Credit Rating

Steel Limited Regd. Office: JSW Centre, Bandra – Kurla Complex, Bandra East, Mumbai – 400 051 CIN : L27102MH1994PLC152925 Phone : +91 22 4286 1000 Fax : +91 22 4286 3000 Website : www.jsw.in JSWSL: MUM: SEC: SE: 2026-27/09/03 September 03, 2026 1. National Stock Exchange of India Ltd. 2. BSE Limited Exchange Plaza, Plot No. C/1, G Block Corporate Relationship Dept. Bandra – Kurla Complex Phiroze Jeejeebhoy Towers Bandra (E), Mumbai – 400 051 Dalal Street, Mumbai – 400 001. NSE Symbol: JSWSTEEL Scrip Code No.500228 Kind Attn: Listing Department Kind Attn: Listing Department Sub: India Ratings & Research (Ind-Ra) upgrades JSW Steel Limited and its Non-Convertible Debentures (NCD’s) to IND AA+, Outlook Stable Dear Sir/Madam(s), Pursuant to Regulation 30(6) and 51(2) of the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“Listing Regulations 2015”), we wish to inform you that India Ratings & Research, vide its Release dated September 02 2026, has upgraded JSW Steel Limited and its Non-Convertible Debentures (NCD’s) to IND AA+, Outlook Stable. Please find below the details of the rating action. Name of Credit Type of Credit Existing Rating Rating Action/ the Rating Rating Revised Rating Company Agency Issuer Rating Ind AA Upgraded to JSW Steel India Rating Watch with IND AA+ / Stable Limited Ratings & Positive Research Implications Non-Convertible Ind AA Upgraded to Debentures Rating Watch with IND AA+ / Stable Positive Implications A copy of the Release issued by India Ratings & Research covering the rationale for rating action is enclosed herewith. This is for your information and records. Thanking you, Yours faithfully, For JSW Steel Limited Manoj Prasad Singh Company Secretary (In the Interim Capacity) Encl: as above India Ratings Upgrades JSW Steel and its NCDs to ‘IND AA+’/Stable; Off Rating Watch with Positive Implications Sep 02, 2026 | JSW Steel Limited | Iron & Steel India Ratings and Research (Ind-Ra) has upgraded the rating on JSW Steel Limited (JSWL) and its non-convertible debentures (NCDs) to ‘IND AA+' from ‘IND AA’ with a Stable Outlook, while resolving the Rating Watch with Positive Implications as follows: Details of Instruments Instrument Regulator of Date of Coupon Maturity Size of Issue Rating Assigned along Rating Action Description Instrument Issuance Rate (%) Date (INR million) with Watch/Outlook Issuer rating # - - - - IND AA+/Stable Upgraded; Off Rating Watch Non- SEBI - - - 100,000 IND AA+/Stable Upgraded; Off convertible Rating Watch debentures* # There is no instrument being rated and hence, Regulator of the Instrument is not applicable. The rating scale and definitions are being followed as stipulated in SEBI Master Circular for CRAs. *Unutilised Analytical Approach Ind-Ra continues to take a fully consolidated view of JSWL and its subsidiaries because of the close operational and strategic linkages among them. Detailed Rationale of the Rating Action Ind-Ra has resolved the Rating Watch with Positive Implications after the completion of JSWL’s strategic slump-sale transfer of Bhushan Power & Steel Limited's (BPSL) steel business to a newly incorporated 50:50 joint venture (JV) with JFE Steel Corporation, Japan (JFE) in March 2026. The upgrade reflects a substantial cash inflow of around INR374 billion in March and June 2026 into JSWL from the transaction, which was primarily utilised to reduce debt, strengthening the company's financial risk profile. Consequently, the consolidated net adjusted leverage (net adjusted debt including acceptances and lease liabilities/operating EBITDA) improved to 1.93x in 1QFY27 (FY26: 2.65x; FY25: 4.45x). Ind-Ra expects the structural deleveraging from the transaction to help JSWL maintain the net leverage below 2.5x over the medium term, despite its sizeable, planned capex of around INR1,305 billion over the next four to five years. The rating is supported by JSWL's improving operating performance, with steel volumes growing 12% yoy in FY26 and the consolidated EBITDA per tonne rising 49% to INR15,013 in 1QFY27 (FY26: INR10,064; FY25: INR8,659). The improvement in EBITDA per tonne was led by a sustained higher share of value-added and special products (VASP) in sales at 61% in 1QFY27 (FY26: 61%; FY25: 60%). The rating continues to be underpinned by JSWL's strong business profile including its leading market position in India, established global presence, large operating scale, and demonstrated operational efficiencies. The company's continued focus on enhancing raw material security, supported by one-third captive iron ore integration as on 30 June 2026, remains a key rating strength. However, these strengths are partly constrained by the inherent cyclicality of the steel industry and volatile steel prices, which can lead to volatile EBITDA and cash flows. List of Key Rating Drivers Strengths Significant cash inflow from strategic transaction strengthens financial risk profile EBITDA per tonne to improve in FY27, led by operating leverage and favourable product mix Strong business profile Increasing raw material security through backward integration Weaknesses Inherent industry and regulatory risks and exposure to forex risks Detailed Description of Key Rating Drivers Significant Cash Inflow from Strategic Transaction Strengthens Financial Risk Profile: Ind-Ra expects JSWL's consolidated net adjusted leverage to reduce to around 2.0x in FYE27 and thereafter (1QFY27: 1.93x; FY26: 2.65x; FY25: 4.45x). The improvement is likely to be supported by higher EBITDA per tonne, higher volumes from expanded capacity, including the operationalisation of BF-3 at Vijaynagar, continued cost efficiencies, and structural deleveraging after the significant cash inflow from the slump sale of BPSL's steel business. JSWL received a cash inflow of INR374 billion through the sale of BPSL's assets, leading to the net debt (including acceptances and lease liabilities) lowering to INR722 billion as on 30 June 2026 (FYE26: INR790 billion; FYE25: INR1,018 billion). The company has sizeable capex plans for the next four to five years, with an estimated outlay of INR1,305 billion as on 30 June 2026, of which INR220 billion-240 billion is likely to be incurred in FY27, with a broadly similar annual spending thereafter. However, the planned capex is likely to be funded through internal accruals, thereby limiting reliance on incremental external debt. JSWL’s free cash flow is likely to remain positive over the medium term, despite the company's sizeable capex plans. Better-than-anticipated EBITDA per tonne could provide additional headroom and result in lower-than-expected leverage levels. Ind-Ra also assesses the leverage levels incorporating the proportionate consolidation of JSW JFE Kalinga Steel Limited's (JJKSL) debt and EBITDA, reflecting the strategic nature of the assets and JSWL's potential support obligations, if needed. The agency has not factored in any large acquisitions in its base-case financial projection. EBITDA per Tonne to Improve in FY27, Led by Operating Leverage and Favourable Product Mix: Ind-Ra expects JSWL's consolidated EBITDA per tonne to be in the range of INR12,000-13,000 in FY27, supported by higher operating leverage from the ramp-up of Vijayanagar BF-3, which was operationalised in June 2026, the ramp-up of JSW Vijayanagar Metallics Limited (JVML)’s 5mtpa capacity, improving realisations, a favourable product mix, and healthy demand from end- user industries. Domestic hot rolled coil (HRC) prices are likely to remain elevated, supported by healthy domestic demand. The 11.5% safeguard duties on certain steel imports effective until April 2027, and 11% effective until April 2028, are likely to provide some support to domestic steel prices. The agency expects benign input costs to provide some support to margins despite volatile steel prices. While coking coal costs are also likely to remain elevated, their impact would largely be offset [Showing first 8,000 characters — download PDF for full document]