Motilal Oswal Financial Services (MOSL) has reiterated its buy rating on JSW Steel, setting a target price of ₹1,350, which reflects an upside of around 18% from the current market price of ₹1,144. The brokerage said the company’s newly announced strategic joint venture with Japan’s JFE Steel marks a major restructuring step that will significantly improve JSW Steel’s leverage profile and support its next phase of capacity expansion.
Under the agreement, JSW Steel will transfer the Bhushan Power & Steel (BPSL) business into a 50:50 JV with JFE Steel. As part of the transaction, JSW Steel will receive ₹320 billion in cash consideration, strengthening its liquidity position. MOSL noted that the structure of the deal will allow JSW Steel to meaningfully reduce its consolidated borrowings.
The brokerage highlighted that the company’s consolidated debt will reduce by ₹350 billion, which includes the removal of ₹50 billion of BPSL’s existing debt from JSW Steel’s books. The JV is expected to raise ₹210 billion in debt, which will be used to pay JSW Steel as part of the settlement process.
According to MOSL, this financial deconsolidation not only lowers leverage but also enables JSW Steel to sharpen its focus on its upcoming capacity expansion cycle. The partnership is also expected to benefit from the combined operational strengths of JSW Steel and JFE Steel.
The brokerage said the overall transaction improves JSW Steel’s long-term financial position while reinforcing its strategic partnership with JFE in value-added steel products.
Disclaimer: This article is based solely on the information provided and is for news reporting purposes only. It does not constitute investment advice or stock recommendations.
