JSW Ispat to merge with JSW Steel

Sajjan Jindal group’s flagship company JSW Steel, on Saturday, announced that it will merge JSW Ispat with the company at a 1:72 ratio by the end of the current fiscal.  This effectively means a share of JSW steel for 72 shares of JSW Ispat.

Briefing reporters, JSW Steel Chairman & Managing Director Sajjan Jindal said: “This gives us an opportunity to do brownfield expansion in Vijaynagar and Dolvi Maharashtra plant, while Vijaynagar will concentrate on southern part of India.”   

Post merger, Japan’s JFE Steel’s equity stake in JSW Steel is down to 14.92 per cent.  Replying to a question, Jindal said: They have the approval (of JFE) to bring in more cash and take their stake back to 15 per cent.

With this merger, JSW Steel will emerge as the second largest domestic steel producer, with a 14.3 million tonne per annum (mtpa) production capacity, next only to the public sector state-owned Steel Authority of India (SAIL).

It may be noted that the country’s other largest integrated private steel producer, Tata Steel’s total capacity within the country stands at 6.8 mtpa. As on June 30, JSW Steel has 46.75 per cent stake in JSW Ispat, while the erstwhile promoters, Pramod and Vinod Mittal hold less than 20 per cent stake. Post merger, promoter Jindal’s stake in the merged entity will come down to 35.12 per cent, while JFE Steel’s to 14.92 per cent and the remining 49.96 per cent with the investing public.