JSW Steel likely to sell 50% stake in Bhushan Power & Steel to Japan's JFE

The stake sale could help scale Bhushan Power & Steel's capacity to 10 million tonnes and strengthen JSW's partnership with Japan's JFE while keeping debt in check

Sajjan Jindal-led JSW Steel is looking to sell up to 50 per cent stake in Bhushan Power & Steel Ltd (BPSL) to Japan’s JFE Steel. 

 

Asked about it, JSW Steel said in a statement, the company’s strategy includes evaluating various opportunities, both organic and inorganic, in India and overseas, including potential collaborations aimed at enhancing scale, efficiency, and global competitiveness. “However, we would not like to comment on speculation.” 

 

Sources close to the development said that the deal was imminent and would help scale up BPSL’s operations, bring in cutting-edge technology while keeping JSW Steel’s debt under control. JSW Steel’s net debt as of September 30, 2025, had stood at ₹79,153 crore. 

 

 

BPSL has the potential to double its capacity from 5 million tonnes to 10 mt, and JFE is seen as a natural partner to drive the expansion, given the long-standing collaboration between the two companies, sources added. In 2010, the Japanese steel major had picked up a 15 per cent equity stake in JSW Steel. 

 

The strategic alliance and technology agreement had enabled JSW Steel to leapfrog the learning curve for the higher end of automotive steel. 

 

More recently, JSW Steel and JFE have deepened their collaboration through joint investments in the electrical steel segment. 

 

In October 2024, JSW Steel announced that it would acquire a 100 per cent stake in thyssenkrupp Electrical Steel India Private Limited (tkES India) jointly with Japan’s JFE Steel Corporation for ₹4,051 crore. 

 

Further, in August this year, JSW Steel and JFE Steel Corporation announced expansion of its manufacturing capacity for grain-oriented electrical steel at a cost of ₹5,845 crore.

 

Sources said the deal between JSW Steel and JFE for BPSL would likely have been finalised, but a Supreme Court order related to BPSL threw the plans off track, albeit temporarily.

 

In May 2025, the apex court had declared JSW Steel’s ₹19,700 crore resolution plan for BPSL ‘illegal’ and ordered the latter’s liquidation, four years after the company was acquired by the Indian steel major under the Insolvency and Bankruptcy Code (IBC).

 

Review petitions were filed by JSW Steel, the committee of creditors and the resolution professional. And in its judgment dated September 26, 2025, upheld the National Company Law Appellate Tribunal order of 2020 approving JSW Steel’s resolution plan for BPSL, dismissing the appeals filed by the erstwhile promoters and certain operational creditors.

 

While announcing the financial performance of JSW Steel for Q2FY26, the company mentioned that the Supreme Court also noted the substantial efforts of JSW Steel in resolving and turning around BPSL as a profit-making company.

 

During Q2FY26, BPSL recorded revenue from operations at ₹5,162 crore and profit after tax of ₹166 crore for the quarter. In FY25, BPSL’s revenue from operations had stood at ₹21,440 crore and profit after tax at ₹260 crore.

 

The partnership with JFE would not be JSW Steel’s only collaboration with a foreign entity. As the company pursues its ambitious expansion plans, it already has an agreement with South Korea’s POSCO to set up a 6 mtpa integrated steel plant in India.

 

JSW Steel has set sights on 44.4 mt capacity by FY29 and 51.5 mt by FY31 – of which 42.9 mt by FY29 and 50 mt by FY31 would be in India.