IBC acquisitions contribute Rs 323 crore to JSW Steel’s Q1FY22 profits

As JSW Steel registered the highest ever quarterly revenue from operations of Rs 28,902 crores and highest ever Profit after Tax (including subsidiaries, joint ventures and associates) of Rs 5,900 crores for the April-June 2021-22 quarter, it is pertinent to know if the company is reaping the benefits of acquisitions through Insolvency and Bankruptcy Code (IBC).

It’s two acquisitions performed ‘satisfactorily’, according to the company. During the quarter, the joint ventures operations — Bhushan Power & Steel and JSW Ispat Special Products Ltd – accounted for Rs 323 crore of the company’s total consolidated profit of Rs 5,900 crore.

Bhushan Power & Steel reported Rs 745 crore profit in the first quarter of the current financial year. It produced 0.69 million tonne (MT) steel and sold 0.48 MT during the quarter. It has an annual capacity to produce 2.5 MT crude steel.

JSW Ispat Special Products reported Rs 1,469 crore revenue in the April-June quarter, which is 146% more than in the same quarter last year. The company posted a profit of Rs 63 crore during the first quarter of 2021-22 against a loss of Rs 154 crore in the same quarter last year.

Production and Sales  of Crude Steel (million tonnes)  in April-June quarter

JSW Steel acquired Bhushan Power and Steel through a Corporate Insolvency Resolution Process under the Insolvency and Bankruptcy Code. On March 26, 2021 the Company completed the acquisition of BPSL by implementing the resolution plan approved under IBC.

JSW Ispat Special Products, formerly Monnet Ispat & Energy Limited (MIEL), acquired jointly by a consortium of Aion Investments Private Limited (AION) and JSW Steel Limited in August 2018 after through an insolvency process.

The company’s effective stake in JSW Ispat Special Products Ltd is 23.1% and in Bhushan Power and Steel Ltd (BPSL) is 49%.

Also See: The turnaround story of Monnet Ispat and Energy