India: BPSL exports surge post-takeover by JSW Steel

Bhushan Power and Steel's (BPSL's) exports over Jan-Jul'21 catapulted by 269% to 0.48 million tonnes (mn t) compared to 0.13 mn t seen in the same seven months in CY'20.

On a m-o-m basis, exports surged by 148% in Jul'21 to 0.24 mn t against around 96,600 tonnes in the preceding month of Jun'21.

Interestingly, BPSL's exports have shown a sharp growth trajectory this calendar year rising from a mere 2,700 tonnes in Jan'21 to a whopping 0.24 mn t in Jul'21. Exports in the entire CY'20 were at 0.25 mn t, almost touching the volume exported in Jul'21 alone.

Reasons for sharp spurt in exports

SteelMint notes that BPSL's exports increased sharply after its official takeover by JSW Steel in March this year. Consequent to that, overseas sales jumped from a very modest 11,300 tonnes in Mar'21 to a substantial 47,400 tonnes in the very next month (Apr'21). Thereafter, there has been a steady rise m-o-m.

"Exports increased after the official takeover because the new parent (JSW Steel) already has an efficient export network in place with a ready catchment of customers. That is why, BPSL's overseas sales shot up after its takeover," a source observed.

This is borne out by the fact that BPSL's main exporting country till Feb'21 was Nepal. However, from March onwards, European Union countries like Belgium and Italy came into the picture. July saw exports happening to Italy, Turkey, Spain and Belgium apart from Nepal.

EU sales in Jan-Jul'21 comprised 0.37 mn t and at 0.18 mn t in Jul'21.

The official takeover announcement was made in Mar'21. It may be mentioned that JSW Steel had acquired BPSL under the provisions of the Insolvency Bankruptcy Code (IBC), 2016, at an investment of around INR 19,700 crore.

The bid to acquire BPSL had hit a stalemate as the Enforcement Directorate (ED) had moved the apex court earlier against the National Company Law Appellate Tribunal (NCLAT) order to lift the attachment order against BPSL's properties.

The ED had argued that the appellate tribunal had no jurisdiction to unfreeze and approve the sale of an asset attached by the investigating agency.

The NCLAT had approved JSW Steel's resolution plan in February last year.