JSW Steel to sell 50% in Bhushan Power and Steel to this Japanese steelmaker for ₹15,000–16,000 crore

The transaction, which could be finalized this quarter, would give JFE a 50% stake in the subsidiary and help billionaire Sajjan Jindal-led JSW pare debt or fund expansion plans, according to the executive who spoke on condition of anonymity.

The move comes after the Supreme Court in September approved India’s largest steelmaker’s ₹19,700-crore plan to take over bankrupt Bhushan Power and Steel Ltd, marking the end of one of India’s longest-running insolvency battles.

“The discussions for a second joint venture with JFE Japan has been going on for over a year now. However, the insolvency battle in the court delayed such discussion," the executive cited above said. JSW’s other joint venture with JFE Steel is JSW JFE Electrical Steel.

Responding to Mint’s queries, a JSW spokesperson said the company would not like to comment on speculation. “JSW Steel’s strategy includes evaluating various opportunities, both organic and inorganic, in India and overseas—including potential collaborations aimed at enhancing scale, efficiency, and global competitiveness," the spokesperson said.

JFE Steel, in an email response, said, “The matter has not been disclosed by our company, and therefore we will refrain from making any comments."

CNBC TV-18 first reported about JSW Steel's 50% stake sale to the Japanese steelmaker, citing sources.

JSW Steel’s net debt stood at ₹79,153 crore at the end of the July-September 2025 quarter, per data cited by the management during the post earnings call. Net debt-to-Ebitda ratio was 2.97x in the same period. Ebitda stands for earnings before interest, tax, depreciation and amortization.

“This year, absolute debt could go up or down," Swayam Saurabh, chief financial officer of JSW Steel said in a post-earnings call in October. “But what we are more positively looking forward to is holding the net debt-to-Ebitda, the leverage ratios below 3x."

According to Sumar Kumar, assistant vice-president for metals and mining at brokerage Philip Capital, the planned stake sale could be driven by JSW Steel’s high debt levels and the heavy capital expenditure lined up for its capacity expansion projects. “This move would help the company deleverage and strengthen its balance sheet," said Kumar.

The other joint venture

This would be JSW Steel’s second joint venture with JFE Steel Corporation. In May 2021, JSW Steel announced a memorandum of undertaking with JFE Steel for manufacturing grain-oriented electrical steel sheets, which are mainly used to make the core of transformers and other large electrical machinery. This led to a joint venture—JSW JFE Electrical Steel—in 2024 to set up a steel plant in Karnataka.

To be sure, in 2010, JFE Steel Corporation picked up a 15% stake in JSW Steel for ₹4,800 crore. It continues to hold this stake. The billionaire Sajjan Jindal-owned company, which was looking to reduce its debt, capped JFE’s investment at 15%.

The Bhushan Steel story

In 2017, Bhushan Steel was among the 12 big defaulters flagged by the Reserve Bank of India, owing over ₹47,000 crore to lenders.

JSW had outbid rivals including Tata Steel in 2018 to emerge as the top bidder, closing a long and contentious insolvency battle.

However, creditors such as former promoter Sanjay Singal, Kalyani Group’s Torsteel, the state of Odisha, and other stakeholders challenged the plan in multiple forums, citing irregularities and repeated delays. The issue was finally resolved by the Supreme Court two months ago in JSW’s favour.

JSW expanded Bhushan Steel’s capacity from 2.3 million tonnes per annum (mtpa) in 2017 to 4.5 mtpa in 2025. An additional 0.5mtpa capacity expansion was also planned.

Apart from this, the steelmaker has a plan to take its total capacity to 50 mtpa by 2030. At present it has a pipeline to reach 41.9 mtpa by FY28 from 34.2 mtpa currently. An upcoming electric arc furnace (EAF) project in Andhra Pradesh will take the capacity to 42.9 mtpa by FY29.

Beyond that, CEO Jayant Acharya in an earlier interaction with Mint said the company is evaluating options to expand capacity across its existing facilities at Vijayanagar, Bhushan Power & Steel, and DRI plant at Salav in Maharashtra, along with a major greenfield steel plant at Paradip, Odisha.