SBI Cap takes over collateral for 56% stake in Jindal Stainless

SBICAP Trustee Company on Wednesday said it acquired 56.17 per cent stake in Jindal Stainless (JSL). The latter’s promoters had pledged shares as collateral to secure a term loan of Rs 400 crore from IndusInd Bank.

JSL had pledged 13.02 million shares to secure the term loan, said SBICAP in a BSE filing. “Since multiple promoter group entities — spread across different locations — were involved and due to the challenges arising out of Covid, the last promoter entity of JSL signed the agreement on September 21, 2020. Therefore, the disclosure is being made within two working days from September 21,” said the exchange filing.

As on June 30, 2020, promoter and promoter group of Jindal Stainless held 68.12 per cent stake in the firm company with the balance 31.88 per cent being public shareholding.

Meanwhile, officials of JSL remained unavailable for comment. The present disclosure is for creation of a pledge on the 13.02 million shares of the stainless steel producer in favour of SBICAP Trustee.

Jindal Stainless had reported a loss of Rs 87 crore in the quarter ended June, due to lower sales amid the Covid-19 lockdown.

Last month, CARE Ratings had upgraded rating of the credit facilities of JSL to ‘CARE BBB’ with a stable outlook.

JSL’s strong financial and operational profile and the improved rating reflect a resilient business strategy despite interruptions caused due to Covid, it said in a report.

The revision in ratings also takes into consideration the company’s successful exit from corporate debt restructuring (CDR) in March 2019. This is likely to provide better operational and financial flexibility, said CARE Ratings.

Jindal Stainless is one of the largest integrated manufacturers of stainless steel in India with a capacity of 1.1 million tonnes. The Delhi-based firm has its unit located in Odisha where the plant has 250,000 tonnes of ferro alloy facilities. The complex, equipped with a captive power generation facility, can be scaled up to 3.2 million tonnes of stainless steel making.

Ratan Jindal, chairman of Jindal Stainless, is one of the four sons of Om Prakash Jindal, founder of the Jindal Group. He is the promoter of JSL. Alongside, the managing director is Abhyuday Jindal, son of Ratan Jindal. The group is largely in the steel and power business.