JSW Steel Faces Expansion Challenges After Supreme Court's Decision

Sajjan Jindal-led JSW Steel may encounter significant hurdles in achieving its expansion goals and maintaining its revenue forecasts, following the Supreme Court's rejection of its resolution plan for Bhushan Steel and Power Ltd (BPSL), analysts have pointed out.

Production and Financial Implications

The company could see a reduction in production by approximately 10% and may need to adjust its capital expenditure plans due to the substantial payments made to BPSL's creditors. The Supreme Court criticized the resolution process for violating the Insolvency and Bankruptcy Code (IBC), leading to BSPL's liquidation.

Impact on JSW Steel's Growth Plans

JSW Steel's acquisition of Bhushan Power & Steel in 2019 was a key part of its strategy to reach a 45 MTPA capacity by 2030. The loss of BPSL, which contributes around 10% to JSW Steel's production, could strain its financials and delay expansion projects.

Looking Ahead

Despite the setback, JSW Steel may focus on other investments in Odisha, including a proposed 5 MT plant with POSCO and a 13.2 MT greenfield facility. However, analysts caution that the company will need to reassess its expansion and capex strategies in light of the recent developments.