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JSW Steel has announced that Japan's JFE Steel will invest INR 15,750 crore for a 50% stake in the steel business of Bhushan Power and Steel (BPSL), valuing the enterprise at INR 53,000 crore. BPSL will now operate as an equal joint venture between the two companies. The deal is expected to help JSW reduce debt by more than INR 37,000 crore by June next year through the transfer of BPSL's business, associated debt and JFE's capital infusion. BPSL's 4.5-MTPA steel unit will be moved to a new entity under JSW Kalinga Steel, with plans to expand capacity to 10 MTPA by FY31. The partnership combines JSW's domestic scale with JFE's technology expertise.
JSW Steel recently announced that Japan's JFE Steel Corporation will invest INR 15,750 crore for a 50 percent stake in the steel business of Bhushan Power and Steel (BPSL), valuing the enterprise at INR 53,000 crore. With this, BPSL will now operate as an equal joint venture between JSW Steel and JFE. Company officials said the transaction will help JSW Steel reduce its debt by over INR 37,000 crore by June next year and support future growth for both JSW Steel and BPSL. As of September-end, JSW Steel's total debt stood at INR 79,000 crore. Advertisement
BPSL, acquired by JSW Steel for over INR 19,700 crore through the bankruptcy process in 2021, will see its steel business transferred to a new entity under JSW Kalinga Steel (JKS) for INR 24,483 crore through a slump sale. JKS is fully owned by Piombino Steel, which is majority-owned by JSW Steel. Around INR 5,000 crore of JSW Steel's debt will also shift to JKS as part of the restructuring.
JFE will acquire its 50 percent stake in JKS in two equal tranches, contributing the entire INR 15,750 crore by June 2026, subject to approvals. Officials explained that JSW Steel's debt reduction will come from three components: INR 24,483 crore from the transfer of BPSL's business, INR 5,000 crore from associated debt transfer, and INR 15,750 crore from JFE's investment. The promoter group's shareholding in JSW Steel will rise by 1.42 percent owing to its stake in Piombino Steel.
The BPSL steel business, with a current capacity of 4.5 million tonnes per annum, will be renamed and operated as a separate entity, with equal board representation from both partners. The capacity is expected to ramp up to 10 MTPA by FY31, supporting JSW Steel's broader expansion goals. Management indicated that BPSL's capacity was not part of the earlier 51 MTPA target set for FY31, and the deleveraging will allow JSW to pursue even higher capacity additions.
JSW Steel's joint Managing Director and CEO Jayant Acharya said the partnership builds on a long-standing relationship with JFE since 2009 and brings together JSW's domestic industry experience with JFE's technological expertise. JFE Steel president and CEO Masayuki Hirose said the collaboration is expected to strengthen both companies and contribute meaningfully to India's steel sector.
Following the announcement, JSW Steel's stock slipped 1.23 percent to INR 1,147.50 on the BSE, compared with a 0.04 percent dip in the benchmark index.
Source: PTI
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