Jindal Steel eyes ₹15,000 cr in one of the largest corporate loan deals

In one of the largest corporate loan deals in recent times, Jindal Steel and Power Ltd (JSPL) is raising Rs 15,000 crore from a group of banks led by the State Bank of India (SBI), according to three people familiar with the development.

According to the people who spoke on the condition of anonymity, Jindal Steel Odisha Ltd, a wholly-owned subsidiary of Naveen Jindal's JSPL, is raising the long-term financing. The loan will let it partially fund a $22,500 crore capacity expansion in Angul, Odisha, with mother or parent JSPL contributing the rest as fairness. A corporate guarantee from JSPL will also back the financing. JSPL is a major steel producer in India, with interests in metals, energy, mining, and infrastructure.

The JSPL loan could be much bigger than the Adani Group's most recent borrowing. According to Mint, SBI's approval to finance a total of Rs 12,770 crore to Adani Enterprises' subsidiary Navi Mumbai International Airport Pvt. Ltd has piqued the interest of rival banks, with a group of five eager to take over a majority of the loan.

CareEdge Ratings has given the proposed loan an A+ rating, believing that the challenge has high strategic importance and financial incentive for JSPL, with consolidated liquid metal capability increasing from 9.6 million tonnes per annum (mtpa) to fifteen.6 mtpa by FY25.

Following a period of low demand for corporate loans in recent years, Indian lenders are again eagerly pursuing all available options in the phase. Banks are observing a gentle upswing in corporate loans, led by advances in infrastructure loans, and plan to maintain the momentum in the current fiscal year.