Jindal Steel And Power Promoters In Talks To Raise Big Bucks, Delisting On The Table: Report

Jindal Steel and Power promoters, led by industrialist Naveen Jindal, are in preliminary discussions with global private credit funds and foreign banks to raise up to $3 billion (₹25,000 crore).

What Happened? The promoters are potentially looking to increase promoter holdings and explore the option of delisting the company, sources told Economic Times. The talks are at an early stage and no transaction is guaranteed, the sources said.

The Jindal family has seen its shareholding in Jindal Steel, one of India’s largest steel companies, has seen an 0.8% percentage-point growth to 61.2% stake since the previous year’s June quarter.

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Benefitting from a favorable steel price environment in recent years, Jindal Steel reported an EBITDA of ₹15,513 crore in FY22, which dropped slightly to ₹9,935 crore in FY23. Analysts at ICICI Direct estimate that the company will clock ₹11,687 crore in EBITDA for FY24.

Thanks to Jindal Steel’s recovery and expansion plans within India, its share price has surged 82% over the past year, outperforming peers such as Tata Steel and JSW Steel. While JSPL has been in the spotlight, Naveen Jindal’s privately held businesses have also been expanding, with an estimated EBITDA of around ₹6,000 crore in FY23.

Previously, JSPL sold its Oman-based subsidiary, Jindal Shadeed Iron and Steel LLC, to Vulcan Steel, a company linked to Naveen Jindal, for $1 billion (₹8,200 crore). Additionally, Jindal Power, another JSPL entity, was sold to Worldone Private, also connected to Naveen Jindal, for ₹7,401 crore. Jindal Power currently operates thermal power assets in Raigad, with plans for further thermal and hydropower projects in India, as well as thermal power assets in Africa.

Furthermore, Naveen Jindal reportedly intends to establish significant renewable energy assets through privately-owned entities, with an agreement set to be signed with the Andhra government for renewable energy investments.

Price Action: Jindal Steel and Power’s share price was trading flat at market open on Monday, down 0.016% at ₹641.50.

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