JSW Steel Share Price Hits 52-Week High, Plans $145 Million Long-Term Funding

JSW Steel Share Price Hits 52-Week High, Plans $145 Million Long-Term Funding

VoM News Desk | December 8, 2023 | 06:01 PM IST | Breaking News | Follow on Google News

JSW Steel Share Price Hits 52-Week High, Plans $145 Million Long-Term Funding

JSW Steel Share Price Hits 52-Week High, Plans $145 Million Long-Term Funding

JSW Steel witnessed a nearly 4.2% increase in its share price, reaching 52-week highs on Friday and emerging as one of the largest gainers in the Nifty 50.

The surge followed an announcement from JSW Steel USA Ohio Inc, a wholly-owned indirect subsidiary of JSW Steel, revealing plans to raise long-term funds of approximately $145 million with a tenor of around 30 years.

The proposed funds will be utilized for financing the acquisition, construction, equipping, and installation of a vacuum tank degasser, improvements to a continuous slab casting machine, and other initiatives at JSW Ohio’s site in Mingo Junction, Ohio. These initiatives include caster upgrades, auxiliary systems, infrastructure improvements, and certain ancillary equipment to enhance slab quality and production capabilities.

The funds will also cover capitalized interest and certain costs associated with issuing the bonds. The move is expected to enhance JSW Steel’s consolidated operations, particularly considering the historical challenges faced by its foreign subsidiaries.

JSW Steel’s subsidiary in Ohio, USA, faced adverse market conditions, resulting in lower volumes and an EBITDA loss of $29.4 million for the September quarter.

Despite challenges in the US market, JSW Steel reported strong growth and earnings performance from its domestic operations. In Q2, the company registered revenue from operations of ₹44,584 crores, operating EBITDA of ₹7,886 crores, and an EBITDA margin of 17.7%, outperforming analyst estimates.

While short-term challenges such as volatility in raw material and steel prices persist, analysts remain optimistic about JSW Steel’s long-term growth prospects.

Prabhudas Lilladher analysts anticipate revenue, EBITDA, and net profit growth of 15%, 31%, and 74% respectively over FY23-26, citing JSW Steel’s superior execution skills and potential benefits from a robust domestic demand scenario.

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