JSW Infrastructure has confirmed its plans to acquire an under-construction slurry pipeline project from JSW Utkal Steel Limited, a wholly-owned subsidiary of JSW Steel.
What Happened: The board of directors of JSW Infrastructure gave the green light for the purchase of the 30 million tonnes per annum slurry pipeline project during a meeting on July 19, 2024. The company also intends to sign a long-term take-or-pay agreement for the transportation of iron ore slurry for 20 years with JSW Steel Limited.
The deal, estimated to be around ₹1,700 crores, is contingent on shareholders’ approval, regulatory approvals, and the finalisation of contractual agreements. The pipeline project, designed to transport iron ore from Nuagaon mines to Jagatsinghpur in Odisha, is in line with the company’s growth strategy and provides a sustainable solution for iron ore transportation.
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The company noted that the project will “offer a seamless logistics solution for the transportation of large volumes of iron ores” and “help to ensure the customer centricity for all logistic solutions such as transportation of iron ore, port handling at load port and discharge port.”
The acquisition is projected to be finalised within six months, provided the receipt of shareholders’ approval and other regulatory approvals. The project is set to be completed in early 2027, with commercial operations kicking off in April 2027.
The acquisition comes at a time when JSW Infrastructure’s shares have been under pressure following disappointing June quarter results. The company’s net profit for the April-June period marked a decline of about 8% from the same quarter last year. However, revenue from operations saw an increase of around 15% compared to a year ago.
The slurry pipeline project could potentially bolster the company’s growth strategy and provide a sustainable solution for iron ore transportation, which may be a critical factor in reviving investor confidence in the company’s future prospects.
Price Action: JSW Infra’s share price was down 6.07% to close at ₹315.70 on Friday.
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