JSW’s 19,700 Bhushan Blow: What has aroused it and what we know so far

JSW Steel may have to delete its 19700 rupees in BHUUSHAN Power & Steel Ltd (BPSL), after the Supreme Court announced that the acquisition of 2021 is illegal and ordered the company to liquidate. The decision caused JSW shares to 5.5 % on Friday to 972.15 dollars, and can fly 10-15 % of the company’s production capacity and about 10 % of the unified Ebitda.

JSW Steel acquired BPSL as part of the aggressive expansion plan and invested 3,500-4,500 crores after acquiring the capacity of the capacity of 2.75 million metric tons. The plans were present to raise them to 10 tons built by 2030-1031.

CLSA noticed that BPSL represents 10-11 % of Ebitda Fy25-27 from JSW and highlighted an investment of $ 800/tons made for 3.5 million tons of capacity. Morgan Stanley described the referee as “material negative”, pointing to the main BPL role in the JSW growth strategy.

What happened:

Supreme Court ruling: The Apple PEPL Filter, describing JSW Steel, ordered unbelievable acquisition.

Why was the deal canceled:

• JSW used an optional convertible stock and products (OCDS) in violation of IBC standards.
• The decision plan has not been implemented within the IBC time tables.
• The COC Committee (COC) and the decision -maker failed in their legal duties.

Financial effect:

• JSW may face a shortage of benefits, taxes, destruction and consumption 4,000 -4,500 rupees in the fiscal year 25.
• BPSL represents more than 13 % of JSW production and 10 % of Ebitda.
• The company may need to delete an investment of 19,700 rupees completely.

Market reaction:

The shares decreased sharply. The JSW market value decreased to 2.37 rupees.

The company’s response:

JSW said it would review the matter with legal advisers before specifying the following steps.

Wide effects:

• It raises serious concerns about the credibility of the insolvency process.
• It can affect the investor’s confidence in the future acquisitions of troubled assets.