Jindal Saw shares rise on investments in Middle East

Jindal Saw shares surged 11% on June 10 after the India-based pipe manufacturer announced a strategic investment of $118 million to expand its operations in the Middle East. This investment includes setting up a new seamless pipe manufacturing facility in Abu Dhabi, UAE, with an estimated cost of $105 million.

Jindal Saw shares rose 10.90% to Rs 257.20 against the previous close of Rs 231.90 on BSE. Market cap of the firm rose to Rs 15,987 crore. 

The plant, expected to have a capacity of 300,000 tonnes per annum, aims to cater to the oil and gas sector in the MENA region over the next three years. Additionally, Jindal Saw plans to establish two joint ventures in Saudi Arabia. The first venture, with Buhur for Investment Company LLC, will focus on a helically spiral welded pipe plant with Jindal Saw holding a 51% stake and investing up to $10 million, projected to complete in two years.

The second venture, with RAX United Industrial Company, involves setting up a ductile iron pipe manufacturing facility with a similar stake and a $3 million investment, expected to be completed within 12 to 18 months. Regulatory and government approvals for these projects are pending.

Following these announcements, Despite this upswing, the stock remains below its 52-week high of ₹383 but has achieved a 17% rise over the last month. The company's shares are currently trading at less than five times the enterprise value to EBITDA for the fiscal year 2027, indicating strong financial prospects following these expansions.

This strategic expansion into the Middle Eastern market highlights Jindal Saw's commitment to enhancing its presence in the iron and steel sector. By establishing manufacturing facilities tailored for the region's demands, particularly in the oil and gas industry, the company aims to solidify its market position. These investments are likely to boost Jindal Saw's production capacity significantly while attracting potential opportunities within the MENA region.