Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

JSW will become India’s top steel producer by March surpassing Tata steel’s 20mn mt capacity on the completion of Bhushan Power & Steel’s (BPSL) acquisition. In FY2022, with the addition of BPSL’s facilities and expansion, JSW’s capacity will increase by almost 50pc to 27mn mt.


Currently, JSW steel is India’s third-largest steel producer with 18mn mt capacity, preceded by SAIL in the second position with 19.63mn mt capacity. The steelmaker aims to complete the BPSL acquisition by the end of March and has offered a deposit of Rs193,500mn ($2,645mn) to BPSL’s lenders. JSW’s will add 3mn mt capacity through the acquisition.  


In 2019, National Company Law Tribunal had approved JSW steel’s takeover of the bankrupt BPSL. However, the process of handover was delayed amid an investigation by the Enforcement Directorate. 


Geographic advantage 

JSW steel would become the most geographically diversified steelmaker in the country post the acquisition, with facilities situated in the north, south and east of India. 


JSW chose the iron ore belt of Karnataka, located in the south, to build its Vijayanagar plant and later in 2013 acquired steelmaker Ispat in western India. The company aims to almost double its capacity at the Dolvi plant in Maharashtra to 10mn mt, while around 1mn mt steel capacity is from the acquisition of Monnet Ispat in the east of India.


Eastern India is the preferred location for the integrated plants due to the availability of iron ore and coal. Top steelmakers Tata and Sail have their capacities concentrated in the east in the states of Odisha, Chhattisgarh and Jharkhand.


The company has also strategically located its facilities near prime consumption centres. Diversity in plant locations would offer JSW flexibility in terms of procurement and sale. The company eyes to lower transport costs by servicing various markets from its local plants, according to company officials. 



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