JSW Steel’s signing of an agreement with JFE for a 50:50 joint venture (JV) to run Bhushan Power & Steel Ltd (BPSL) at an enterprise value of Rs 53,100 crore came in higher than analysts’ incorporated values, triggering upward revision in target prices.

Analysts said the deal will be value-accretive for JSW Steel as not only is the stake being sold to JFE at a higher value, but it infuses cash in the business. “This deal is likely to enhance JSW’s fair value by Rs 37 per share (ceteris paribus). Even so, given the stock’s expensive valuation and a potential further earnings downgrade amid soft steel prices, we reiterate ‘REDUCE’ with a target of Rs 1,050,” Nuvama said. Advertisement

BPSL was acquired in 2021 through the IBC process at a consideration of Rs 19,350 crore. At present, it

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