Jindal Stainless plans sale of green bonds to repay debt

Ratan Jindal-led Jindal Stainless (JSL) is weighing a sale of green bonds to repay existing debt of around ₹2,800 crore, according to sources aware of the matter. The country's largest stainless steel producer has initiated discussions with consultants to arrive at sustainability-oriented targets that could make it eligible for availing cheaper financing through the green bond route. However, it has not mandated banks or started investor roadshows, the sources said.

JSL has been using scrap stainless steel as its main source of raw material and will position its business as a major recycler to potential bond investors.


The proceeds from the potential bond issue will be used to replace the existing loans with lower priced borrowings. Ratan Jindal is amongst four sons to whom their father OP Jindal bequeathed parts of the Jindal steel empire. Sajjan Jindal, Naveen Jindal and Prithviraj Jindal are his siblings.

JSL did not comment on ET's queries. JSL uses stainless steel scrap as raw material for 80% of its manufacturing needs. It will also power all future capacity additions with green power as part of the plan to set sustainability-linked goals for itself, as per people aware of the matter.

The company underwent corporate debt restructuring in 2015. This resulted in certain assets being carved out and parked into a separate company, Jindal Stainless Hisar.

The two companies, JSL and Jindal Stainless Hisar Ltd, are now being merged. The companies have turned around with debt levels being reduced by almost two thirds since restructuring was carried out. The total debt of the two companies at the time of the corporate debt restructuring in 2015 was Rs 8,000 crore.

JSL and Jindal Stainless Hisar collectively posted profits of Rs 568 crore on sales of Rs. 9,073 crore for the September to December quarter of the financial year 2022-23. JSL’s and Jindal Steel Hisar’s individual profits rose by 86% and 24% respectively. Profits at other steel industry players such as JSW Steel and Jindal Steel and Power Ltd (helmed by siblings of Rattan Jindal) and Tata Steel tanked during the same quarter as the government imposed taxes on steel exports.

“With a successful merger, JSL will stand to feature amongst the top 10 stainless steel mills globally, and the company will be better placed to realise operational and financial synergies,” analysts at securities firm Investec said in a report released in January last year wherein they initiated stock coverage of JSL.

“Further, a simplified capital structure with the elimination of cross holdings, inter-company balances and higher implied market cap (of both companies) should rightly attract more interest and trading multiples,” the report said.