JSW Steel Seeks Approval for JFE JV to Fund Expansion

JSW Steel has sought shareholder approval for a strategic joint venture (JV) with Japan’s JFE Steel Corporation, aimed at strengthening its balance sheet and funding its long-term capacity expansion plans.

The proposed partnership centers on the steel-making assets of Bhushan Power & Steel Ltd. (BPSL), which JSW Steel acquired through insolvency proceedings in 2021.

Under the plan, BPSL’s steel assets will be transferred into a new 50:50 joint venture between JSW Steel and JFE Steel. JFE will acquire its stake by investing Rs. 15,750 crore into the JV.

Key Highlights

• JSW Steel plans a 50:50 JV with Japan’s JFE Steel using BPSL assets
• Deal to cut consolidated net debt by Rs. 37,250 crore
• Cash inflows to fund domestic expansion plans through 2031

To facilitate this, the assets will first be transferred via a slump sale to a JSW Steel subsidiary for Rs. 24,483 crore, following which the JV structure will be implemented.

The transaction is expected to generate cash inflows of Rs. 32,350 crore, which will significantly improve JSW Steel’s financial position. As a result, the company’s consolidated net debt is projected to decline by Rs. 37,250 crore, providing substantial balance sheet relief. This deleveraging is expected to enable JSW Steel to accelerate domestic capacity expansion plans through 2031, aligning with its long-term growth strategy in India’s steel sector.

Despite transferring the assets into the JV, JSW Steel will retain a 50 percent ownership, allowing it to participate fully in the future growth and value creation of the BPSL business. The partnership also brings in JFE Steel’s global technical expertise and operational know-how, which is expected to enhance efficiency, product quality, and competitiveness.

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JSW Steel’s management described the transaction as strategically sound, highlighting its role in reducing leverage, unlocking capital, and positioning the company for sustainable long-term growth while sharing future upside with a global steel major.