JSW Steel (USA), a subsidiary of JSW Steel, has signed a Memorandum of Cooperation with the state of Texas to invest $500mn. The investment would be used to expand the company’s existing facility in the USA through backward integration to help build the first steel plate and pipe making facility in the state. As part of the Memorandum, the state of Texas would also be giving a grant of $3.4mn to JSW Steel (USA).
Out of the total investment, $150mn would be used to augment JSW Steel (USA) existing unit. These upgradations are expected to be completed by March 2020. The current capacity of the Texas facility stands at ~10lakh net tonnes for the plates and 5.5lakh net tonnes for pipes. The remaining $350mn would be used to setup a hot end facility to make the steel ‘melt and manufacture’, subject to environmental clearance. The management expects that this expansion would help the company address the needs of the Oil and Gas industry in Texas as well as take advantage of the abundant availability of scrap steel in the region. This move would be a positive for the company as it would enable JSW Steel to likely benefit from the recent hike in steel import tariffs.
JSW Steel Ltd is currently trading at Rs289.45 up by Rs3.55 or 1.24% from its previous closing of Rs285.90 on the BSE. The scrip opened at Rs284.50 and has touched a high and low of Rs290.25 and Rs284.50 respectively. So far 17,15,460 (NSE+BSE) shares were traded on the counter. The current market cap of the company is Rs69,108.33cr. The stock is currently trading below its 50 DMA.
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