India Ratings has upgraded JSW Steel’s issuer rating and NCDs to IND AA+ with a stable outlook. This follows the company's successful strategic asset sale of its Bhushan Power & Steel business to a JFE Steel joint venture. The transaction generated INR 374 billion, allowing JSW Steel to significantly cut debt and improve its net leverage to 1.93x in 1QFY27. The upgrade reflects a strengthened balance sheet and improved operational efficiency, though investors should monitor the company's ambitious INR 1,305 billion capex plan over the next five years.
JSW Steel Credit Rating Upgraded to IND AA+
Net leverage improved to 1.93x in 1QFY27, down from 4.45x in FY25.
INR 374 billion cash inflow received from the strategic joint venture with JFE Steel.
Reader Takeaway: Improved balance sheet health balances against heavy future capex spending requirements for the steel giant.
What just happened
India Ratings & Research (Ind-Ra) upgraded JSW Steel Limited’s Issuer Rating and Non-Convertible Debentures (NCDs) to IND AA+ from IND AA. The rating outlook is now Stable, resolving a previous rating watch. This shift acknowledges the company’s deleveraging success following the transfer of its Bhushan Power & Steel business to a 50:50 joint venture with Japan’s JFE Steel Corporation.
Why this matters
The upgrade is a sign of financial stability. By utilizing the INR 374 billion cash inflow from the BPSL deal to pay down debt, JSW Steel has significantly lowered its financial risk. The company’s net adjusted leverage dropped to 1.93x in 1QFY27, putting it well within its target range. Operating metrics have also improved, with EBITDA per tonne rising 49% to INR 15,013 in the latest quarter.
What changes now
Management has committed to a massive capital expenditure plan of approximately INR 1,305 billion over the next four to five years. For FY27 specifically, the budget is set at INR 220 billion-240 billion. The company intends to fund these expansions through internal accruals, which should help avoid the need for substantial new borrowing.
Risks to watch
Despite the upgrade, the steel sector remains highly cyclical. JSW Steel is also exposed to foreign exchange risks, as 64% of its debt was held in foreign currencies as of March 2026. Furthermore, large-scale capex execution poses a challenge, and the company remains subject to ongoing regulatory scrutiny within the mining and steel industries.
What to track next
Shareholders should monitor whether JSW Steel can maintain its net leverage below the 2.5x threshold while simultaneously managing its heavy investment phase.