Steel Industry

After various rounds of discussions and negotiations, JSPL and its transaction advisors have successfully negotiated a revised and improved binding offer from Worldone accommodating all of the investor feedback received by the Company. The key highlights of the revised Offer are that Worldone will buy out all the Equity Shares and Redeemable Preference Shares of JPL held by JSPL.

With a budgetary outlay of Rs 6,322 crore, the PLI scheme would cover coated/plated steel products, high strength/wear resistant steel, specialty rails, alloy steel products, steel wires, and electrical steel. The scheme is expected to bring in investment of approximately Rs 40,000 crore and capacity addition of 25 MT. The duration of the scheme will be 5 years, commencing from 2023-24 to 2027-28.

The ongoing steel upcycle will also mean stronger-than-expected realisations over the medium term. Consequently, acquirers may see 20% faster payback and are well set to tap the brownfield potential housed under these assets. This is as per a CRISIL study of five stressed steel capacities, totalling 21 million tonne (MT), which were acquired under NCLT-1, mostly by other primary steel producers.

"This is to inform you that the Board of Directors of NMDC Ltd, at its meeting held today, July 13, 2021, has approved the Scheme of Arrangement for Demerger between NMDC Ltd and NMDC Steel Ltd ('Resulting Company') and their respective shareholders, pursuant to Sections 230 to 232 and other applicable provisions of the Companies Act, 2013," the NMDC said in a regulatory filing.

JSPL's steel production during the April-June quarter of the fiscal surged 20% y-o-y to 2.01 million tonnes (June 21 - 0.64 million tonnes), marking a record first quarter production and second highest quarterly production ever. The company said that the decision to divert oxygen towards saving precious lives led to production getting impacted slightly, still it was able to produce more than before.

While this will drive steelmakers to double down on capital expenditure, robust accruals will help them continue deleveraging and strengthening of balance sheets, leading to a positive credit outlook, a CRISIL study of the top five steelmakers - accounting for 58 per cent of domestic production last fiscal has showed.

Besides, ICRA expects domestic demand to recover in the coming months with the gradual lifting of lockdowns and mobility restrictions in India during June 2021 and improving vaccination coverage. This trend in turn will result in a pick-up in capacity utilisation levels, the agency said.

The improvement was driven by supply-chain efficiencies, higher exports, and captive mines that limited the impact of iron ore shortage. Their capacity share is expected to rise this fiscal after JSW's Dolvi plant expansion of 5.6 million tonne comes on stream, the report added.