The Supreme Court (SC) of India has annulled the takeover of Bhushan Power and Steel Ltd (BPSL) by JSW Steel Ltd, citing irregularities in the insolvency resolution process. The SC found that JSW Steel had altered the terms of its bid, delayed payments, and reneged on its commitment to pay off operational creditors. The Committee of Creditors (CoC) and the Resolution Professional (RP) were also criticized for their handling of the case. The SC’s decision has raised questions about the effectiveness of the Insolvency and Bankruptcy Code (IBC) and the role of the Insolvency and Bankruptcy Board of India (IBBI) in regulating the resolution process.

The BPSL case began in 2017, when the Reserve Bank of India forced banks to subject 12 big defaulting corporate borrowers to the IBC pathway. Eight years later, several cases remain unresolved, and the BPSL case has joined their ranks. The SC’s decision has been criticized for its apparent disregard of alternative remedies that could have penalized offenders without causing significant harm to economic value and the reputation of India’s insolvency resolution process.

The IBBI, the relevant regulator, was not held accountable for its ineffective oversight of the resolution process. The SC’s decision has raised questions about whether the IBC process needs to be overhauled to prevent such setbacks. Some have suggested that the IBBI should be strengthened to become a true regulator, rather than just a framer of bylaws. Others have proposed adopting a US-style model, where the incumbent management is given a chance to revive the company under court supervision.

The SC’s decision has also highlighted the need for integrity and efficiency in the insolvency resolution process. The case has shown that poorly used assets need to be shuffled into more capable hands quickly, and that the judiciary should prioritize penalizing fraudsters rather than ripping up already built assets. The answers to these questions are not straightforward, but it is clear that the IBC process needs to be reformed to prevent such setbacks and ensure that insolvency resolution is done speedily and efficiently.

Overall, the SC’s decision in the BPSL case has significant implications for India’s insolvency resolution process and highlights the need for reform. The case has shown that the IBC process is not foolproof and that there are gaps that need to be addressed. The government and regulatory bodies need to take steps to strengthen the IBBI and ensure that the insolvency resolution process is transparent, efficient, and effective. This is essential for maintaining investor confidence and ensuring that India’s economy remains dynamic and competitive.

Nikita Saxena has been appointed as the Head of Digital Marketing at JSW Steel, a significant development in her career. Prior to this appointment, Saxena spent seven years at Mindshare, where she held the position of Senior Media Director. The announcement was made by Saxena herself on LinkedIn, a professional networking platform.

With over a decade of experience in the industry, Saxena brings a wealth of knowledge and expertise to her new role. Her areas of specialization include digital strategy, media planning and buying, and e-commerce. Throughout her career, she has had the opportunity to work with a range of reputable organizations, including Neo@Ogilvy, Interactive Avenues, Starcom Mediavest Group, and Impetus Infotech India.

Saxena’s appointment as Head of Digital Marketing at JSW Steel marks a significant milestone in her career, and it is likely that she will play a key role in shaping the company’s digital marketing strategy. With her extensive experience and expertise in digital marketing, she is well-equipped to drive business growth and success in the industry.

As a seasoned professional, Saxena has developed a strong understanding of the digital landscape and has a proven track record of delivering successful digital marketing campaigns. Her expertise in media planning and buying, as well as e-commerce, will be invaluable to JSW Steel as the company looks to expand its digital presence and reach new customers.

Overall, Nikita Saxena’s appointment as Head of Digital Marketing at JSW Steel is a significant development in the industry, and it will be interesting to see the impact she makes in her new role. With her wealth of experience and expertise, she is well-positioned to drive business success and growth in the digital marketing space. As she begins her new role, Saxena is likely to be focused on developing and implementing a comprehensive digital marketing strategy that aligns with JSW Steel’s business objectives and drives long-term success.

POSCO Group, a South Korean steelmaking giant, aims to enhance its competitiveness in the global steel market and energy value chains through collaborations with international peers, according to its chairman. During a three-day visit to Australia, POSCO Group Chairman Chang In-hwa met with Jayant Acharya, CEO of India’s JSW Steel, and Liu Jian, chairman of China’s HBIS Group, to discuss joint venture opportunities and technological collaborations. The meetings focused on accelerating the development of low-carbon production processes and expanding demand.

Notably, Chang and Acharya discussed their ongoing project to build an integrated steel mill in India, which was announced last October. The facility will have an annual capacity of 5 million tons. The World Steel Association named POSCO as one of 14 Steel Sustainability Champions for its work in 2024, acknowledging its efforts to reduce carbon emissions and improve sustainability.

Chang also toured Senex Energy’s gas fields in Queensland, Australia, which POSCO International Corp., the company’s general trading and energy exploration unit, acquired in 2022. Senex Energy is focused on gas and oil exploration, crude oil production, and oil pipeline transportation. The company aims to triple its natural gas production by 2026, which will supply approximately 10% of eastern Australia’s domestic demand.

The chairman’s visit to Australia highlights POSCO’s commitment to strengthening partnerships and exploring new opportunities to drive growth and sustainability in the steel and energy sectors. By working with international partners, POSCO seeks to expand its global footprint and reduce its environmental impact.

Fitch Ratings has downgraded the rating headroom for India’s steel giants, JSW Steel Limited and Tata Steel Limited, due to the challenges posed by cheap steel imports from China and the potential impact of aggressive tariff policies from various economies, including the US. The agency expects domestic steel prices to come under pressure in the financial year ending March 2026. JSW Steel’s current rating stands at BBB-/Negative, while Tata Steel’s is at BB/Stable.

Fitch expects both companies to breach their negative sensitivity thresholds for EBITDA leverage in FY25, with JSW surpassing 3.7x and Tata exceeding 3.0x. The outlook for FY26 remains bleak, with expectations of continued margin pressures. However, Fitch expects some recovery due to sustained domestic demand growth, a decline in key input costs, and China’s efforts to cut steel production.

To mitigate these challenges, Fitch notes that both companies have the flexibility to defer certain capital expenditures, creating financial buffers. The agency forecasts that both companies may return to mid-cycle margin levels by FY27, contingent upon the resolution of current pressures. However, sustained margin weakness is a key risk to the ratings. Tata Steel is also grappling with execution risks linked to the restructuring of its European operations, making it more vulnerable to state mining taxes.

A potential lifeline for the steel giants is the possibility of Indian government measures to shield domestic steelmakers from cheaper imports, such as imposing anti-dumping duties, which could positively affect their margin projections. The agency notes that the timing and scale of such measures remain uncertain and will depend on the government’s efforts to balance the interests of steelmakers and consumers. India’s steel demand is expected to grow by around 10% in FY26, driven by robust public spending and demand from the construction, infrastructure, and manufacturing sectors.

According to a recent HDFC Securities report, India’s steel sector has been experiencing significant growth, outperforming other major economies in the world. The sector has consistently demonstrated double-digit growth in recent years, a stark contrast to the demand contraction seen in most global markets. This growth has been driven by various factors, including rapid economic expansion, infrastructure development, and urbanization, among others.

The report highlights India’s steel sector as one of the fastest-growing in the world, with production and consumption levels increasing significantly. Furthermore, the sector’s growth has been driven by both domestic and foreign investments, with global majors such as POSCO and JSW Steel setting up facilities in the country.

Despite this growth, the report notes that falling steel prices have not been favorable for the sector’s profitability. The price slump has stemmed from a global oversupply of steel, leading to a decline in prices and profit margins for Indian steel producers. This has resulted in a decrease in the sector’s profitability, making it challenging for companies to maintain their earnings.

The HDFC Securities report attributes the price drop to various factors, including overcapacity in the global market, high inventory levels, and the impact of trade tensions and tariffs. The report warns that this trend may continue in the short term, making it crucial for steel companies to adapt and diversify their operations to stay competitive.

To mitigate the impact of falling prices, Indian steel companies are focusing on increasing their domestic capacities, improving efficiencies, and diversifying their product offerings. Additionally, the government’s initiatives to promote the use of domestically produced steel in infrastructure projects are expected to benefit the sector in the long run.

In conclusion, while the Indian steel sector has been growing rapidly, the current price slump poses a significant challenge for the industry. To maintain their competitiveness, steel companies must focus on increasing domestic production, improving efficiency, and diversifying their product lines. Additionally, the government’s support for the sector will be crucial in promoting domestic production and reducing reliance on imports, ultimately driving growth and creating more opportunities for the Indian steel sector.

A court in New Delhi has discharged JSW Steel Ltd, formerly known as Monnet Ispat, in a case related to alleged irregularities in the allocation and running of two coal blocks in Chhattisgarh. The court’s decision comes after JSW filed a discharge plea, citing immunity granted under the law, as the company took over Monnet Ispat under the Insolvency and Bankruptcy Code (IBC).

The case dates back to September 2012, when the Central Bureau of Investigation (CBI) filed a case against JSW and others related to the alleged irregular allocation of coal blocks between 1993 and 2005. The coal blocks in question, Gare Palma and Rajgamar Dipside, were allegedly allocated to JSW’s predecessor, Monnet Ispat, without a transparent bidding process.

However, under the IBC, JSW was able to take over Monnet Ispat through a resolution process, which granted the company immunity from prosecution. The adjudicating authority approved JSW’s application to take over Monnet Ispat, and the court has now discharged JSW from the case.

This decision is significant, as it marks another instance of a company being able to escape criminal prosecution under the IBC. The IBC has been criticized for providing an easy exit route for companies involved in financial wrongdoing, and cases like this one have raised concerns about the lack of accountability in the country’s corporate sector.

The discharge of JSW also raises questions about the effectiveness of the CBI’s investigation into the coal block allocation scam. The CBI had filed multiple cases against various companies and individuals involved in the scam, but many of these cases have since been closed or discharged due to various reasons.

Overall, the discharge of JSW Steel Ltd in the coal block allocation case highlights the challenges in holding companies accountable for financial wrongdoing in India, and the need for a more robust regulatory framework to prevent such cases in the future.

JSW Steel has reported its crude steel production for May 2024, posting a production of 20.98 lakh tonnes, which is a 4% year-on-year (YoY) decline. This figure is lower compared to the 21.67 lakh tonnes produced in May 2023. Despite the decline, the production volume for the month is still relatively stable compared to the previous month, when the company produced 20.85 lakh tonnes. The YoY decline is likely due to various factors such as raw material supply chain disruptions and fluctuations in demand. However, JSW Steel has been working to optimize its operations and improve productivity, which has helped the company maintain its production levels overall. The company’s production figures for May 2024 are in line with market expectations, and investors will be monitoring the company’s performance closely as it looks to increase its steel production and profitability in the coming months.

Tata Steel and JSW Steel, two of India’s largest steel companies, are facing a challenge from rising Chinese imports. The COVID-19 pandemic had led to a surge in demand for steel in India, resulting in a significant increase in prices and profits for the steel industry. However, with the pandemic under control, demand has slowed down, and prices have fallen. Meanwhile, Chinese steel exports have increased, posing a threat to Indian steel companies.

According to data, China’s steel exports to India have risen by 34% in the first quarter of 2022 compared to the same period last year. This has led to a decline in Tata Steel’s and JSW Steel’s profits, with the companies’ cash piles shrinking. Tata Steel’s cash and cash equivalents stood at Rs 22,300 crore in the first quarter of 2022, down from Rs 31,400 crore in the same period last year. JSW Steel’s cash and cash equivalents declined to Rs 14,300 crore from Rs 18,400 crore over the same period.

The rise in Chinese imports is expected to continue, posing a challenge to Indian steel companies. The companies are likely to face pricing pressure and may need to reduce production to maintain profitability.

Indian steel giant, JSW Steel, has seen its $151 million coal deal in Mozambique frozen due to a legal dispute. The deal, closed in 2017, was to acquire coal from Riversdale Mining, a Mozambican company, to fuel its Indian operations. However, the Mozambican government has been challenged in court by a local company, Montepuez Ressureição, which claims the deal was illegal. The local company alleges that the government did not follow proper procedures when selling the blocks of coal and that the deal was not transparent. The court has suspended the deal, citing irregularities. JSW Steel has denied any wrongdoing and is seeking to resolve the issue. The dispute has left the Indian steel giant in a precarious position, as it needs the coal to meet its production needs. The row highlights the challenges faced by foreign investors in Mozambique, where corruption and poor governance can make deals vulnerable to legal challenges.

India’s largest steelmaker, JSW Steel, has been sidelined by a legal dispute over a coal concession in Mozambique. The company had agreed to buy Minas de Revuboè (MdR) in May, but the Mozambican government revoked the license and awarded it to Stonecoal SA, which is directed by four employees of JSW Steel’s rival company, JSPL. The dispute has led to a legal battle between MdR and Mozambique’s government, with MdR seeking to have the original concession reinstated. The issue is significant for Mozambique, which is facing civil unrest and a deepening economic crisis. The deal was valued at $50 billion and would have provided a major boost to Mozambique’s economy. The dispute has also impacted India’s steel industry, as JSW Steel is one of the country’s largest steelmakers and needs to source large volumes of coking coal and iron ore for its operations. The dispute is set to continue, with MdR seeking to have its concession restored and JSW Steel trying to salvage the deal.

India’s largest steelmaker, JSW Steel Ltd, has been affected by a legal dispute over a coal concession in Mozambique. The company agreed to buy Minas de Revuboè (MdR) from the estate of Ken Talbot, an Australian mining tycoon, in May. However, the Mozambican government revoked MdR’s lease, citing a lack of exploration works. The government then offered the concession to Stonecoal SA, which has four directors employed at JSW’s sister company, JSPL. The dispute has triggered a legal battle between MdR and the Mozambican government, with MdR seeking to have the original concession reinstated. The company has also initiated arbitration proceedings in Geneva. The dispute comes at a critical time for Mozambique, which is facing civil unrest and disputed elections. The outcome of the dispute will impact JSW’s plans to mine more coking coal and iron ore, which are essential for its steel operations. The company has spent $300 million on the project and is seeking to complete the sale to JSW.

JSW Steel Limited has received a notice from the Office of Assistant Commissioner of Central Tax, Hosapete Division, demanding a tax amount of ₹1,29,36,981 along with interest and penalty of ₹1,24,72,581 and ₹1,29,36,891, respectively. The matter dates back to FY 2017-18, when the company suo-moto reversed Input Tax Credit (ITC) on a monthly basis and then reclaimed excess ITC in July 2019. However, the reclaim was disallowed due to being made beyond the allowed time limit under Rule 42 (2) (b) of the CGST Rules, 2017. The company plans to challenge the order by filing an appeal. This information was disclosed under Regulation 30 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

ICICI Securities has upgraded Tata Steel and JSW Steel to a “Buy” rating, citing improvement in the profitability and cash flow of the steel industry. The brokerage firm has also kept its overweight call on the metal sector, citing factors such as demand revival, production cuts, and consolidation in the industry. ICICI Securities expects the sector to continue its upward momentum, driven by increased demand, cost control measures, and improving corporate profitability. The top picks in the sector, according to ICICI Securities, are Tata Steel, JSW Steel, and Hindalco Industries. The firm has also listed top avoided stocks as Steel Authority of India (SAIL) and Nippon Denro Opco (formerly known as NMDC). Overall, ICICI Securities is optimistic about the metal sector’s prospects, citing expectations of a metal price uptick, reduction in inventory levels, and improvement in realizations.

Sajjan Jindal, Managing Director of JSW Steel, is leading the company’s efforts to expand in the electric vehicle (EV) market. JSW is in talks with multiple auto majors, including Chinese company Geely, to form joint ventures for EV production. The company is also working on launching its own EV lineup, including passenger and commercial vehicles. The partnership with SAIC, the parent company of MG Motor, is not exclusive, and JSW is free to explore other partnerships to expand its presence in the auto sector. The lack of majority stake in MG Motor India could be a sticking point, as SAIC holds 49% of the company, while JSW owns 35%. JSW has been in discussions with other companies, including Ford and Volkswagen, but no deals have been confirmed. The company is betting big on the Indian EV market and is aggressively pursuing multiple opportunities to gain a strong foothold.

JSW Steel has completed a restructuring process in the US, merging two subsidiaries, Purest Energy LLC and Caretta Minerals LLC, into their respective holding companies, Periama Holdings LLC and Planck Holdings LLC. This move aims to simplify operations, reduce complexity, and strengthen the company’s market presence in the US. The restructuring process does not involve the sale of any overseas assets or changes to the shareholding pattern, as the affected subsidiaries were wholly owned.

The merger is expected to improve operational efficiency, financial consolidations, and regulatory compliance, while reducing redundancies and overhead costs. The two merged companies operated in coal mining and met coal production in West Virginia, with Caretta Minerals reporting a revenue of approximately Rs 72 crores in FY23. JSW Steel plans to focus on simplification and streamlining its group structure to improve business operations and drive growth.

The company intends to expand its operations further, aiming to reach a production capacity of 50 million tonnes by FY31. With strong growth expectations, JSW Steel is optimistic about its future performance. The restructuring is an important step in the company’s efforts to strengthen its US market presence and build a more efficient and robust business model.

According to Nuvama Research, Vedanta will be severely impacted by future volumes from Karnataka mines. The company will need to pay a 3x royalty rate of 15% as well as a Rs 100 per tonne tax on iron ore. In contrast, NMDC will only need to pay a Rs 100 per tonne tax and an additional 22.5% tax on the Indian Bureau of Mines (IBM) price of iron ore. Nuvama suggests that Vedanta may struggle to pass on the entire increase in costs to customers. JSW Steel, which operates captive mines, will only need to pay a low Rs 100 per tonne tax. However, the company may still be indirectly affected by higher prices from NMDC and other miners. Overall, the new taxes and royalty rates are likely to have a significant impact on Vedanta’s profits and operations.

India is likely to impose a “safeguard duty” or temporary tax of up to 25% on steel imports to curb cheap imports from China, according to industry and government sources. The decision was made following a meeting chaired by Commerce Minister Piyush Goyal, where small industries dropped their opposition after being assured they would not be hit by higher steel prices. Small manufacturers, who consume around 1 million metric tons of steel annually, are expected to benefit from the arrangement, with prices around 20% lower than market rates. Major steel producers such as JSW Steel, Tata Steel, and ArcelorMittal Nippon Steel India have raised concerns about cheaper imports from China. The import of steel has surged to a record high in the current financial year, with India becoming a net importer of the alloy. The government is investigating whether cheap imports from China have harmed domestic steelmakers and will impose the temporary tax once the investigation is complete.

JSW Steel, an Indian steel giant, has formed a strategic partnership with South Korea’s POSCO (Pohang Iron and Steel Company) to collaborate on various business areas. As part of the partnership, the companies will jointly operate a 6 million tons per annum steel plant in India. Additionally, JSW Steel will supply automotive-grade steel to POSCO’s affiliates in South Korea and Europe. The duo will also work together in the development of electric vehicle (EV) batteries and renewable energy projects.

The Enforcement Directorate (ED) attached Bhushan Power’s assets under the Prevention of Money Laundering Act (PMLA) due to alleged fraud and money laundering by the company’s promoters. The Committee of Creditors (CoC) challenged the attachment during the corporate insolvency resolution process (CIRP) under the Insolvency and Bankruptcy Code (IBC), claiming it violated IBC protections. The National Company Law Tribunal (NCLT) and National Company Law Appellate Tribunal (NCLAT) approved JSW Steel’s resolution plan, vacating the ED’s attachment. The ED appealed to the Supreme Court, opposing the plan and claiming that the benefit of Section 32A of the IBC would not apply. In December, the ED filed an affidavit stating that, without prejudice to its rights, it would allow JSW Steel to take control of the attached properties. The Supreme Court granted permission, directing the ED to hand over control of the properties to JSW Steel. The case involves a complex interplay between insolvency proceedings under the IBC and asset attachment under the PMLA.

Lancy Varghese, Company Secretary and Compliance Officer of JSW Steel Limited, has resigned from his position effective December 23, 2024. He will be pursuing an alternative career opportunity outside the JSW group. The company has acknowledged his dedication and commitment over his 25-year tenure and wishes him well in his future endeavors. Lancy expressed gratitude to the Board of Directors, management, colleagues, and stakeholders for their support and cooperation during his time at the company. His resignation is disclosed under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The Competition Commission of India (CCI) approved four deals in a row, including JSW Steel’s subsidiary buying Thyssenkrupp Electrical Steel India for ₹4,051 crore and Abu Dhabi National Oil Company acquiring the entire stake of chemical company Covestro AG. Further, Blackstone’s associate acquired stakes in Bagmane Developers and Bagmane Rio, and purchased a chemical facility. There were also clearance for joint ventures of foreign companies participating in various deals across different jurisdictions. These acquisition deals valued at multiple million dollars include JSW and JEF Steel acquisition.

JSW Steel’s performance is expected to be impacted in Q2 FY25, with its Profit After Tax (PAT) likely to decline by 35.2% YoY to Rs. 1,550 crore, according to a report by PL Capital. Despite this, the company’s crude steel production has seen a rise, with a 6-7% year-on-year (YoY) increase in Q2 FY25, reportedly led by strong demand and more efficient production. The company’s production stood at 6.77 million tonne (MT) in Q2 FY25. While the production numbers are a positive sign, the PAT decline is attributed to various factors, including pricing pressure, raw material cost inflation, and a higher tax outgo. The company’s stock has traded positively on the basis of its forecasted production growth, indicating investor optimism about its future performance. However, the 35.2% YoY decline in PAT is a concern, and the company’s actual performance will be closely watched by the market.

Source: https://www.moneycontrol.com/