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News: JSW Steel has informed the exchanges that JSW JFE Electrical Steel Ltd, which is a 50:50 joint venture between JSW Steel Limited and JFE Steel Corporation, will be acquiring 100% equity interest in Thyssenkrupp Electrical Steel India Pvt Ltd. This is one of the first manufacturers of grain-oriented electrical steel in India with its facility located in Nashik, Maharashtra. The company has entered into other agreements, which includes licensing/transfer of associated technology package from thyssenkrupp group. The total purchase consideration for the overall transaction is ₹4,051.4 crore.
Views: This acquisition aligns with the company’s strategy to boost its share of value-added steel products, which is margin accretive. Additionally, the government’s push for local production of electrical steel under the ₹6,322 crores speciality steel PLI scheme offers significant incentives, with electrical steel manufacturers receiving up to 12% in benefits. Thus, this acquisition will enable the company to immediately access the electrical steel market and capitalize on growth opportunities. We remain optimistic on the stock, considering the company’s ambitious expansion plans to reach 50 MTPA by 2030, superior product portfolio, and healthy profitability guidance.
Impact: Positive