JSW Steel is understood to be in the final stages of acquiring Italian steelmaker AFERPI for Rs 500-600 crore. The announcement of a signing of a memorandum of understanding (MoU) is expected in the next few days, said a source close to the development. The acquisition, according to sources, will help JSW Steel to expand its reach in the specialised steel market, especially in the automobile sector. AFERPI (Acciaierie e Ferriere di Piombino SpA), is part of the diversified Cevital Group with presence in different sectors across the world. With an annual steel production capacity of over 2 million tonne (mt), AFERPI manufactures special steels used in railway, automobile and earth-moving vehicles, among others. According to the company’s website, AFERPI is currently working on projects that involve production of 1 mt of long steel products and revamping of wire rod and bar mills, installation of one electric arc furnace of 1 mt capacity with two continuous casting machines, installation of a new rails- and beams-rolling plant and installation of the second electric arc furnace and the third continuous casting machine. An e-mail sent to JSW Steel seeking response on the story remained unanswered till the time of going to the press.

The possible acquisition of the Italian steelmaker comes at a time when JSW Steel is eyeing the purchase of a few steel assets back home as well. While the company is understood to have lost out Bhushan Steel and Bhushan Power and Steel to Tata Steel, it is believed to be in the lead to acquire Monnet Ispat. Additionally, the company has been seeing an increase in its value-added products. In April-June 2017, JSW Steel increased the sales of coated products from 28% to 32% on a year-on-year basis, while value-added products were 38% of the total sales. In the three months ended December 2017, the company said its overall value added and special products (VASP) and special products sales grew by 8% y-o-y (57% of overall sales). Also, sales to automotive customers grew by 30% y-o-y while automotive production grew by 16%. JSW Steel reported a two-fold jump in its consolidated profit after tax at Rs 1,774 crore for the quarter ended December 31, 2017. The company’s revenue from operations surged 17% y-o-y at Rs 17,861 crore during the period. The company’s net debt stood at Rs 42,068 crore as on December 31, 2017, lower than Rs 42,764 crore as on September 30, 2017.