JFE's mega deal for Bhushan Steel to help JSW slash debt

In a deal that is expected to ease its stretched balance sheet while sustaining an expansion drive, billionaire Sajjan Jindal-led JSW Steel will transfer the steel assets of Bhushan Power & Steel Ltd (BPSL) into a new 50:50 joint venture with Japan’s JFE Steel Corp.

- Dipali Banka

The deal, anchored by JFE’s ₹15,750-crore commitment, is expected to nearly halve JSW Steel’s debt and ring-fence the BPSL assets under a clean JV structure. This will be the second joint venture between the two companies, the other being JSW JFE Electrical Steel.

This is one of the largest foreign direct investments by a Japanese firm in India and comes close on the heels of Sumitomo Mitsui Banking Corp. investing ₹13,483 crore for a 20% stake in Yes Bank. Other notable investments by Japanese firms in India include Daiichi’s $4.6 billion investment to acquire a 64% stake in Ranbaxy in 2008 and NTT Docomo’s $2.7 billion investment to acquire a 26.5% stake in Tata Teleservices in 2009.

In a complex transaction that is expected to be completed in the first half of FY27, JSW Steel will initially receive ₹24,283 crore in cash from a slump sale of BPSL’s steel assets to a subsidiary, JSW Sambalpur Steel Ltd, chief financial officer Swayam Saurabh said during a media briefing on Wednesday. JFE will fund ₹7,875 crore of this transaction.