JSW Steel, as a standalone company, has not availed any tax benefits from the acquisition of Bhushan Power & Steel Ltd (BPSL) with the latter continuing to operate as an independent entity.
There is no immediate tax impact on the steel-maker because of the Supreme Court’s order for liquidation of BPSL, the company top brass said during a post result investor call..
The Supreme Court in its ruling on May 2, 2025 rejected JSW Steel’s resolution plan for BPSL and directed refund of amounts paid to creditors and equity contributions, as recorded in a prior court order dated March 6, 2020.
Jayant Acharya, Joint MD and CEO of JSW Steel, during the earnings call, said the steel-maker had complied with legal requirements in implementing the BPSL resolution plan.
Responding to a specific question, he said: “BPSL continues to be an independent entity. JSW Steel (as a standalone entity) has not availed any tax exemption or benefit on the basis of this transaction. Therefore, there is no tax impact on JSW Steel. ”
According to Acharya, there has been no additional equity infusion or loans extended to BPSL since the acquisition, and all capital expenditure was funded through BPSL’s internal accruals.
Reiterating that the matter is sub judice, Acharya said JSW Steel, after consulting legal advisors, believes it has strong grounds for pursuing legal remedies.
“We have implemented the resolution plan for BPSL in compliance with law and taken all steps to successfully revive the company to its present status today. The judgement by the Supreme Court on May 2, 2025 rejected JSW Steel’s resolution plan for BPS; and directed refunds of amounts paid to creditors by BPSL, equity contribution made in BPSL as recorded in the Supreme Court order dated March 6, 2020. We along with our legal advisors have analyzed the matter and we believe that we have strong grounds for availing all legal remedies,” he said in the call.
He confirmed that BPSL’s production and sales remain unaffected, “with JSW Steel retaining control of the assets”.
The company declined to provide further details on potential cash flow settlements or timelines for resolution due to the ongoing legal process.
JSW Steel reported that BPSL’s crude steel production was at 3.54 mtpa for FY25, up over 11 per cent; producing approximately 1 million tons in Q4 FY25 (Jan – March), up 20 per cent YoY. Steel sales was at 3.31 mt up 12%-odd. Revenue however declined to ₹21440 crore, last fiscal.
Operating EBITDA for FY25 declined YoY to Rs 2212 crore; as against ₹2765 crore in the year-ago-period. Profit after tax for the unit dipped by over 60 per cent last fiscal, YoY to ₹260 crore (₹674 crore in FY24).
Improvement in product mix at BPSL is underway too; and in the next few quarters, BPSL’s EBITDA per tonne is expected to be nearly at par with JSW Steel.
“The capacity utilisation in BPSL has improved and I think that it is near capacity utilization... So you will see improved volume performance from BPSL as well,” Acharya said.
Despite the setback, the company remains optimistic about its FY26 outlook, projecting consolidated production of 30.5 million tons and sales of 29.2 million tons, driven by strong domestic demand and operational efficiencies.