Jindal Steel to Avoid Debt for Expansion, Focus on Cost Efficiency

Jindal Steel has ruled out taking on debt to fund capacity expansion, choosing instead to focus on optimising its existing capacity and adding value to products, said VR Sharma, who returned as managing director after a four-year gap. Sharma outlined a host of cost-saving measures, which are expected to play out over the next few years.

“We are not going to burden our balance sheet with borrowings. We do not want to take loans,” Sharma told analysts on a call recently. While the steelmaker will invest in value-added products, it is not in a “race” to reach a certain number in terms of production capacity, Sharma added.

“We have a budget to spend from our earnings, and whenever we feel that is tight, we will not spend on capex,” he said. “We are not in the race for 30, 40 or 50 million tonnes.”

While rivals JSW Steel, Tata Steel and Steel Authority of India have chalked out a 40-60% jump in their capital expenditure this fiscal year from last year, Jindal Steel’s plan is to spend 11% less.

The company, which in May projected a capex of ₹7,500-10,000 crore for this fiscal year, has revised it to ₹8,500 crore in its latest guidance.

Jindal Steel is the only large integrated steel player in India that has not unveiled a fresh capacity expansion roadmap beyond its current plan, which is to increase capacity at its Angul plant to more than 25 million tonnes. JSW Steel, Tata Steel and AM/NS India have continued to announce new multi-million-tonne projects.

“Our first and foremost focus is that we should reach 100% capacity utilisation,” Sharma added. After that, he said, Jindal Steel will focus on cutting costs. One of the key levers for these cost savings will be the slurry pipeline, the company’s senior management said. Once commissioned, the slurry pipeline will help cut logistics costs and lead to savings of as much as ₹700 per tonne, they said. Sourcing more coal from its captive mines and economies of scale as the company ramps up production will also lead to cost savings, they said.

Jindal Steel currently has an annual production capacity of 15.6 million tonnes.

It had an output of 9.25 million tonnes in fiscal 2026, which the company plans to increase to 11.50 million tonnes this financial year.