JSW Steel to raise Rs 7k cr for BPSL acquisition

Indian steel major JSW Steel is planning to raise Rs 7,285 crore to fund its acquisition of the Bhushan Power & Steel (BPSL) and refinance loans.

Sources told the media that talks with the company on the structure of the offering are ongoing, and necessary approvals are being sought from the Reserve Bank of India (RBI). Bankers said the company is awaiting the Supreme Court's order on its BPSL acquisition and will use the proceeds from the dollar bonds for the acquisition.

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The acquisition is backed by major tailwinds in terms of a significant surge in steel prices and higher output, JSW Steel reported higher revenues in the third quarter of the year: Rs 19,329 crore of revenue and profit of Rs 2,829 crore in the October-December quarter. Its share is trading at Rs 410 apiece, giving it a total market valuation of Rs 99,420 crore. JSW is acquiring Bhushan Power for Rs 19,700 crore after BPSL was sent for debt resolution under the Insolvency and Bankruptcy Code (IBC). Bankers said several other companies are looking at the dollar bond route to raise funds before the financial year ends next month.

Like the rest of the industry, JSW is witnessing strong growth in the automotive sector, led by passenger vehicles, two-wheelers, and tractors. The recovery in residential real estate and continued traction in commercial real estate is also helping the industry.

Image: JSW  share is trading at Rs 410 apiece, giving it a total market valuation of Rs 99,420 crore 

Also read: JSW reports revenue growth of 22% in Q3 FY21