Jindal Stainless raises $82 million from KfW IPEX-Bank for Jajpur facility expansion

Jindal Stainless Ltd will be raising around $82 million (around Rs 620 crore) from a German export financier, KfW IPEX-Bank to procure equipment from Primetals Technologies Austria GmbH and Andritz AG for expansion of its production facilities in Jajpur in the Indian state of Odisha.
“This long tenor financing for our growth Capex manifests investor confidence in the stainless steel business and the improved creditworthiness of Jindal Stainless,” said Group CFO, Anurag Mantri in a press release on Thursday.

Pricing of this new loan is spread over 6 months USD LIBOR rate said the company’s spokesperson.

“We’ve been paring down our debt and will continue to observe healthy leverage ratios. This funding is a win-win opportunity for both sides to promote indigenous growth and encourage local employment,” Mantri said.

KfW IPEX-Bank’s financing supports European exports, which in turn secure jobs in Austria, Germany and Europe.

The expanded facility is expected to increase stainless steel production capacity from 1.1 million tonnes per annum (MTPA) to 2.1 MTPA.

Part of this capacity expansion is a new facility for producing and casting stainless steel.

“Additionally, a new combo line or direct rolling, annealing and pickling line will be installed to increase the cold rolling mill capacity,” the company said in the media statement.

The financing is insured against economic and political risks by OeKB, the Austrian export credit agency, the company said.

Jindal Stainless’ manufacturing facility is located in the eastern part of India, in the state of Odisha. The manufacturing complex is equipped with a ferroalloys facility, and a captive power generation facility, which is eventually scalable up to 3.2 MTPA of stainless steel production.