NEW DELHI: Promoters of Jindal Steeel & Power Ltd (JSPL) are repaying 350 crore of loans to ensure release of 10 crore shares of the company from the likes of L&T Financial Services and Franklin Templeton Investments, a source told Mint. Most of the loans are from non-banking finance companies. 10 crore shares amount to almost 10% of the company’s equity of 1.02 billion shares.

JSPL share is currently trading at Rs72.65 on the BSE, up 15% from Friday’s close. The promoter group, led by Naveen Jindal, holds 60.4% stake in the steel and power company.

The JSPL stock has shaved off 65% from its 52-week high of Rs202.40 even as the broader benchmark index, the BSE Sensex, has lost 40% from its own peak. Concerns over high proportion of pledged shares by the promoters and fear of recession have weighed on the stock.

“After this loan repayment, promoters’ debt would more than halve from December quarter levels. The peak debt level was Rs1,151 crore. This means promoters have cut their debt by almost 70% in two years,” the source said. After the repayment, the debt would come down to Rs355 crore, he said.

JSPL’s own consolidate debt at the end of December was Rs35,457 crore

The company’s management had in a conference call for analysts, on its third quarter earnings, said both its promoters and the company were committed to bring their respective debts down.

Indian steelmakers, for last many years, have suffered under the onslaught of cheap Chinese imports. The Narendra Modi has indeed taken steps to safeguard the domestic manufacturers by imposing anti-dumping duties on imports. That has helped local steelmakers regain some foothold in the export market but the covid-19 pandemic seemed to have again halted that growth.

India, the world’s second-biggest steel producer, exported 570,000 tonnes of finished steel in February, which was 8% lower than 619,000 tonnes a year ago, according to Reuters that quoted government data.

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