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Systematix Research Report
We met the management of Jindal Stainless Ltd., India's largest flat stainless steel producer having a combined capacity of 1.9 million tonnes per annum, which includes 1.1 mtpa plant at Jajpur, Odisha, and 0.8 mtpa plant at Hisar, Haryana, currently housed under Jindal Stainless (Hisar) Ltd.
Both companies are under the process of being merged at a swap ratio of 1:1.95.
Jindal Stainless has a history of restructuring events, with its rolling facilities at Jajpur, Odisha being housed under its group company, Jindal United Steel (26% stake) due to legacy issues.
Jindal Stainless' tolling arrangement with Jindal United Steel resulted in large related-party transactions. The company recently announced the acquisition of residual 74% stake in Jindal United Steel for a cash consideration of Rs 9.6 billion, slated to be completed by Q1 FY24.
Jindal United Steel has a net debt of Rs 23.5 billion and reported FY22 Ebitda of Rs 6 billion, implying an enterprise value/Ebitda of 6.1 times. We await further details on its past financials.
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