Even as analysts were dissecting India’s fastest-growing conglomerate, the Adani Group made a spectacular jump to the top rung of India’s cement business with the acquisition of Ambuja Cements and ACC led by Sajjan Jindal. There was a bid of $7 billion for the cement assets of the JSW Group – Holcim. Adani’s $10.5 billion purchase was dwarfed by the largest in Indian M&A history – wasting no time on losses.
Instead, the steel-to-sports group was busy piecing together an equally important acquisition in an entirely different area – renewable energy. The group entered into an agreement with Mytrah Energy India, which values the renewable energy producer’s portfolio of 2.3 gigawatts (GW) of renewable energy capacity at approximately $2 billion. Mytrah It has one of the largest wind departments in the country, with a capacity of about 1.7GW, in addition to 535MW of solar power.
Purchase, if it goes through, will accelerate JSW Energyplans to convert most of its power portfolio to renewable energy. The group plans to place 55% of its energy portfolio in renewable energy within the next two years and has a renewable capacity target of 20GW by the end of the current decade.
As the conglomerate grows, with consolidated revenues of around $13 billion, the JSW Group is only a tenth of India’s two largest conglomerates – Reliance and the Tata Group. but what sets jsw Also diversification is the main focus on the core sector. Of course, franchise sports have a side foray – it owns IPL biggies Delhi Capitals, Bengaluru FC and a Pro Kabaddi team – but that’s how it is.
JSW is investing big bucks on India’s long-term growth story. India’s push towards a $5 trillion economy and beyond will be driven by infrastructure. And this is where the steelmaker has focused its diversification – from steel to cement to power to captive coal and lignite mines to port infrastructure, which has essentially made India’s notoriously difficult to operate core infrastructure sector. work done.
In a recent interview, Gautam Adani justified his holcim purchases by arguing that an economy the size of India cannot grow by importing cement alone – it is one of the commodities in which large countries are more or less self-reliant. have to be. Same goes for steel or cement or energy – all sectors where JSW Group has focused its energy and investments.
These are also particularly emissions-heavy areas. While the carbon footprint of companies has never deterred Indian investors or lenders from backing projects, the same is certainly not true for foreign investors and lenders.
It is clear that going forward, the Sajjan Jindal Group is looking at global sources to raise the massive funds required to support its core infrastructure. With the rapid build-up of its renewable portfolio – it had already acquired the hydro assets of Jaiprakash Power and is developing the 240MW Kutehar hydroelectric project – JSW is now looking to add Mytrah Energy to this green mix.
This is clearly part of a larger plan to green its carbon footprint and make itself a more attractive proposition for climate-sensitive investors. Whereas JSW Energy is aiming to cut its carbon footprint by 50% by 2030 and wants to become carbon neutral by 2050.
Much of this is driven by the need to secure more long-term funding for its infrastructure expansion plans from overseas, as domestic long-term financing for infrastructure is severely constrained by the rising NPA burden on lenders, Infra in particular has been sourced from debt.
JSW has been one of the early movers among the Indian conglomerate to switch to green and sustainability-linked bonds. The group has raised around $1.6 billion through SLBs and green bonds. Last year, flagship JSW Steel raised $500 million through sustainability-linked bonds, tied to its ability to cut emissions from its steel business by about 23% by the end of the decade. Failing to meet the target will result in an increase of 0.375% in the coupon rate. In fact, Group CFO Seshagiri Rao recently said in an interview with Mint that the group intends to switch to financing entirely through green bonds within the next five years, as it will reduce borrowing costs. Doing and doubling will have double benefits. Tenure up to 10 years.
For JSW Group, going green is clearly as much about the greenback as it is about greening the planet.