JSW Limited’s debt paper revised to stable from negative by ICRA

Monday, 14 December 2020 11:20:41 (GMT+3)   |   Kolkata
       

Indian rating agency ICRA has revised its outlook for the debt papers of India-based steelmaker JSW Limited to stable from negative owing to improved demand for steel and the sustained rise in prices.

The rating agency considered the consolidated financial risk profile of JSW Limited’s proposed acquisition of Bhushan Power and Steel Limited which would be largely debt funded which, along with the absence of any fresh equity raising by the acquirer, is expected to adversely impact its financial risk profile and would keep overall debt levels elevated in the near to medium term.

The ratings by ICRA are also constrained by JSW Limited’s exposure to price risks especially in the case of coking coal, which has shown high price volatility in the recent past. JSW also remains exposed to foreign exchange risks due to its dependence on imports to meet coking coal requirements, while about 50 percent of its standalone debt as on March 31, 2020, was denominated in foreign currencies.


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