After acquiring Bhushan Power, JSW Steel eyes Neelachal Ispat

After acquiring Bhushan Power, JSW Steel eyes Neelachal Ispat
Share This :

After completing the acquisition of Bhushan Power & Steel under the insolvency law, Sajjan Jindal-controlled JSW Steel, has thrown its hat in the ring for Neelachal Ispat Nigam Ltd (NINL).

Sources said that the company has submitted an expression of interest (EOI) for NINL. The due date for EOI submission is March 29. A senior official declined to comment.

NINL is jointly owned by Central and state PSUs with MMTC, IPICOL, NMDC, OMC, as major shareholders. The government had invited EOI for disinvestment of 93.71 per cent stake in NINL to a strategic buyer, to be identified through a two-stage auction procedure.

A long steel products unit, NINL has a 1.1 million tonne capacity and produces pig iron and billets. apart, major steel like Tata Steel, AM/NS India and Vedanta-owned ESL Steel are also expected to participate in the disinvestment programme of NINL.

With the 2.5 million tonne BPSL buy, boosted its steelmaking capacity and regained its lost crown of the largest steel player in the country. That’s a spot that JSW had held till 2018, but the auction of stressed steel assets under the Insolvency and Bankruptcy Code (IBC) upset the league table when Tata Steel acquired Bhushan Steel having a capacity of 5.6 million tonnes.

Having bagged BPSL, the strategy now is to enhance its downstream capabilities and JSW is on the lookout for downstream and smaller steel companies; NINL fits into that strategy.

Also, NINL’s facility is located in the Kaliganagar Industrial Complex in Duburi, Odisha, and JSW just set foot in the state with BPSL, which has its main plant in Jharsuguda, Odisha.

Even though JSW had a small presence in Chhattisgarh through Monnet Ispat & Energy (jointly owned by AION); Monnet has been renamed JSW Ispat Special Products, the move marks a major entry into the East.

Expanding in the East, and especially Odisha, would make sense for JSW Steel, as its captive mines, won last year when the state government auctioned 19 mines, were in the state. JSW bagged four mines early 2020 by agreeing to pay 95-110 per cent premium on the ore mined. The mines have reserves of over a billion tonnes.

Additionally, there are plans to set up a 13.2 million tonnes greenfield plant in Odisha, as well. From the East, JSW would be able to service the North, as well; from a freight point of view, serving the region from the West or South – the locations for JSW’s main plants – makes it expensive.

The greenfield project, however, is most likely to be taken up after the completion of brownfield projects. In the offing, is the five-million tonne expansion at Dolvi (Maharashtra), which is expected to be commissioned before June. That would take JSW’s capacity to 26.5 million tonnes.

, After acquiring Bhushan Power, JSW Steel eyes Neelachal Ispat, Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Source link

Share This :