MUMBAI: Jindal SAW, one of the largest manufacturers of SAW (submerged arc welded) pipes, has reportedly put its US steel plate mill —Jindal United Steel Corp (JUSCO) — on the block. Sources added that the company is restructuring its shareholding format in JUSCO ahead of the sale.
A company spokesperson as well as the finance head denied any such plans. The stock closed 1% up at Rs 382 on the Bombay Stock Exchange on Thursday.
The Rs 2,400 crore Jindal SAW, part of the $4 billion Jindal Group, has two chief business entities in the US — JUSCO and SAW Pipes USA (SPU), both located in Texas. JUSCO makes steel plates and services shipyards, oilfield fabricators, heavy equipment producers, machinery makers. SPU manufacturers DSAW pipe for the energy and petrochemical sector and sources plates from JUSCO.
JUSCO has an installed capacity of 1.2 million tonnes. Jindal SAW holds a 49% stake in JUSCO through its wholly owned US unit Jindal Enterprises.
SPU holds another 29% in JUSCO. The balance is held by the promoter group in their individual capacity. On Jindal Saw’s balance sheet, JUSCO is recognised as an associate company.
Sources say with pipes being its focus area, steel plates have become non-core. The company has four strategic business units: Large Diameter Pipes, Seamless Tubes, DI (Ductile Iron) Pipes and the US Operations. US operations act as a dedicated marketing arm of the company to the American market. It also gets raw material converted to finished goods supplied to the US Affiliates (JUSCO and SPU) under a toll conversion arrangement, and further markets the product in the American market.
In the domestic market, Jindal Saw has plants in Kosi Kalan in Uttar Pradesh, Nashik in Maharashtra, and Mundra in Gujarat.
