JSWSTEEL

Transfers BPSL to JV, Debt Falls Sharply

’s 50:50 joint venture with Japan’s JFE Steel for Bhushan Power & Steel Ltd (BPSL) marks a strategic milestone. The deal helps JSW deleverage and fund its ₹76,000 crore capex pipeline, while JFE gains a meaningful India entry with technology integration. With expansion potential up to 15 mtpa, the JV offers multi-year upside despite valuation concerns. JFE, which invested ₹4,800 crore in JSW in 2010 (now worth ~₹42,000 crore), will co-own BPSL. JSW acquired BPSL in 2021 via bankruptcy proceedings, with legal uncertainty resolved by the Supreme Court in September 2025. BPSL’s current capacity is 4.5 mtpa, up from 2.75 mtpa at acquisition. BPSL assets will be transferred to JSW Kalinga Steel JV at an enterprise value of ₹53,100 crore. JFE will infuse ₹15,750 crore equity for its 50% stake, matched by JSW via a non-cash transaction. The JV will raise ₹16,600 crore fresh debt and assume ₹5,000 crore of JSW’s debt linked to BPSL. - Valuation and Expansion Potential Nuvama estimates BPSL at 12.4x FY28E EBITDA, higher than JSW’s 8.5x. JFE is comfortable paying a premium given the plant’s potential to expand to 10–15 mtpa at relatively low cost, supported by its advanced steelmaking technology. JSW’s debt will fall to ~₹43,000 crore from ₹79,000 crore, reducing net-debt-to-EBITDA to ~3x. This deleveraging supports execution of ₹76,000 crore projects, raising capacity to 43.4 mtpa by FY28 and 50 mtpa by FY31. JSW’s shares are up 24% in 2025, outperforming the Nifty Metals index (+17%). Investors will track JV funding progress and order inflows. While H1FY26 EBITDA rose 42% on higher volumes, earnings remain vulnerable to steel price volatility.