India’s JSW Steel will sell the steel business of its unit Bhushan Power and Steel to an equal-stakes joint venture with Japan’s JFE Steel for 244.83 billion rupees ($2.72 billion), as it seeks to fund growth.
Shares of JSW Steel - India’s biggest steelmaker by market cap - fell after the announcement on Wednesday. They closed 1.6% lower to be among the top percentage losers on the Nifty Metal index.
India’s apex court in September approved JSW’s takeover of debt-ridden Bhushan Power and Steel, capping months of legal tussle which saw a reversal of the court’s earlier decision to reject the deal.
JFE Steel will invest a total amount of 157.50 billion rupees in two tranches into the JV, JSW Steel said.
The JV will aim to expand crude steel production at integrated steelworks to 10 million tons by 2030, JFE Steel said in a separate statement.
India’s January-October iron ore imports at six-year high, JSW Steel top buyer
A separate joint venture between the two steelmakers has pledged investments to expand production of grain-oriented electrical steel.
Accelerated manufacturing activity and recovery in infrastructure spends have lifted steel demand in India since the September quarter, analysts have said.
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