JSW Steel Limited's Board of Directors has approved the formation of a strategic joint venture company for land development in Mumbai. The decision was taken during a board meeting held on January 23, 2026, which commenced at 10:00 AM and concluded at 3:15 PM.

Joint Venture Structure and Partnership

The joint venture will be structured with Peddar Realty Limited, a wholly-owned subsidiary of JSW Steel, holding a controlling 51% stake. The partnership includes JSW Realty Private Limited (JSWRPL) and other partners for the land development project.

Project Objectives and Scope

The joint venture company will participate in competitive bidding for acquiring identified land parcels in Mumbai through a formal tender process. The primary focus will be on developing office and commercial spaces to support JSW Steel's expansion requirements.

Key Development Areas:

• Office space development
• Commercial space construction
• Meeting future captive requirements
• Supporting company's expansion phase

Transaction Details and Timeline

The transaction falls within the ambit of related party transactions and will be conducted at arm's length. JSWRPL, being a promoter group entity, has interest in the proposed transaction corresponding to its shareholding in the joint venture.

Strategic Rationale

The land development project aligns with JSW Steel's expansion strategy, addressing the company's growing need for additional commercial and office infrastructure. As the company continues its growth trajectory, securing adequate commercial space becomes crucial for operational efficiency and future business requirements.

The joint venture structure allows JSW Steel to leverage partnerships while maintaining controlling interest through its subsidiary, ensuring strategic alignment with corporate objectives while sharing development risks and expertise with experienced partners in the real estate sector.

JSW Steel shares have gained momentum following the government's announcement of import curbs, but the steelmaker faces earnings pressure in the December quarter due to challenging market conditions. The stock rose 5.7% since December 30, significantly outperforming the benchmark Sensex, which fell 3.3% over the same period.

Market Performance and Policy Support

The rally came after the Centre's decision to levy a 12% safeguard duty for three years on December 30, providing confidence to steelmakers to raise prices twice within two weeks of the announcement. However, this positive development may have come too late for the October-December quarter, during which steel prices fell to absolute lows rivalled only by the abnormal conditions seen during the COVID-19 pandemic.

Expected Financial Performance

Analysts anticipate sequential profit decline for the second consecutive quarter, despite some cost relief from lower iron ore prices. The adverse spread between realization and input costs is expected to weigh on profitability.

Strategic Expansion and Joint Ventures

Despite near-term challenges, JSW Steel continues pursuing aggressive capacity expansion anchored in India's long-term steel demand. The company remains on track to reach 51 million tonnes per annum capacity and will add another 5.5 million tonnes through its newly formed joint venture with a Japanese steelmaker.

The steelmaker has stepped up efforts to access advanced technology through strategic partnerships:

• Partnership with South Korea's Posco Holdings for a 6 million tonnes per annum steel plant
• Joint venture with Japan's JFE Steel Corp for Bhushan Power & Steel assets transfer
• 50:50 venture structure for the Bhushan transaction

Balance Sheet Strengthening

The Bhushan deal has materially strengthened JSW Steel's financial position. As of the July-September 2025 quarter, the company's total debt stood at ₹79,153.00 crore. The transaction structure provides significant debt relief:

Key Challenges and Outlook

Regulatory risks have resurfaced with India's competition watchdog reportedly finding evidence of price collusion among market leaders including JSW Steel, Tata Steel, and SAIL, according to a Reuters report citing confidential documents. Management will likely face questions on these allegations during the earnings announcement.

Steel consumption grew 6.8% during April-December 2025, nearly half the 11% growth recorded a year earlier. However, production rose 10% during the period, compared with 4% growth in April-December 2024, indicating supply-demand imbalances.

Exports contributed 10% of total revenue in the September quarter, but the European Union's carbon tax implementation from January 1 may pressure export contributions. The carbon border adjustment mechanism's impact remains unclear as goods reach borders.

Investors will focus on management commentary regarding pricing power following safeguard duty implementation, infrastructure demand prospects from the upcoming Budget, and funding plans for the 51 million tonne capacity expansion.