Fitch Ratings has upgraded JSW Steel’s Long-Term Issuer Default Rating (IDR) and senior unsecured bond rating to ‘BB+’ from ‘BB’, while assigning a Positive Outlook. The rating agency has also removed the company from Rating Watch Positive, reflecting its confidence in the steelmaker’s improving financial position.
The upgrade follows a significant reduction in the company’s leverage after receiving proceeds from the transfer of steel assets to JSW JFE Kalinga Steel Ltd., the joint venture formed with Japan’s JFE Steel Corporation. Fitch expects these funds, together with stronger operating performance and ongoing debt reduction, to support a healthier balance sheet over the coming years.
According to the rating agency, JSW Steel’s EBITDA net leverage is projected to remain below 2.7 times, with the potential to improve further to around 2.0 times from FY2027. The company’s financial profile is also expected to benefit from rising earnings, improved operational efficiencies and greater raw material integration, including an increase in iron ore self-sufficiency.
Fitch noted that while JSW Steel continues to pursue an ambitious capital expenditure programme, disciplined debt management and the financial benefits arising from the joint venture are expected to offset leverage pressures. The Positive Outlook indicates the possibility of a further rating upgrade if the company continues to strengthen its credit metrics and maintains sustained improvement in its leverage profile.
