficient operational practices. In FY 2023, JSPL's revenue reached approximately INR 45,000 crore, showcasing robust growth in its operational capabilities.

Core Values Related to Mission Statement

• Safety: Prioritizing the health and safety of employees in all operations.
• Integrity: Committing to ethical practices in dealings with stakeholders.
• Sustainability: Developing practices that minimize the ecological footprint.
• Innovation: Fostering a culture of continuous improvement and technological advancement.

Strategic Goals

JSPL's strategic goals are crucial for fulfilling its mission. Key goals include:

• Increasing Production Capacity: Aiming for a total steel production capacity of 12 million tons by 2025.
• Expanding Global Footprint: Enhancing its market presence in international markets, particularly in Africa and the Middle East.
• Enhancing Operational Efficiency: Targeting a reduction in production costs by 10% over the next three years.

Financial Performance

JSPL reported the following financial highlights in its latest earnings report for FY 2023:

JSPL’s consistent revenue growth reflects its commitment to achieving its mission. The net profit growth from INR 3,200 crore in FY 2021 to INR 5,000 crore in FY 2023 illustrates effective management and operational efficiencies.

In addition, JSPL is focused on enhancing its environmental sustainability practices. As of 2023, the company has reduced its carbon emissions by approximately 20% since 2015, aligning with global sustainability goals.

Conclusion of Mission Statement Analysis

In summary, Jindal Steel & Power Limited’s mission statement reflects its dedication to excellence in the steel and power industries while emphasizing sustainable, ethical practices and stakeholder value creation. The company’s strategic goals and financial performance underscore its commitment to achieving these objectives within a competitive marketplace.

How Jindal Steel & Power Limited Works

Jindal Steel & Power Limited (JSPL) operates primarily in the steel, power, and mining sectors. The company is a key player in the Indian infrastructure space and is known for its vertically integrated business model.

Core Operations

JSPL's operations are divided into several key segments:

• Steel Manufacturing: JSPL produces various steel products, including long products like re-bars, wire rods, and structural sections.
• Power Generation: The company has a diversified power generation portfolio, including thermal, gas-based, and renewable energy sources.
• Mining: JSPL engages in coal and iron ore mining, securing raw materials for its steel production.

Financial Overview

As of the fiscal year ending March 2023, JSPL reported consolidated revenues of approximately ₹42,000 crore, with a net profit of around ₹4,500 crore.

The company's EBITDA stood at ₹12,000 crore, indicating robust operational efficiency.

Steel Production Capacity

JSPL's total steel production capacity is estimated at 8.6 million tonnes per annum (MTPA). This includes:

• Long Steel Products: 5.1 MTPA
• Flat Steel Products: 3.5 MTPA

Power Generation Capacity

The total installed power generation capacity of JSPL is approximately 3,400 MW. The breakdown is as follows:

Market Presence

JSPL exports across multiple regions, including Southeast Asia, Middle East, and Europe. As of 2023, export sales accounted for approximately 15% of total revenue.

Corporate Social Responsibility

The company invests significantly in social initiatives. In the last fiscal year, JSPL allocated around ₹300 crore for its CSR activities, focusing on education, healthcare, and community development.

Stock Performance

JSPL's shares have seen notable fluctuations. As of October 2023, the stock price was approximately ₹550 per share, reflecting a year-to-date increase of around 40%. The company's market capitalization is approximately ₹65,000 crore.

Debt Levels

In terms of financial health, JSPL's debt-to-equity ratio stands at 1.5, indicating a leveraged position but manageable given its strong earnings.

Future Outlook

JSPL aims to expand its production capacity further, targeting an increase to 12 MTPA in steel by 2025. The company is also focusing on enhancing its renewable energy footprint, planning to add an additional 1,000 MW in the coming years.

How Jindal Steel & Power Limited Makes Money

Jindal Steel & Power Limited (JSPL) is a major player in the steel and power sectors, generating revenue through diversified operations. The company primarily earns money through the production and sale of steel products, power generation, and mining activities. As of the financial year 2023, JSPL reported revenue from operations amounting to ₹38,170 crore.

The breakdown of revenue by segment for the year ending March 2023 is as follows:

The steel segment includes products such as hot rolled, cold rolled sheets, and long products, which cater to various industries. As of Q2 FY2023, JSPL's crude steel production was approximately **1.7 million tons**, a **19% increase** from the previous year, highlighting its aggressive production capacity enhancement.

In the power sector, JSPL operates thermal power plants with a total installed capacity of **3,400 MW**. The company reported a generation of **17,000 MU** (Million Units) in FY2023, resulting in revenue growth driven by increased power purchase agreements (PPAs) and trading of surplus power. The average realization per unit of power stood at approximately **₹4.20** in the same period.

Mining activities, particularly iron ore and coal mining, further augment company revenues. JSPL's mining operations recorded an output of **8 million tons** of iron ore in FY2023, with sales contributing significantly to the overall profitability. The average selling price of iron ore was around **₹1,200** per ton, maintaining stable demand in the domestic market.

The company also benefits from various cost optimization strategies, reflected in a **14% reduction** in operating expenses year-over-year. The EBITDA margin for the financial year 2023 was reported at **23%**, showcasing effective management in a volatile market.

Furthermore, the export market plays a vital role in JSPL's revenue. In FY2023, exports accounted for **25%** of total steel sales, with demand from markets like the Middle East and Africa contributing significantly to revenue diversification.

JSPL's financial resilience is also showcased in its balance sheet. As of March 2023, the company's total debt stood at approximately **₹37,000 crore**, with a debt-to-equity ratio of **1.2**, which indicates a balanced leverage approach while maintaining robust operational cash flows.

These diversified streams of income, coupled with strategic investments in capacity expansion and technological enhancements, are pivotal in how Jindal Steel & Power Limited creates its revenue streams, ensuring sustainable growth in a competitive industry landscape.