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Last Updated : Feb 14, 2019 04:54 PM IST | Source: Moneycontrol.com

First Cut | How costly is JSW Steel’s acquisition of Bhushan Power & Steel's assets?

While the details are not yet available, the deal would also be looked from the perspective of immediate scalability, working capital, synergy benefits and adjoining land bank

Jitendra Kumar Gupta @jitendra1929
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Unlike Monnet Ispat, whose assets were acquired at dirt cheap valuation, JSW Steel’s bid of Rs 19,700 crore for Bhushan Power & Steel is less attractive. This is far higher than its own initial bid of Rs 11,000 crore, largely because of competing bids from rivals such as Tata Steel.

While the details are not yet available, the deal would also be looked from the perspective of immediate scalability, working capital, synergy benefits and adjoining land bank. After adjusting for the capital work in progress of about Rs 6,000-7,000 crore, Bhushan Power & Steel’s operational capacity of about 2.5 million tonne (total capacity of 3.5 million tonne) is valued at about Rs 6,000 crore per million tonne, which is closer to its replacement value.

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First Published on Feb 14, 2019 01:25 pm
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