Jindal Strips Ltd (JSL), of the Rs 4,500 crore O P Jindal group, is streamlining its holdings in non-core businesses through disinvestment. The move is line with its efforts to convert JSL into a focused stainless steel company.
JSL has divested its entire holdings in its software company, Cross Border (IT) India, in favour of group company, Stainless Investments, and part of its holding in Brahmaputra Capital & Financial Services Ltd, so that it ceases to be a subsidiary of JSL.
Confirming the development, Arvind Parakh, senior vice-president (finance) of JSL, said the divestment is part of JSL's consolidation exercise. "The divestment of Cross Border to Stainless Investments was carried out in the form of inter se transfer, Stainless Investment being a group company."
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JSL, which previously held 51 per cent in Brahmaputra Capital & Financial Services, has divested 10-12 per cent. Parakh said, though JSL has exited the software business, the OP Jindal group still continues to be in the business. Cross Border came into being early this year.
JSL had also exited Shalimar Paints recently. Parakh said: "JSL has divested 11.23 per cent in the company in favour of its joint venture partner, Girish Jhunjhunwala." The O P Jindal group, at present holds 31 per cent in the company through various investment companies, which is equal to Jhunjhunwala's stake in Shalimar.
Parakh cited the example of hiving off Jindal Steel & Alloys Ltd and Jindal Steel & Power into separate companies as part of the consolidation exercise. JSL presently has four subsidiaries -- Jindal Holdings, Jindal Steel & Alloys, Jindal Stainless (Mauritius), Massilon Stainless Inc, USA.
It may be mentioned that JSL, with presence in markets such as the US, Hong Kong, China and Argentina, happens to be one of the largest exporters of stainless steel. JSL plans to further increase its exports of stainless steel during the current financial year and tapping new markets for its niche high premium products.
The company specialises in the manufacture of 200 and 400 series which is understood to have good potential. While the industry the world over is growing at a rate of 4 per cent, in India the growth rate currently stands at 5-6 per cent. However, the per capita consumption of stainless steel is 0.7 kg as against 7-10 kg per capita in developed countries.