**JSW Steel Seeks Compensation Amid Bhushan Power Liquidation Risk**
JSW Steel Ltd is anticipating adequate compensation if Bhushan Power & Steel Ltd (BPSL) enters liquidation, following the Supreme Court’s annulment of its resolution plan for the financially troubled company. The steel manufacturer asserts that its agreement with BPSL’s previous creditors entitles it to compensation that reflects the value of the assets listed on its balance sheet in the event of BPSL’s liquidation. JSW Steel had acquired Bhushan Power through bankruptcy proceedings in March 2021, and as of March 31, the company reported net assets of ₹14,091 crore associated with BPSL on its consolidated balance sheet.
In light of the Supreme Court’s decision on May 2, which rejected its resolution plan and acquisition of BPSL, JSW Steel believes it has solid grounds for pursuing legal action. During a post-earnings call on Friday, JSW Steel’s joint managing director, Jayant Acharya, emphasized that the company has adhered to the legal requirements of the resolution plan and has taken significant steps to revive BPSL. He stated, “We, along with our legal advisors, have analyzed the matter and believe we have strong grounds to avail all legal remedies.” However, Acharya refrained from discussing further details regarding BPSL due to the ongoing legal proceedings.
BPSL operates a plant in Odisha with an annual integrated steel production capacity of 4.5 million tonnes, while JSW Steel boasts a total domestic capacity of 34.2 million tonnes, making it the largest steel producer in India. Analysts noted that during the Q4 FY25 earnings call, management did not provide clear answers or a future strategy in response to the recent Supreme Court ruling. Parthiv Jhonsa, lead analyst for metal and mining at Anand Rathi Financial Services, remarked, “While the downside for the company is protected, no clarity was provided on the recovery of the original amount from creditors.”
In its financial results for the fourth quarter of FY25, JSW Steel reported a consolidated profit of ₹1,501 crore, reflecting a 14% increase compared to the same quarter in FY24. However, consolidated revenue decreased by 3% year-on-year to ₹44,819 crore, attributed to lower steel prices. The company’s earnings before interest, taxes, depreciation, and amortization (EBITDA) rose by 4% to ₹6,378 crore, with the EBITDA margin improving to 14.23% as input costs and expenses decreased. The prices of essential raw materials, such as coking coal and iron ore, were lower due to subdued global demand during the January-March period.
JSW Steel’s subsidiaries performed well overall during the quarter, with the exception of operations in Italy, which faced some challenges. Losses in the U.S. have diminished, indicating a positive trend across the board.
**FAQ**
**What is the current status of JSW Steel’s acquisition of Bhushan Power?**
JSW Steel is currently seeking compensation following the Supreme Court’s rejection of its resolution plan for Bhushan Power & Steel, which may lead to the company’s liquidation.
