Bhushan Steel surges by 18.02 per cent on asset sale

Bhushan Steel (BSL) is in the process of getting Rs 3000 crore from sale and leasing of assets for oxygen and coke oven plants in the state of Odisha. The company had entered from a sale agreement to sale of assets such as Cock Oven Plant -I and Oxygen Plant -V situated at integrated steel plant, Meramandali Odisha.

On the financial front, BSL has a total debt of Rs 39079 crore as of FY15. The company may get Rs 3000 crore from the plan of asset sale and thereafter its debt level will be reduced. Since many banks have exposure towards the company's debt, it is facing pressure from lenders to cut debt burden.

Earlier, BSL received its lenders’ permission for refinancing debt in the 5/25 scheme where banks can extend the loan repayment periods up to 25 years, with an option of refinancing the loan every five years. The company had struggled last year to make operating profits. The steel industry is suffering due to lower global commodity prices and has been impacted by the industry’s down cycle.

Considering the latest quarter result, BSL's revenue increased by 7.08 per cent to Rs 3174 crore in Q2FY16 as compared to the same period in previous fiscal year. The company's net loss widened to Rs 733 crore in Q2FY16 as against a net loss of Rs 297 crore in Q2FY15.

BSL's shareholding pattern indicates that FII holdings have moved 54 basis points to 0.74 per cent and DII holdings remained unchanged with 4.05 per cent during September 2015 quarter. The share prices of the company increased by 18.02 per cent on bourses in early trades and is trading at Rs 48.85 on intraday basis.

BSL is engaged in the manufacture of basic iron and steel. The Company offers products, such as cold rolled closed annealed sheets and coils, galvanized coil and sheet, high tensile steel strapping, color coated coils, galume sheets and coils, hardened and tempered steel strips, alloy billets, sponge iron, precision tubes, high frequency welding/electric resistance welding (HFW/ERW) pipe and drawn tubes of original equipment manufacturer (OEM) grade. Its manufacturing plants are located in Ghaziabad, Uttar Pradesh; Raigad, Maharashtra, and Dhenkanal, Odisha. It offers its products in Coimbatore, Hosur, Bangalore, Indore and Agra, among others.