KSSF has also acquired approximately 5 percent equity stake in JSL through the secondary market, which demonstrates increased investors’ confidence in the company’s operations and growth outlook.
“The exit from CDR marks a significant step forward for JSL. This underlines the improvement in JSL’s liquidity profile and profitability. The exit will not only provide financial and operational flexibility to our business, but will pave the way for a new growth phase. The CDR tenure was prolonged as sustained imports impacted our top-line growth. We are grateful to all our stakeholders, especially our lenders, for their continued faith in us,” the release quoted managing director Abhyuday Jindal as saying.
The company has seen an improvement in net debt-equity ratio, which stood at 1.3 as on December 31, 2019, as compared to 3.2 as on March 2017.
The company has made significant investments to build infrastructure for stainless steel manufacturing at Jajpur, Odisha. The Jajpur facility has the potential to open up even more avenues for development of downstream stainless steel units across the region, thereby increasing capital investment and employment generation.
JSL’s CDR tenure was unduly extended, as consistent dumping of stainless steel flat products over the past several years from China & ASEAN countries continued to hurt the margins, causing undue financial stress.
Surplus production in these countries is being dumped into growing markets like India. Trade remedial measures like Anti-Dumping Duty and Countervailing duty imposed on imports by the government to create a level-playing field are being consistently circumvented, rendering these remedial measures ineffective. However, de-bottlenecking and internal process improvements helped JSL sustain its operations.
Currently, the company has an installed capacity of 1.1 million tonne. Going forward, JSL aims to focus on cost optimisation strategy and would be evaluating opportunities for attaining higher operational efficiency.