JSW Steel looking to scale-up via inorganic route.

JSW Steel, India's second largest steel maker in the domestic market acquired 50% stake last week in Punjab-based Vallabh Tinplate for about Rs. 46 crore. This acquisition marks JSW Steel’s foray into tinplate business. In 2010, JSW Steel struck a strategic alliance with debt-ridden Ispat Industries as it acquired 41% in the latter which had 3.3 million tonne capacity and that was struggling with high debt and large accumulated losses.

The steel company has since merged Ispat Industries with itself to become geographically one of the most diversified steel makers in India. Analysts say that JSW is best placed to scale-up its business through inorganic means given its strong balance sheet and high valuations. This is evident from the way the company's stock has moved as against its peers. In the last one year, JSW Steel stock has risen 15% as against its peer Tata Steel which has declined 2%. Jindal Steel has tumbled 32% in the last one year, while stock of Steel Authority of India has declined 25%.

BS