JSPL gains on prepaying Rs 2462 cr to lenders

Jindal Steel & Power (JSPL) rose 2.02% to Rs 490.10 after the company announced that it has made a prepayment of Rs 2,462 crore to its term lenders.

"This is in continuation of its long stated financial strategy of debt reduction and building a robust balance sheet with optimum capital mix," the steel maker said in a regulatory filing made before market hours today.

JSPL's production stood at 7.51 million tonnes during the financial year ended 31st March, 2021. The company had recently announced divestment of its thermal power business to reduce its debt further as well as to cut down on its carbon footprint by almost half.

"JSPL now aiming towards becoming net debt free," JSPL said.

JSPL has reduced its debt by more than Rs 20,000 crore from a peak of approximately Rs 46,500 crore in Q3FY17 to Rs 25,600 crore as reported in Q3FY21. This reduction of Rs 2,462 crore is over and above the annual committed debt reduction in the financial year 2020-2021.

V R Sharma, JSPL's MD, said, "The significant debt reduction is part of our long-term financial strategy to create a strong balance sheet. In the coming quarters we intend to further strengthen our balance sheet and become net debt free in the near future."

JSPL is an industrial powerhouse with a dominant presence in steel, power, mining and infrastructure sectors.

On a consolidated basis, the company's net profit stood at Rs 2,566.68 crore in Q3 FY21 compared with net loss of Rs 218.57 crore in Q3 FY20. Net sales jumped 39.6% to Rs 10539.10 crore in Q3 FY21 as against Rs 7547.29 crore in Q3 FY20.

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