Jindal Stainless (Hisar) to merge with Jindal Stainless

The board of Jindal Stainless (JSL) and Jindal Stainless (Hisar) (JSHL) on Tuesday (29 December 2020) accepted the recommendations of the respective board committees and approved the merger of JSHL into JSL.

Shares of Jindal Stainless (Hisar) fell 0.84% to Rs 146.80 while Jindal Stainless slipped 1.37% to Rs 78.95.

As per the approved share swap ratio, 195 equity shares of JSL will be issued for every 100 equity shares of JSHL.

JSL is the largest manufacturer of stainless steel in India with a capacity of 1.1 MTPA.

JSHL is an integrated stainless steel manufacturer with facilities starting from melting, casting, and hot rolling to cold rolling and other value additions.

The merger will create a mega stainless steel entity that will be among the top 10 stainless steel companies in the world and the largest stainless steel company in India. The merger will not only enhance the company's product portfolio, but will also offer a pan-India, as well as global network access to customers. The consolidation of businesses will recast the merged entity as an integrated, modern and manufacturing facility, bringing the diversified technology, talent and R&D under one roof. The merger will lead to the realisation of enhanced operational synergy, with JSL's proximity to port and raw materials, along with world-class finishing lines, and JSHL's strategic location around key domestic consumption centres.

Furthermore, the merged entity will present reinvestment opportunities for growth by leveraging ready infrastructure at Jajpur for cost-efficient Brownfield expansions.

Post the merger, JSL will be the single listed entity on the stock exchanges and the promoter holding will be about 57%, while the remaining 43% will be held by the public. As per the proposed structure, the mobility business of JSL Lifestyle, a domestic subsidiary of JSHL, would be merged into JSL. Non-mobility businesses would be carved out as a separate new entity, named Jindal Lifestyle.

Post restructuring, Jindal Stainless Steelway (JSSL) and Jindal Lifestyle will operate as Indian subsidiaries, while overseas operational subsidiaries of JSL in Spain and Indonesia will continue to operate as business units of merged JSL. With the appointed date of 1 April 2020, the merger process is expected to be completed in H2 FY22. The merger is subject to approvals from statutory authorities, shareholders, creditors, and NCLT.

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