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Brookfield overtakes Blackstone as largest private investor in India
Canadian alternative asset manager Brookfield Asset Management trumped US private equity firm Blackstone to emerge as the largest private capital investor in India in 2019, lifted by deals with Reliance Industries Ltd (RIL).
Investments by Brookfield totalled nearly $6.28 billion last year across private equity and real estate, far outpacing the $2.38 billion in investments by Blackstone, according to deals tracker Venture Intelligence.
To be sure, for the four years through 2018, Blackstone had topped the list with investments of $4.34 billion, more than double Brookfield’s nearly $2.07 billion.
That changed last year when Brookfield signed deals with billionaire Mukesh Ambani-controlled RIL. Brookfield made a $3.6 billion buyout of the telecom infrastructure assets of RIL’s subsidiary, Reliance Jio Infocomm Ltd. It was the largest ever deal in India made by a private equity investor.
Brookfield also invested more than $1.87 billion in RIL’s gas pipeline assets, East West Pipeline Ltd.
The two investments, made through the infrastructure investment trusts (InvITs) of the companies, made up more than three quarters of Brookfield’s overall investments in the country in 2019.
Last year’s deals catapulted Brookfield’s total investments in India to $8.3 billion in the five-year period through 2019, ahead of Blackstone’s $6.7 billion, shows data.
Blackstone is currently the largest alternative asset manager in the world, with assets under management (AUM) of $571 billion spread across private equity, real estate, hedge funds and credit; Brookfield comes a close second with AUM of around $540 billion, according to data available on their websites.
One of the primary reasons for the increase in Brookfield’s India investments is linked to attractive yields offered by infrastructure assets in the country and the acceptability of InvITs, which have emerged as a preferred investment route for large institutional investors.
“With the decline in yields globally, large global LPs (limited partners), sovereign wealth funds and GPs (general partners or private equity firms that manage private equity funds) are increasing their allocation to emerging markets and India has been a beneficiary of this development, seeing record inflows via direct investments by pension funds and large GPs, especially in the infrastructure and real estate asset classes," said Vivek Soni, partner and national leader for private equity services at EY.
“Of particular note has been the increase in direct investments by pension funds and large GPs such as Brookfield and Fairfax that are headquartered in Canada. In the past five years, these Canadian investors have made direct investments of nearly $24 billion in India, of which $10.8 billion was invested in 2019, which was almost 2x of 2018," he added.
Besides the infrastructure deals, Brookfield’s major investments last year included its $563 million entry into the Indian hospitality sector through the acquisition of Hotel Leelaventure Ltd’s hotel properties and operations.
It also acquired two wind farms from Hyderabad-based renewable energy firm Axis Energy Ventures for about $73 million. Brookfield also paid about $109 million to acquire a prime Mumbai real estate asset from Scotland-based hotelier Sanjay Narang-owned Mars Enterprises and Hospitality Ltd.
And, now the Canadian investor is also looking to make its mark in private equity too, an asset class it had so far shied away from in India.
“Brookfield is gung-ho on the private equity opportunity in India. They recently pumped around $200 million into non-bank lender IndoStar Capital," a person, who advised Brookfield on a recent investment, said on condition of anonymity. “They had hired Aditya Joshi from PE firm Apax Partners last year and they are looking to do more PE deals in India. They are looking for investment opportunities of $200-300 million in size."
Brookfield raised $9 billion for its latest and largest private equity fund, Brookfield Capital Partners V, in November. The private equity fund exceeded its initial target of $7 billion and was more than double Brookfield’s previous fund, which raised $4 billion in 2016.
Last week, it announced the closing of its latest flagship global infrastructure fund with total equity commitments of $20 billion.
Flush with capital, Brookfield’s investments in India are expected to grow further.
“As Brookfield and other Canadian investors deepen their focus into sectors such as financial services, logistics infrastructure, renewables and commercial real estate, one can expect continued deal activity from the Canadians," Soni said.
Brookfield overtakes Blackstone as largest private investor in India
Canadian alternative asset manager Brookfield Asset Management trumped US private equity firm Blackstone to emerge as the largest private capital investor in India in 2019, lifted by deals with Reliance Industries Ltd (RIL).
Investments by Brookfield totalled nearly $6.28 billion last year across private equity and real estate, far outpacing the $2.38 billion in investments by Blackstone, according to deals tracker Venture Intelligence.
To be sure, for the four years through 2018, Blackstone had topped the list with investments of $4.34 billion, more than double Brookfield’s nearly $2.07 billion.
That changed last year when Brookfield signed deals with billionaire Mukesh Ambani-controlled RIL. Brookfield made a $3.6 billion buyout of the telecom infrastructure assets of RIL’s subsidiary, Reliance Jio Infocomm Ltd. It was the largest ever deal in India made by a private equity investor.
Brookfield also invested more than $1.87 billion in RIL’s gas pipeline assets, East West Pipeline Ltd.
The two investments, made through the infrastructure investment trusts (InvITs) of the companies, made up more than three quarters of Brookfield’s overall investments in the country in 2019.
Last year’s deals catapulted Brookfield’s total investments in India to $8.3 billion in the five-year period through 2019, ahead of Blackstone’s $6.7 billion, shows data.
Blackstone is currently the largest alternative asset manager in the world, with assets under management (AUM) of $571 billion spread across private equity, real estate, hedge funds and credit; Brookfield comes a close second with AUM of around $540 billion, according to data available on their websites.
One of the primary reasons for the increase in Brookfield’s India investments is linked to attractive yields offered by infrastructure assets in the country and the acceptability of InvITs, which have emerged as a preferred investment route for large institutional investors.
“With the decline in yields globally, large global LPs (limited partners), sovereign wealth funds and GPs (general partners or private equity firms that manage private equity funds) are increasing their allocation to emerging markets and India has been a beneficiary of this development, seeing record inflows via direct investments by pension funds and large GPs, especially in the infrastructure and real estate asset classes," said Vivek Soni, partner and national leader for private equity services at EY.
“Of particular note has been the increase in direct investments by pension funds and large GPs such as Brookfield and Fairfax that are headquartered in Canada. In the past five years, these Canadian investors have made direct investments of nearly $24 billion in India, of which $10.8 billion was invested in 2019, which was almost 2x of 2018," he added.
Besides the infrastructure deals, Brookfield’s major investments last year included its $563 million entry into the Indian hospitality sector through the acquisition of Hotel Leelaventure Ltd’s hotel properties and operations.
It also acquired two wind farms from Hyderabad-based renewable energy firm Axis Energy Ventures for about $73 million. Brookfield also paid about $109 million to acquire a prime Mumbai real estate asset from Scotland-based hotelier Sanjay Narang-owned Mars Enterprises and Hospitality Ltd.
And, now the Canadian investor is also looking to make its mark in private equity too, an asset class it had so far shied away from in India.
“Brookfield is gung-ho on the private equity opportunity in India. They recently pumped around $200 million into non-bank lender IndoStar Capital," a person, who advised Brookfield on a recent investment, said on condition of anonymity. “They had hired Aditya Joshi from PE firm Apax Partners last year and they are looking to do more PE deals in India. They are looking for investment opportunities of $200-300 million in size."
Brookfield raised $9 billion for its latest and largest private equity fund, Brookfield Capital Partners V, in November. The private equity fund exceeded its initial target of $7 billion and was more than double Brookfield’s previous fund, which raised $4 billion in 2016.
Last week, it announced the closing of its latest flagship global infrastructure fund with total equity commitments of $20 billion.
Flush with capital, Brookfield’s investments in India are expected to grow further.
“As Brookfield and other Canadian investors deepen their focus into sectors such as financial services, logistics infrastructure, renewables and commercial real estate, one can expect continued deal activity from the Canadians," Soni said.
Brookfield overtakes Blackstone as largest private investor in India
India gets $463.44 million FDI in food processing in April-September FY20
India has received foreign direct investment (FDI) of $463.44 million in the food processing sector in the first half of the current fiscal, the government informed Parliament on Tuesday. The country had received $628.24 million FDI in the food processing sector during the full fiscal year 2018-19 and $904.90 million during 2017-18, it added.
The government has permitted 100 per cent FDI through automatic route in manufacturing of food products subject to sectoral rules and regulations. Also, 100 per cent FDI is allowed through government route in retail trade in respect of food products produced/manufactured in India.
Placing the data before the Lok Sabha, Minister of State for Food Processing Industries Rameswar Teli said the country has received $463.44 million FDI in the food processing sector during April-September period of 2019-20.
"...in April-June 2019 quarter, the FDI equity inflow was $329.04 million which is higher than the quarter ending September 2019 at $134.40 million," he added.
During the first quarter of the fiscal, maximum FDI of $244.95 million was made in Tamil Nadu and Puducherry, followed by $25.08 million in Maharasthra, Dadra and Nagar Haveli and Daman and Diu, while $22.99 million in Delhi and part of Uttar Pradesh and Haryana, the data showed.
As per the latest Annual Survey of Industries, the minister said the invested capital in the registered food processing sector was Rs 3,86,350 crore in 2015-16, Rs 4,17,695 crore in 2016-17 and Rs 4,48,938 crore in 2017-18.
In a separate reply, he also said the government has revised the operational guidelines of Scheme for Creation/Expansion of Food Processing & Preservation Capacities (CEFPPC) under the Pradhan Mantri Kisan Sampada Yojana (PMKSY) and notified on January 8 this year.
The Ministry of Food Processing Industries (MoFPI) does not set up any food processing industries/projects/units on its own. It provides credit-linked capital subsidy in the form of grants-in-aid for setting up of various food processing industries/projects/units under its central sector scheme PMKSY.
India gets $463.44 million FDI in food processing in April-September FY20: Govt
India has received foreign direct investment (FDI) of $463.44 million in the food processing sector in the first half of the current fiscal, the government informed Parliament on Tuesday. The country had received $628.24 million FDI in the food processing sector during the full fiscal year 2018-19 and $904.90 million during 2017-18, it added.
The government has permitted 100 per cent FDI through automatic route in manufacturing of food products subject to sectoral rules and regulations. Also, 100 per cent FDI is allowed through government route in retail trade in respect of food products produced/manufactured in India.
Placing the data before the Lok Sabha, Minister of State for Food Processing Industries Rameswar Teli said the country has received $463.44 million FDI in the food processing sector during April-September period of 2019-20.
"...in April-June 2019 quarter, the FDI equity inflow was $329.04 million which is higher than the quarter ending September 2019 at $134.40 million," he added.
During the first quarter of the fiscal, maximum FDI of $244.95 million was made in Tamil Nadu and Puducherry, followed by $25.08 million in Maharasthra, Dadra and Nagar Haveli and Daman and Diu, while $22.99 million in Delhi and part of Uttar Pradesh and Haryana, the data showed.
As per the latest Annual Survey of Industries, the minister said the invested capital in the registered food processing sector was Rs 3,86,350 crore in 2015-16, Rs 4,17,695 crore in 2016-17 and Rs 4,48,938 crore in 2017-18.
In a separate reply, he also said the government has revised the operational guidelines of Scheme for Creation/Expansion of Food Processing & Preservation Capacities (CEFPPC) under the Pradhan Mantri Kisan Sampada Yojana (PMKSY) and notified on January 8 this year.
The Ministry of Food Processing Industries (MoFPI) does not set up any food processing industries/projects/units on its own. It provides credit-linked capital subsidy in the form of grants-in-aid for setting up of various food processing industries/projects/units under its central sector scheme PMKSY.
India gets $463.44 million FDI in food processing in April-September FY20: Govt
India is now the world’s 5th largest economy
India became the world’s fifth largest economy last year, according to data from the IMF’s October World Economic Outlook. When ranked by nominal GDP, the country leapfrogged France and the UK.
The country's GDP growth has been among the highest in the world in the past decade – regularly achieving annual growth of between 6-7%.
This rapid rise has been fueled by a number of factors, according to a 2016 McKinsey Global Institute report, including urbanization and technologies that have improved efficiency and productivity.
India's real GDP, however, a measure that accounts for inflation, is forecast to slow in the year ahead thanks to credit weaknesses.
In 9 years, India has moved from 9th place to 5th place on the ranking of world economies.
Image: World Economic Forum
On the rise
As recently as 2010, India was in 9th place, trailing countries such as Brazil and Italy.
India's rise is even more dramatic across the past 25 years. Since 1995, the country's nominal GDP has jumped more than 700%.
India's GDP growth 1980-2020
Image: IMF
Challenges ahead
Despite its strong economic growth, the country still faces its share of challenges. Access to development and new opportunities has been uneven, says the World Bank, varying by geographic location.
Furthermore, India remains home to one quarter of the world's poor. Just 39% of its rural residents can access sanitation facilities and nearly half the total population still defecate in the open, according to the UN.
What is the World Economic Forum doing about the skills gap in India?
According to our Future of Jobs 2018 report, more than one-half of India’s workforce will need to be re-skilled by 2022 to meet the demands of the Fourth Industrial Revolution.
With the world’s largest youth population and more than half of the population of working age, skills development is critical for India to sustain inclusive growth and development.
In late 2018, the World Economic Forum, in collaboration with India's oil and skills development minister as well as the head of business consulting company Infosys, launched a Task Force for Closing the Skills Gap in India.
India - Future of Jobs 2018
Image: Forum's Future of Jobs 2018 Report
The task force brings together leaders from business, government, civil society and the education and training sectors to help future-proof India’s education and training systems. Find out more about our Closing the Skills Gap 2020 initiative.
Still, significant progress has been made. Poverty reduction rates are among the highest in the world, with more than 160 million fewer people living in extreme poverty in 2000 compared to 2015.
Annual change in poverty rates
Image: World Bank
According to the World Bank, the country is also seeking ways to ensure its future growth is more sustainable and inclusive, adjusting its policies regarding social protections and infrastructure development.
India is now the world’s 5th largest economy
India became the world’s fifth largest economy last year, according to data from the IMF’s October World Economic Outlook. When ranked by nominal GDP, the country leapfrogged France and the UK.
The country's GDP growth has been among the highest in the world in the past decade – regularly achieving annual growth of between 6-7%.
This rapid rise has been fueled by a number of factors, according to a 2016 McKinsey Global Institute report, including urbanization and technologies that have improved efficiency and productivity.
India's real GDP, however, a measure that accounts for inflation, is forecast to slow in the year ahead thanks to credit weaknesses.
In 9 years, India has moved from 9th place to 5th place on the ranking of world economies.
Image: World Economic Forum
On the rise
As recently as 2010, India was in 9th place, trailing countries such as Brazil and Italy.
India's rise is even more dramatic across the past 25 years. Since 1995, the country's nominal GDP has jumped more than 700%.
India's GDP growth 1980-2020
Image: IMF
Challenges ahead
Despite its strong economic growth, the country still faces its share of challenges. Access to development and new opportunities has been uneven, says the World Bank, varying by geographic location.
Furthermore, India remains home to one quarter of the world's poor. Just 39% of its rural residents can access sanitation facilities and nearly half the total population still defecate in the open, according to the UN.
What is the World Economic Forum doing about the skills gap in India?
According to our Future of Jobs 2018 report, more than one-half of India’s workforce will need to be re-skilled by 2022 to meet the demands of the Fourth Industrial Revolution.
With the world’s largest youth population and more than half of the population of working age, skills development is critical for India to sustain inclusive growth and development.
In late 2018, the World Economic Forum, in collaboration with India's oil and skills development minister as well as the head of business consulting company Infosys, launched a Task Force for Closing the Skills Gap in India.
India - Future of Jobs 2018
Image: Forum's Future of Jobs 2018 Report
The task force brings together leaders from business, government, civil society and the education and training sectors to help future-proof India’s education and training systems. Find out more about our Closing the Skills Gap 2020 initiative.
Still, significant progress has been made. Poverty reduction rates are among the highest in the world, with more than 160 million fewer people living in extreme poverty in 2000 compared to 2015.
Annual change in poverty rates
Image: World Bank
According to the World Bank, the country is also seeking ways to ensure its future growth is more sustainable and inclusive, adjusting its policies regarding social protections and infrastructure development.
India is now the world’s 5th largest economy
I spoke to the pilots who are flying the aircraft for Geological survey of India and doi9ng the mapping of India's mineral resources. As per them, the latest gold find of 3500 tons is just about a tenth of total gold they have discovered in India and They have also found lots and lots of uranium and lithium all over India. Infect the ganga basin is full of oil as well. We still have many diamond mines unexplored till now. It seems the golden era of India is tuely returning.
Special Economic Zones continue to take lead in expanding exports
The Special Economic Zones, SEZ continue to take the lead in expanding the exports for the country. Even in the midst of a volatile global economy, SEZs in India have shown resilience and have achieved 100 billion dollar worth of exports so far.
Sectors that saw healthy growth in this financial year include gems and jewelry, trading and Logistics, leather and footwear, non-conventional energy, textiles and garments. Petrochemicals constitute a major segment of SEZ exports, however, growth was muted in this segment this year which may be attributed to the softening of global crude prices. There are 241 SEZs operational in the country.
Special Economic Zones continue to take lead in expanding exports
The Special Economic Zones, SEZ continue to take the lead in expanding the exports for the country. Even in the midst of a volatile global economy, SEZs in India have shown resilience and have achieved 100 billion dollar worth of exports so far.
Sectors that saw healthy growth in this financial year include gems and jewelry, trading and Logistics, leather and footwear, non-conventional energy, textiles and garments. Petrochemicals constitute a major segment of SEZ exports, however, growth was muted in this segment this year which may be attributed to the softening of global crude prices. There are 241 SEZs operational in the country.
Special Economic Zones continue to take lead in expanding exports
Engineering MNCs push exports from India, gain big
Engineering MNCs push exports from India, gain big
Engineering MNCs push exports from India, gain big
India Inc to give average hike of 9%
Salary Hike in India: India Inc to give avg hike of 9%: Survey | India Business News - Times of India
Salary Hike in India: India Inc to give avg hike of 9%: Survey | India Business News - Times of India
India lists 38 drug raw materials for which it wants to end dependence on China
In meeting chaired by Niti Aayog CEO Amitabh Kant, govt asks top Indian pharma firms to amp up production of these 38 raw materials, technically called APIs.
By Himani Chandna
19 February, 2020 9:23 pm IST
Medicinal drugs (Representational image) | Pixabay
New Delhi: The Modi government has drawn up a list of 38 drug raw materials that it wants locally produced in a bid to end the country’s dependence on Chinese imports for them, ThePrint learnt.
In an hour-long meeting chaired by Amitabh Kant, CEO of think-tank NITI Aayog Wednesday, the government has asked leaders of the Indian pharmaceutical industry to boost the manufacturing of these raw materials, which are scientifically called active pharmaceutical ingredients (APIs).
The APIs, also known as bulk drugs, are the key raw material used for manufacturing medicines. For instance, paracetamol is the API for Crocin.
“The government’s apex body, the Central Drug Standards Control Organisation (CDSCO) has prepared a list of 38 essential APIs where India needs to be self-dependent. The government has informed us about the list but has not circulated it yet,” said V.V. Krishna Reddy, national president, Bulk Drug Manufacturers Association (BDMA) who was part of the meeting. “However, it is still a suggestion and not an imposition to start the production of these selected APIs.”
The list is likely to contain the fermentation process-based drugs such as crucial antibiotics penicillin, amoxicillin, ampicillin, tetracycline and essential vitamin and hormonal pills. It’s a market that China dominates across the globe.
Indian drugmakers import around 70 per cent of their total bulk drugs from China. In 2018-19 fiscal, the government had informed the Lok Sabha that the country’s firms imported bulk drugs and intermediates worth $2.4 billion from China.
Also read: Modi govt halts plan to stop medicine export as firms in coronavirus-hit China resume work
In meeting, industry lists its difficulties
Wednesday’s meeting was attended by Sudhir Mehta of Torrent Pharmaceuticals, Pankaj Patel of Cadila Healthcare, Dilip Shanghvi of Sun Pharma and Satish Reddy of Dr. Reddy’s Laboratories among several other heads of Indian pharmaceutical companies.
In the hour-long meeting, the industry highlighted its difficulty in procuring environmental clearances and the need for tax concessions for re-starting the production of APIs.
“The objective of the meeting was to understand from the industry how the government can help to revive the production of APIs in India. The idea is to come up with a comprehensive policy on API production in India,” said a government official who was part of the meeting.
“We are already in talks with multiple ministries to facilitate the easy manufacturing of these products in India,” the official added.
The government has involved several ministries including the Ministry of Environment, Forest and Climate Change, Ministry of Commerce and Trade, Ministry of Health, Department of Pharmaceuticals and the Ministry of Finance to draw up the final policy to revive the production.
Lockdown in China
India is, however, likely to struggle with a shortage of APIs due to the shutdown of the Chinese market.
While several Indian drugmakers were well-stocked when the deadly coronavirus hit China, the industry might run out of the key ingredients by mid-March.
“Indian industry is so intertwined that it is impossible in our view to find a single player that would not be impacted by Chinese API shortages, should these materialise from post-mid-March,” said a paper titled India Pharmaceuticals: Coronavirus Impact and published by the Hong Kong-based equity research firm, Haitong International Securities Group.
In 2014, national security adviser (NSA) Ajit Doval had warned that “India runs the risk of a severe shortage of medicines because of its over-dependence on China for sourcing raw material for drugs”.
India lists 38 drug raw materials for which it wants to end dependence on China
But sir GSI said today they didn't conduct any such survey. How can you speak to those pilots?
Also for oil and gas there need to be some geographical conditions in past, Ganga plains shows no such evidence so chances of oils are almost nil.
So it has turned out to be much ado about nothing. But this talk of oil in Ganga basin is pretty accurate.
JSW to become India's largest steelmaker with Bhushan Power takeover
In the fight for supremacy in the Indian steel sector, Sajjan Jindal-controlled JSW Steel will overtake Steel Authority of India (SAIL) and Tata Steel in production capacity, after the acquisition of Bhushan Power and Steel (BPSL). JSW Steel's steelmaking capacity will increase to 21.5 million tonne (MT) from 18 MT post the Rs 19,700 crore acquisition, for which it has got the green signal from National Company Law Appellate Tribunal (NCLAT).
Tata Steel had become the largest steelmaker in India with a capacity of 19.6 MT with the Rs 35,200 crore worth acquisition of Bhushan Steel (BSL) in May 2018. Soon after in June 2018, Prime Minister Narendra Modi dedicated SAIL's modernized Bhilai Steel Plant to the nation and with this, the steelmaking capacity of the state-run company had increased to 21 MT. SAIL had spent Rs 70,000 crore for the modernization and expansion programme.
In September 2018, JSW Steel-Aion Investments jointly acquired another bankrupt firm Monnet Ispat & Energy at a cost of Rs 2,875 crore. It has 1.2 MT capacity and it is not added to the capacity of JSW Steel since the Indian partner is minority promoter shareholder in Monnet. They are investing about Rs 1,000 crore to expand Monnet's capacity to 2 MT.
JSW Steel is increasing its capacity at the Dolvi plant, which was formerly Ispat Energy, to 10 MT from 5 MT and at the Vijayanagar plant CRM-1 complex to 1.8 MT from 0.85 MT. The Dolvi expansion is expected to be completed by September 2020. With the completion of the expansions, the capacity will increase to 24 MT. Including BPSL and Monnet, the capacity under JSW's ambit would be around 29 MT.
In the case of Tata Steel, the consolidated crude steel production capacity in India stands at 19.6 MT with manufacturing facilities in Jamshedpur in Jharkhand, Kalinganagar and Dhenkanal in Odisha, Sahibabad in Uttar Pradesh and Khopoli in Maharashtra. The steelmaker has commenced the phase 2 expansion of its Kalinganagar steel plant to 8 MT from 3 MT. The Rs 23,500 crore expansion project is expected to be completed by 2022.
In Europe, Tata Steel through the acquisition of Corus Plc in 2007 has emerged as one of the largest steel producers. It has a crude steel production capacity of over 12.3 MT at present. With the steelmaking facilities in the UK and the Netherlands and downstream plants across Europe, it supplies strip steel products to automotive, construction, packaging and engineering industries. In South-East Asia, Tata Steel operates through subsidiaries NatSteel and Millennium Steel. Including its all production units, Tata Steel has 33 MT steelmaking capacity across the world.
The third private player in the Indian industry, ArcelorMittal Nippon Steel India, which acquired bankrupt Essar Steel, has a capacity of 10 MT. The company has 14 MT iron ore pellet facilities in the east. ArcelorMittal plans to increase the finished steel shipments to 8.5 MT in the medium-term by completing the ongoing capital expenditure plans, enhancing the efficiency and commissioning of additional assets. The company's medium-term goal is to double the steel production from the Hazira plant to 15 MT from 7.5 MT at present.
SAIL plans to increase the production capacity to 50 MT in two phases. By 2030-31, the PSU would ramp up production capacity to 50 MTPA.
JSW to become India's largest steelmaker with Bhushan Power takeover
In the fight for supremacy in the Indian steel sector, Sajjan Jindal-controlled JSW Steel will overtake Steel Authority of India (SAIL) and Tata Steel in production capacity, after the acquisition of Bhushan Power and Steel (BPSL). JSW Steel's steelmaking capacity will increase to 21.5 million tonne (MT) from 18 MT post the Rs 19,700 crore acquisition, for which it has got the green signal from National Company Law Appellate Tribunal (NCLAT).
Tata Steel had become the largest steelmaker in India with a capacity of 19.6 MT with the Rs 35,200 crore worth acquisition of Bhushan Steel (BSL) in May 2018. Soon after in June 2018, Prime Minister Narendra Modi dedicated SAIL's modernized Bhilai Steel Plant to the nation and with this, the steelmaking capacity of the state-run company had increased to 21 MT. SAIL had spent Rs 70,000 crore for the modernization and expansion programme.
In September 2018, JSW Steel-Aion Investments jointly acquired another bankrupt firm Monnet Ispat & Energy at a cost of Rs 2,875 crore. It has 1.2 MT capacity and it is not added to the capacity of JSW Steel since the Indian partner is minority promoter shareholder in Monnet. They are investing about Rs 1,000 crore to expand Monnet's capacity to 2 MT.
JSW Steel is increasing its capacity at the Dolvi plant, which was formerly Ispat Energy, to 10 MT from 5 MT and at the Vijayanagar plant CRM-1 complex to 1.8 MT from 0.85 MT. The Dolvi expansion is expected to be completed by September 2020. With the completion of the expansions, the capacity will increase to 24 MT. Including BPSL and Monnet, the capacity under JSW's ambit would be around 29 MT.
In the case of Tata Steel, the consolidated crude steel production capacity in India stands at 19.6 MT with manufacturing facilities in Jamshedpur in Jharkhand, Kalinganagar and Dhenkanal in Odisha, Sahibabad in Uttar Pradesh and Khopoli in Maharashtra. The steelmaker has commenced the phase 2 expansion of its Kalinganagar steel plant to 8 MT from 3 MT. The Rs 23,500 crore expansion project is expected to be completed by 2022.
In Europe, Tata Steel through the acquisition of Corus Plc in 2007 has emerged as one of the largest steel producers. It has a crude steel production capacity of over 12.3 MT at present. With the steelmaking facilities in the UK and the Netherlands and downstream plants across Europe, it supplies strip steel products to automotive, construction, packaging and engineering industries. In South-East Asia, Tata Steel operates through subsidiaries NatSteel and Millennium Steel. Including its all production units, Tata Steel has 33 MT steelmaking capacity across the world.
The third private player in the Indian industry, ArcelorMittal Nippon Steel India, which acquired bankrupt Essar Steel, has a capacity of 10 MT. The company has 14 MT iron ore pellet facilities in the east. ArcelorMittal plans to increase the finished steel shipments to 8.5 MT in the medium-term by completing the ongoing capital expenditure plans, enhancing the efficiency and commissioning of additional assets. The company's medium-term goal is to double the steel production from the Hazira plant to 15 MT from 7.5 MT at present.
SAIL plans to increase the production capacity to 50 MT in two phases. By 2030-31, the PSU would ramp up production capacity to 50 MTPA.
JSW to become India's largest steelmaker with Bhushan Power takeover
