JSW Steel to continue shopping spree, no deals likely in FY24: Joint MD Jayant Acharya

JSW Steel is ramping up efforts to secure raw materials to compliment the capacity expansion plans.

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Steel major JSW Steel doesn't expect to close any acquisition deals in FY24 after it lost the race to acquire a metallurgical coal unit of Canada’s Teck Resources. But Joint Managing Director Jayant Acharya told Moneycontrol that the company is actively scouting for other acquisition opportunities.

"We continue to scout for assets internationally and domestically to improve our overall coking coal securitisation. And these two remain our focus areas as we go into the next few years," Acharya said.

The Sajjan Jindal-led steel giant had earlier said that it was planning to buy a 20-40 percent stake. However, mining giant Glencore Plc on November 14 said it has entered a $6.93-billion agreement with Teck  for the acquisition of a 77 percent interest in the unit.

The company, which is riding high on robust domestic demand for steel, is ramping up efforts to secure raw materials to complement the capacity expansion. "We'll look at options which makes strategic sense in terms of closer to our locations and continue to bid for that," Acharya added.

Higher coking coal costs remains a challenge for the company which faced a $21 increase for the steel making ingredient on a QoQ basis. JSW Steel is looking to acquire international and domestic  coking coal mining assets to improve its raw material security, thereby shielding margins from cost pressures.

"We are looking at Australia, Canada and Mozambique for newer assets as well, and we are in talks with some... We will continue to look at more domestic coking coal assets to improve our blend and improve our raw material security in coking coal as well," Acharya said.

Asked about JSW Group's acquisition of MG Motor India, Acharya said: "As we progress into the joint venture and look at completing it closer to time, we will look at what synergies are there between the MG Motors and JSW Steel. It could be specifically with respect to supplies of steel for their production of vehicles."

Budget expectations

Acharya flagged concerns on the current imports situation. "From a budget perspective, the only area where we need to be cautious about is that the imports into the country are increasing, since we are a growing country and the rest of the economics are not doing that well. We need to be conscious about that and be cautious that we do not allow unfair trade into India," he said.

The company expects the government to continue  focus on infrastructure spend and public capex.