Post JSHL merger, Jindal Stainless to be among top 10 stainless steel companies worldwide

Jindal Stainless Limited (JSL), the largest manufacturer of stainless steel in India as well as the parent company of Jindal Stainless (Hisar) Ltd (JSHL) announced on Tuesday about the merger of JSHL with JSL.  

It will be an all-equity merger with a share swap ratio of 1:1.95; so, for every 100 shares of JSHL, 195 shares of JSL will be offered. The transactions are due to happen on April 1, 2020.  

According to the company, this merger will help to rationalise operational and management efficiency. The merged entity will aim to serve customers from all segments, providing an end-to-end product portfolio. With a simplified capital structure, the merged companies will be having around Rs 20,000 crore as their turnover.  

JSHL currently has a melting capacity of 0.8 million metric tonnes per annum (MTPA) while JSL has 1.1 MTPA capacity. Post the merger, this entity will be the sole Indian company to enter the top 10 stainless steel companies in the world.  

These companies, having a global network of customer base would provide a diversified portfolio of products, ranging from stainless slabs, coils, plates, steels strips, razor blades to coin blanks for the domestic & international mints.   

JSHL has shown a strong performance in Q2FY21. Before COVID, the company witnessed a 54.65 per cent rise in its net profit. It showed growth with strong ratios; ROE reported for FY19-20 is 19.11, an increase from 18.87 of its previous year-end ROE. The debt-to-equity ratio now sits at 1.10 compared to 1.44 in FY18-19.  

This morning, both the stocks dropped dramatically but are gradually picking pace and trading at their previous close prices. JSHL was trading at Rs 147 per share while JSL was trading at Rs 79.4 per share.