JSW Steel sinks 1% despite joint venture with Japan's JFE Steel

"The entire project cost is expected to be approximately Rs 5,500 crores. This is expected to be financed by a mix of equity and debt", JSW said in an exchange filing on August 2.

JSW Steel Limited shares dropped 1 percent to Rs 797 at 9:39 am on August 3 after the company announced its joint venture (JV) agreement to produce cold rolled grain oriented (CRGO) electrical steel products with JFE Steel Corporation, the second largest manufacturer in Japan.

CRGO electrical steel is speciality steel used in the cores of electromagnetic devices such as motors, generators, and transformers because it reduces power loss.

Follow our market blog for all the live action

The home-grown steel major, in May 2022, said in a disclosure that the company and JFE had completed a joint feasibility study and had in‐principle reached an agreement to establish a 50:50 joint venture company to manufacture CRGO in India.

"The entire project cost is expected to be approximately Rs 5,500 crores. This is expected to be financed by a mix of equity and debt", JSW said in an exchange filing on August 2.

"The board of directors of the JV shall consist of six members. JSW Steel and JFE shall be entitled to nominate 3 directors each - comprising of one whole-time executive director and 2 non-executive directors, each", the disclosure added.

Also read: JSW Steel Q1: Net profit surges 189% to Rs 2,428 crore, tops estimate

For the April-June quarter, India's largest steel manufacturer reported a 189 percent jump in net profit to Rs 2,248 crore. The company's revenue from operations increased 11 percent to Rs 41,771 crore, primarily driven by higher volume growth. The reported figures surpassed most analyst estimates.

Disclaimer: The views and investment tips expressed by experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.