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India's Jindal Stainless targets capacity boost after restructuring

India's Jindal Stainless Ltd. is working with banks to exit a central bank-mandated restructuring by the end of its fiscal year after it settles most of its dues, Bloomberg News reported Oct. 17, citing Managing Director Abhyuday Jindal.

The company, part of the Jindal Steel & Power Ltd. group, was forced to go into restructuring as its debt piled up. It plans to focus on its growth strategy once it exits the program.

The plan will involve increasing capacity to 2.4 million tonnes by 2021 from the current 1.6 million tonnes as the company looks to benefit from growing demand from the car, kitchenware, railway and defense sectors.

Jindal Stainless' scheduled repayments of 10 billion Indian rupees in the next two years will further trim its debt down to 36 billion rupees, the executive said.

"We will maintain financial prudence to maintain a healthy balance sheet and definitely not get into a high-leverage situation," Jindal said.

Meanwhile, the executive said the escalating trade war between China and the U.S. could see metals, including stainless steel, diverted to India.

He urged the government to review free trade agreements with countries such as South Korea, Indonesia, Japan and the proposed Regional Comprehensive Economic Partnership, which is being negotiated.

Jindal Steel & Power recently said it was considering restructuring operations to cut its 420 billion rupee debt. The plan will involve splitting its steel, power and international businesses into three stand-alone entities.

As of Oct. 16, US$1 was equivalent to 73.30 Indian rupees.