desk
Share
News Topical, Digital Desk : JSW Steel has announced a new 50-50 partnership with Japan's JFE Steel Corporation. Under this agreement, Bhushan Power & Steel's (BPSL) entire steel business will be transferred to JSW Sambalpur Steel for ₹24,483 crore. JFE Steel will also invest ₹15,750 crore and acquire an equal stake in JSW Kalinga. This joint venture will further strengthen the company's steel business and help expand capacity in the coming years. However, the stock has fallen following the news. The stock opened at ₹1,162 on the morning of December 3, 2025, compared to its closing price of ₹1,162 on December 3. As soon as news of the deal broke at 2:30 pm, the stock fell 3% to ₹1,125.
Under this deal, JFE will invest a total of ₹15,750 crore in two installments and acquire a 50% stake in the JV. This values BPSL's equity at approximately ₹31,500 crore. BPSL currently has a net debt of ₹4,000–5,000 crore, so the company's total enterprise value is estimated to be approximately ₹36,000 crore. BPSL's H1FY26 EBITDA is approximately ₹1,486 crore, implying a valuation of approximately 10 to 12 times EV/EBITDA. There will be a significant change in stakes—previously, JSW Steel held 82.65%, while the promoter held 17.35%. After the deal, both JSW and JFE will hold 50% each. It is estimated that JSW Steel could receive approximately ₹10,000 crore from this deal. JSW's net debt as of September 30, 2025, was ₹79,153 crore. The market (Street) is somewhat surprised by this deal, as investors were expecting a much higher valuation for JSW's stake. This is why the Street is confused about the deal's rationale. The deal is expected to take approximately 6 to 9 months to complete, as it requires regulatory approvals and other formalities.
The company approved the JV at its board meeting on December 3, 2025, and informed both stock exchanges—NSE and BSE—about the deal. Why BPSL's steel business is special: BPSL was acquired by JSW in 2021 under the IBC process. Since then, JSW has significantly improved the company. Its crude steel capacity was previously 2.75 MTPA. JSW increased it to 4.5 MTPA, which means BPSL has been transformed from a weak state to a strong business. Big deal of 24,483 crores - The first major step in implementing the JV is that the entire steel business of BPSL will be transferred to JSW Sambalpur Steel Limited for 24,483 crores.
This transfer will be done through slump sale - JSW Sambalpur is a 100% subsidiary of JSW Kalinga. The company said that this entire process will be completed in 6-9 months after getting regulatory and shareholder approvals.
JFE Japan's investment - 15,750 crores - To make the JV equal, JFE Steel will invest ₹15,750 crores in JSW Kalinga. This investment will come in two equal parts. After the investment, the stake of JSW Steel and JFE in JSW Kalinga will be 50-50. JSW and JFE have been partners in the past as well, hence this partnership is built on trust and experience.
Read More: Open offer made on Supreme Court decision, but no deal, 0 shares accepted, know the whole matter
--Advertisement--
