Bhushan Power acquisition by JSW Steel - Bonanza to PSBs

By Research Desk
about 16 days ago

JSW Steel has acquired Bhushan Power & Steel, an integrated steel unit, with a capacity of 2.5 million tonnes per annum at Jharsugada at Odisha and paid Rs. 19,350 crores to the lenders. Public Sector Banks(PSBs) who provided 100% of this receivable earlier, will see this Rs.19,350 cr, get added in PAT of respective banks in Q4 FY21 numbers.

SBI is the largest lender to Bhushan and will recover Rs. 4,000 cr. SBI had admitted claim of Rs. 9,825 cr against Bhushan, and lenders got about 40.3% of their admitted claims, Punjab National Bank Rs. 7,355 cr (including claims of ex OBC, and ex-United Bank of India which were merged into PNB) will get Rs. 3,000 cr, Canara Bank Rs. 3,991 cr (including claims from Syndicate Bank which is merged into Canara Bank) will get Rs. 1,600 cr, Union Bank of India Rs. 3,497 cr (including merged banks Andhra & Corporation) will get Rs. 1,400 cr., Indian Bank Rs 3,083 cr (including from ex Allahabad Bank) will get Rs.1,250 cr., Bank of Baroda with claim of Rs 2,606 cr, will get Rs. 1,050 cr. Balance Rs.7,000 cr will get shared by other lenders, which are largely PSBs.

This will see some positive bias seen building on these PSBs today, with good buying may be seen in PNB, being the second largest PSB, with more recovery to be seen by end of day, from few of its other NPAs.

This is neither a buy nor a sell recommendation, while stock recommendations are provided exclusively to our paid members in the Member Zone.

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