The board of directors of JSW Steel Ltd has approved to make a Rs-750-crore strategic investment in JSW Paints Pvt Ltd in 3-4 tranches by FY25.
In the initial tranche, JSW Steel will invest nearly Rs 300 crore in the paints business by August end. This will result in JSW Steel acquiring equity shares equivalent to approximately 7.5% of the issued and paid-up equity capital of JSW Paints.
"The Company has obtained a valuation report from one of the big four accounting firms to determine the minimum issue price of the aforesaid equity shares. The Accounting Firm has followed valuation methodology generally adopted in the industry," JSW Steel said in an exchange filing.
The investment will aid the two group companies to collaborate in product development, new technologies, and preferred relationship for supplies in the area of coil coatings.
"The investment is part of the Company’s strategy to ensure continuous supply of paints at market driven rates, gain a competitive advantage in the coil coating market. In addition, JSW Paints has been able to make inroads into the fast growing and lucrative decorative paints market, which will be value-accretive. Also, many of the paint retailers can be potential retailers for JSW Steel coated products enhancing the retail foot print for steel products," the notice said.
JSW Paints made a turnover of Rs 430.48 crores in the previous fiscal.
