Mumbai: Two strategic joint ventures have set the Sajjan Jindal-led JSW Steel on course to becoming one of the world’s biggest steel companies outside of China.
The first joint venture is with Japan’s JFE Steel through a recent 50% stake sale in Bhushan Power & Steel Ltd (BPSL), a company it acquired through the bankruptcy court five years ago.
Add to that another equal joint venture with South Korea’s POSCO to set up a new 6 million tonnes per annum (mtpa) capacity steel plant in Odisha.
Including planned capacity expansions at BPSL, the two partnerships would add about 16 mtpa capacity by 2032, setting it on course to reach 80 mtpa capacity by 2032, according to Jayant Acharya, the chief executive officer and joint managing director of JSW Steel.
The company’s consolidated steelmaking capacity stood at just under 38 million tonnes per annum at the end of FY26, including BPSL.
These capacity additions would make JSW Steel a strong contender to be the world’s largest outside China by 2032.
At present, ArcelorMittal is the world’s largest steel company outside China, with a capacity of 65 million tonnes per annum, according to 2024 manufacturing capacity data from the Belgium-based World Steel, the latest figures published by the international trade body.
The BPSL stake sale to JFE Steel brought JSW Steel about ₹37,250 crore, which sharply deleveraged its balance sheet, and gave the company the financial muscle to fund expansion. The Mumbai-headquartered steelmaker pared about ₹30,000 crore of debt in FY26, mostly in foreign borrowings. The company’s net debt to Ebitda (earnings before interest, taxes, depreciation, and amortization) ratio dropped to 1.81 at the end of March from 3.34 a year prior.
“We are now much stronger. We have been able to deleverage and that creates a foundation for the next stage of growth,” Acharya told Mint in an hour-long interview at JSW Group’s headquarters near Mumbai’s Bandra Kurla Complex on Friday.
This helped the company raise its own expansion plans from just over 50 mtpa by FY30 to 62 mtpa by FY32, Acharya said. This expansion would largely be funded with internal accruals, he said. It has a 1.5 mtpa overseas capacity.
“Outside China, we’ll probably be in the top two or three, unless somebody else expands too beyond this, which I don’t see happening,” Acharya said.
“But our expansion is not driven by the aim to become the largest steel producer in the world, it incidentally is adding up to 78-80 million tonnes,” he added.
The plan to sell stake in was first conceived about a year and a half ago, Acharya said, primarily to pare debt. The asset was chosen as it was housed in a separate subsidiary, making it easier to ring-fence it and sell a partial stake, he said.
“There is value in creating a double engine growth in India, the thought came basically from there. The basic thing is that when we want to expand in India and we want to grow faster than what we can normally do alone, the second engine is important. So, getting a second engine for us, JFE is a natural partner,” the chief executive said.
Betting on India’s growth
JSW Steel is betting on India’s manufacturing growth as steel is an essential raw material. The company has pencilled in a sharp growth in India’s steel consumption from 164 million tonnes last year to about 260 million tonnes by 2032, according to Acharya.
He brushed aside short-term demand concerns stemming from the Iran war, which has unsettled governments worldwide.
“Over the last six years we have had so many challenges: Covid, Russia-Ukraine war, Israel-Palestine war, now Iran war. Steel demand moved up from 100 million to 164 million tonnes in India through all these crises. So, we are not focusing right now on the short term,” he said.
As it prioritises India, the company has also capped new investments in its international operations, focusing on improving profitability rather than expanding capacities overseas.
JSW Steel has two facilities in the US and one in Italy.
“We are not investing anything additionally now… whatever investments we had planned for Ohio and Baytown (in the US) are getting completed… these are very incremental, low-cost investments,” Acharya said, indicating a shift towards sweating existing assets.
As the steelmaker expands to 80 million tonnes capacity, it also wants to meet half its raw material requirements of iron ore and coking coal through captive mines, to hedge itself against cost spikes.
The company maintained its stance of avoiding auctions with 100% bid premiums but “if there is something where logistics drives a decision, we can take a call,” Acharya said. The company recently won a mine with a bid premium of 118% in Goa. However, Acharya explained that the mine was closer to Dolvi and Vijaynagar, therefore logistics costs would be less compared to bringing ore from Orissa to these locations.
A bid premium is the extra price a company offers over the base price set by the government in an auction.
On the coking coal front, the company has increased its stake in Illawarra Metallurgical Coal in Australia, and Mozambique’s Minas de Revuboe coking coal mine in phases, and along with domestic linkages, it expects to meet its 50% requirement.
JSW Steel ended the 2026 fiscal with a 10% rise in revenue from operations to ₹1,85,470 crore. The company reported consolidated net profit of ₹22,316 crore for the fiscal year, a nearly six-fold jump from ₹3,504 crore in FY25, and beating the ₹8,994.22-crore projection of 35 analysts polled by Bloomberg. However, the reported profit includes a one-time gain of ₹18,051 crore related to stake sale in Bhushan Power and Steel assets.