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JSW Steel Ltd. Presentation to Analysts

JSW Steel Ltd. Presentation to Analysts. Tornagallu (Bellary) 27 th March 2006. Contents. Group Highlights JSW Steel Rights Issue Project Status. Overview - O.P.Jindal Organization. O.P. Jindal. P R Jindal. Sajjan Jindal. Ratan Jindal. Naveen Jindal. Pipes. Carbon steel.

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JSW Steel Ltd. Presentation to Analysts

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  1. JSW Steel Ltd.Presentation to Analysts Tornagallu (Bellary) 27th March 2006

  2. Contents • Group Highlights • JSW Steel • Rights Issue • Project Status

  3. Overview - O.P.Jindal Organization O.P. Jindal P R Jindal Sajjan Jindal Ratan Jindal Naveen Jindal Pipes Carbon steel Stainless steel Power & rail Jindal Saw Ltd. Jindal United Steel Inc. Saw Pipes Inc. JSW group • JSW Steel Ltd. • JSW Energy Ltd. • Southern Iron & Steel Co. Ltd. • South West Port Ltd. • JSW Aluminium Ltd. Jindal Stainless Ltd. Jindal Steel & Power Ltd.

  4. O.P.Jindal Group - Highlights Revenues of over US$ 4 bn Assets over US$ 4.6 bn Employing over 20,000 people O. P. Jindal Group Diverse business interests • Steel & related • Power • Industrial gases • Ports Group ranked 548th by Forbes

  5. JSW Group - Highlights Turnover over US$ 2 billion World’s largest air separation oxygen plant Employing over 9,000 people JSW group Known for growth and aggression - Turnover from US$ 22 mn to over US$ 2 bn in ten years Diversified business in steel, power, port and aluminium

  6. JSW Steel…

  7. JSW Steel - Capacity Million ton Capacity to increase from 2.5 to 7 mtpa in 3 years

  8. Capex & Financing Plan • Upto 3.8 mtpa – Nearing completion • 3.8 to 7 mtpa – Rs. 6,150 crore: FinancingRs. in crore Equity / Internal accruals : 2550 Debt : 3600 Total : 6150

  9. -Product Mix JSW Steel

  10. JSW Steel • Turnover over $1.7 bn • Market share of 12% in the domestic market • Employee strength over 4000

  11. Share Holding Pattern – 28.02.06

  12. JSW Steel - Key Strengths • Blend of 2 technologies - no petro fuel usage • Integrated from Iron Ore to galvanised and colour coated products • Proximity to sources of rich Iron Ore reserves - 30% captive Iron ore at 4 mtpa capacity

  13. Sole producer of flat steel in southern region JSW Steel - Key Strengths • Waste utilisation up to 85% / Zero effluent discharge • Extremely environment friendly & socially responsible approach

  14. JSW Steel - Key Strengths • Non unionised work force • Exports to over 50 countries • Long term tie ups with customer

  15. Voltas Ltd. Supplies to 589 OEMs across India Shree Precoated Brakes India Tube Products of India Some Domestic Customers

  16. Some International Customers

  17. Promoter Directors2 Executive Directors2 Lender Nominee Directors3 KSIIDC* Nominee Director1 Independent Directors5 JSW Steel - Management Structure Diversified Board & Management Structure Sajjan Jindal V C & M D Dr B.N. Singh JMD & CEO M.V.S. Rao Director (Finance) Board of Directors Audit, Remuneration, shareholders & investors grievance committees *Karnataka State Industrial & Investment Development Corporation

  18. Independent directors from diverse fields : Mr. Anthony Pedder, an internationally renowned steel expert Dr. Vijay Kelkar, an eminent economist Mr. Sudipto Sarkar, a reputed lawyer Mr. Uday Chitale, a reputed Chartered Accountant Dr. S. K. Gupta, an acclaimed steel expert Effective Internal control system JSW Steel-Profile of Directors Sound corporate governance practices

  19. JSW Steel 1 2 Financial highlights.. 3 4 5 6

  20. JSW Steel - Financial Trends (Figures in Rs. Mn) CAGR 82% CAGR 76% CAGR 246% 16.6%

  21. JSW Steel – Current Financials (Figures in Rs. Mn)

  22. JSW Steel – Gearing Ratios Debt / equity EBIDTA / Interest

  23. JSW Steel Going forward . . .

  24. Volume growth, 7 mtpa by FY 2009 and 10 mtpa by FY 2011 Pellet capacity to 5 mtpa by FY 2007 Slab capacity to 3.9 mtpa by FY 2007 HR Coils capacity to 3.2 mtpa by FY 2008 CR products capacity to 1.8 mtpa by 2008 Colour coated capacity to 0.1 mtpa by FY JSW Steel - Strategy • Value added products increasing from 38% to 53% by 2008

  25. JSW Steel - Strategy • Integration to reduce cost • Allocation of additional iron ore reserves • Investment opportunities in overseas Coal mines for Coal • Maintain gearing of 1 • Investment in cutting edge management practices • Innovation • Quality systems

  26. JSW Steel - Challenges / Concerns • Delay in tying up further captive raw material source • Declining but yet relatively firm coal prices – valuation of coal mine • Meet the growth imperative at 1:1 debt equity • Talent retention

  27. Rights Issue

  28. Fund raising upto Rs. 400 crs. (without warrants) Entitlement ratio on equity shares 1:8 Warrants entitlement of one Series A & one Series B warrant for every equity share offered on rights basis Warrant conversion period Series A : 18 - 36 months from allotment date Series B : 24 - 48 months from allotment date Rights-Broad Terms

  29. The terms of warrants issue shall be decided by the committee of the Board Warrants to be listed on allotment and will be tradable Rights-Broad Terms

  30. Project Status…

  31. Up to 3.8 mtpa Expansion - Project Status Commissioning to be completed by June 2006

  32. Upto 7 mtpa Expansion - Status • Financial closure: - In principle approvals in place • Orders placed: • Blast furnace of capacity 4019 M3 (Largest in India) • Land leveling started: • Blast furnace • BOF and CCP

  33. Key ratios *Market value per share is as on 24th March 2006 for all the calculations, wherever required All figures annualised wherever necessary

  34. THANK YOU

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