JFE Holdings agreed to acquire a 50% stake in an Indian steel plant from JSW Steel Ltd. for ¥270 billion ($1.7 billion), as the Japanese company seeks growth abroad while grappling with sluggish domestic demand.
The transaction involves Bhushan Power & Steel Ltd., an Odisha-based plant that JSW rescued from insolvency in 2021. JFE will pay in two tranches through June 2026, with both parties targeting production capacity of 10 million tons annually by 2030, up from 4.5 million tons currently.
JSW Steel shares fell about 5% following the announcement, suggesting investors remain cautious about the valuation. The Mumbai-listed company said proceeds would strengthen its balance sheet and fund future expansion.
JFE, which already holds a 15% stake in JSW Steel since 2010, frames the investment as establishing its “third integrated steelworks” alongside domestic facilities in eastern and western Japan. The company aims to boost overseas business profit to ¥200 billion by fiscal 2035, up from roughly ¥30 billion in recent years.
The plant includes access to iron ore reserves in India’s largest producing region, potentially lowering raw material costs. Whether JFE can replicate its domestic manufacturing expertise at an asset that previously fell into bankruptcy remains to be tested.
India’s steel consumption is growing at roughly 8% annually, though competition for market share is intensifying as global players target the country’s expanding infrastructure needs.
