Mumbai Capital

Sajjan, the family redeemer

Sajjan Jindal has been making aggressive moves to expand in the steel, cement and power sectors.— File Photo  

Sajjan Jindal, it appears, is the family redeemer. His yen for acquiring assets and pumping in investments into various projects has put him in the unenviable position of bailing out his brothers, neck deep in debt. After buying out three steel mills belonging to older brother Prithvi Raj in 2007, on Wednesday, the chairman of the $11-billion JSW Group bought out younger brother Naveen’s power plant.

JSPL has sealed the deal to buy Jindal Steel and Power Limited’s (JSPL) 1,000 MW power plant for an enterprise valuation of Rs 6,500 crore. Naveen Jindal, former Congress Member of Parliament and JSPL promoter, has been forced to sell some of his power plants and stake in steel units to reduce his ballooning debts. As of December 31, 2015, JSPL had a consolidated debt of over Rs 46,000 crore.

Nine years ago, Mumbai-based Sajjan Jindal bought three steel mills, controlled by his older brother in the US, for $900 million. He is struggling to make the purchase turn the corner; JSW has had to write down the value of its investments in the steel mills.

Sajjan Jindal’s largesse extends beyond his immediate family. In July last year, JSW Energy signed a non-binding Memorandum of Understanding with Monnet Ispat and Energy Ltd to acquire its power unit, Monnet Power Co Ltd, even as lenders clamour for an asset sale to recover their dues. Jindal is the brother-in-law of Monnet group chairman and MD Sandeep Jajodia.

Monnet Ispat and Energy is developing two coal-fired thermal power plants with total capacity of 1,050 MW in Odisha. The deal is yet to fructify though.

While the rest of India Inc worries about conserving cash, Jindal has been making aggressive moves to expand in the steel, cement and power sectors with a seemingly insatiable appetite for acquisitions and investments.

Despite a Rs 50,000-crore debt, the JSW Group was successful in buying out two hydro-power projects of Jaiprakash Power Ventures in Himachal Pradesh for Rs 9,700 crore. The deal raised quite a few eyebrows as Reliance Group chairman Anil Ambani had to pull out of it, citing regulatory hurdles. Adani Group chairman Gautam Adani too was eyeing Jaypee’s hydro power assets, but in the end, Jindal proved to be stronger.

JSW Energy has also entered into a binding MoU to buy Jaypee’s 500-MW Bina Thermal Power Plant. In 2014, JSW Steel acquired Welspun Maxsteel for Rs 1,000 crore. And now, Jindal is in the race to buy out Lafarge India’s 11 mtpa of cement capacity with an enterprise valuation of Rs 10,000 crore.

Whether he can maintain his winning streak is yet to be seen.

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Printable version | Feb 28, 2021 6:54:09 PM |

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