JSW Steel’s mega fundraising: To raise $1 billion in overseas bonds, Rs 10,000 crore in India NCDs

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Published: July 27, 2019 1:51:03 PM

JSW Steel has announced a mega fundraising plan to garner about Rs 17,000 crore in debt securities, including up to $1 billion in fixed-rate bonds in the overseas markets.

steel, JSW Steel, fundraising,non-convertible debt, bonds, loan repayment, capital expenditureJSW Steel has planned to raise non-convertible debts up to Rs 10,000 crore from the Indian market. (Bloomberg image)

JSW Steel has announced a mega fundraising plan to garner about Rs 17,000 crore in debt securities, including up to $1 billion in fixed-rate bonds in the overseas markets, mainly to retire short-term loans and meet capital expenditure, it said on Friday. One of the largest steel companies of India, JSW Steel has also planned to raise non-convertible debts up to Rs 10,000 crore from the Indian market. Funds from the domestic market are aimed to replace short term loans, meet long term working capital requirements and to reimburse for the capital expenditure already incurred. 

“At this time, there are two possible reasons for JSW to raise funds. One is to compensate for the capital incurred in buying stakes in companies like Monnet Ispat and BSPL and to arrange the operating cost. The other reason is to improve the debt-to-equity ratio, which is mostly higher in steel companies,” Ramesh Iyer, product head, steel, Indian Commodity Exchange (ICEX). He also said that falling steel prices may also have added to the cause.

JSW has recently commissioned a tin-plate plant with an investment of around Rs 575 crore and has underlined the plans to further increase its capacity with an investment of Rs 490 crore. Apart from this, JSW Steel also bought Monnet Ispat with an investment of over Rs 2,800 crore. After having these additional plants, the company requires additional funds for sustainable and smooth operations and further expansion.

In April, JSW Steel raised $500 million to reduce debt and to generate capital expenditure. Subdued steel demand in the country and fall in prices have brought down the net profit of the company by 57 per cent to Rs 1,028 crore in the first quarter of the current financial year. 

 

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