JSW Group spreads wings across energy, cement, ports, paints and EVs

You have to grow, and grow fast — that’s the DNA of the JSW group, Chairman Sajjan Jindal said as JSW Cement made its debut on the stock market mid-August. The remark captured not just the moment but also the momentum of JSW’s growth story. JSW Steel — the flagship of the conglomerate — has transformed from a two-million-tonne (mt) plant in the early 2000s to India’s largest steel producer. Along the way, the group has morphed into a $23-billion force, stretching from energy and cement to ports and paints, all while steel remains its bread and butter. Now, it is gearing up for the future with another audacious bet: Electric vehicles (EV). Anchored in steel Steel was the starting point for the group — going back to 1982 when a cold rolling unit was set up at Vasind near Mumbai. The turning point, however, came in 1993 when Jindal laid out a detailed plan for the 2 mt plant before then ICICI chairman, Narayanan Vaghul. That paved the way for Vijayanagar Works (Karnataka) and set the stage for everything that followed. The journey from 1.6 mt of steel capacity in 2002 to 35.7 mt (including 1.5 mt in the US) has been driven by a mix of acquisitions and organic growth. Alongside, the group has branched into businesses that supported the core. These businesses now stand as independent verticals, each chasing its own growth ambitions. On JSW Infrastructure, analysts at Motilal Oswal said that by consciously reducing dependence on captive JSW group cargo and expanding into containerised, liquid, and other diversified categories, the company is mitigating concentration risks while opening new revenue pools. That philosophy of de-risking and diversifying the customer base runs through its other businesses as well. Over the last two decades, about ₹2 trillion has been put in across sectors. JSW group Chief Financial Officer Seshagiri Rao said steel has anchored every venture the group has built to achieve the benefits of integration in the value chain, either as customer or vendor/supplier — be it energy, infrastructure, cement, or paints. “This has immensely benefitted [us], and made JSW steel one of the best conversion cost steel producers in the world, while simultaneously supporting the other verticals to expand their businesses independent of the steel business,” he added. “It is a win-win.” The logic extends to automobiles as well. Making of a conglomerate Steel needs power. It produces slag that feeds cement, and moving material at scale requires ports. That’s how the energy, cement and infrastructure businesses were born. And then as the market moved to colour-coated steel some years back, it also paved the way for JSW Paints. Today, after a string of acquisitions and expansion, JSW Energy has 12.8 gigawatt (Gw) of installed generation capacity; JSW Cement has a capacity of 20.6 mt; JSW Infrastructure is the second-largest port operator in India; and JSW Paints is poised to become the fourth-largest paintmaker with the acquisition of AkzoNobel India. Cement and paints are being steered by Jindal’s son, Parth, as managing director. But it’s the capital-intensive steel that accounts for the lion’s share of revenues among the listed group entities — about 88 per cent of revenues and half the profit. In auto, JSW Steel is a significant supplier to the industry. This has largely been possible due to the technology collaboration with Japan’s JFE. In 2010, the Japanese steelmaker had made a strategic investment in JSW Steel by picking up a 15 per cent stake. JSW Steel’s share in auto-grade steel at that point was about 2 per cent. Fifteen years on, it stands at 32 per cent. That has given JSW the confidence to enter the auto sector — an ambition set to grow bigger. Heavy investments, mega ambitions Traditionally, the group’s focus has been on manufacturing. “In each vertical, there are big plans to grow. The total capital expenditure over the next five years will be in the range of ₹3.25 trillion,” Rao said. Steel, for which the target is 51.5 mt in capacity by FY31, will account for a major part; auto will also be a reasonable contributor, he said. In November 2023, the JSW group and China’s SAIC Motor announced a strategic joint venture (JV) as part of which the Indian conglomerate acquired a 35 per cent stake in JSW MG Motor India. While that JV is charting its growth map, JSW is also preparing its solo act in the sector. “In addition to our venture with MG, we will be setting up a factory for EV buses and trucks in Maharashtra,” said Rao. The company, he added, is also committing capital to set up an independent car factory, 100 per cent owned by the group; “the car will be branded JSW and is likely to be rolled out in three years.” For technology, JSW intends to tap third parties. Besides this, the group is exploring the possibility of developing facilities to localise the EV ecosystem. It is reported to have had discussions with Chinese, Japanese, and South Korean companies for sourcing technology for its lithium-ion battery project for EVs. “Wherever possible, we want to localise and help build the ecosystem in India,” Rao said. “But that doesn’t mean we’ll participate in the entire value chain.”