Jindal Stainless Ltd. will merge its subsidiary with itself in a share-swap deal that, according to analysts, will create a combined entity with a stronger balance sheet.

Boards approved the merger of Jindal Stainless (Hisar) into Jindal Stainless, the company said in a statement. The merger is expected to be completed in the second half of FY22. Shareholders will get 195 shares of Jindal Stainless for every 100 held in Jindal Stainless Hisar.

The merger will simplify capital structure, expanding the turnover of the merged business to Rs 20,000 crore. “With 1.9 MTPA melt capacity, the merged entity will be the only Indian company in the league of top 10 stainless steel companies in the world,” Abhyuday Jindal, managing director of the parent and the subsidiary, was quoted as saying in the statement.

According to Vishal Chandok, analyst at Emkay Global Financial Services, the deal seems to be more favourable to Jindal Stainless given higher operating margin and a subsidiary business of Jindal Stainless Hisar.

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