Sumitomo Corporation has picked up 49 per cent in Mukand Limited's speciality steel business for Rs 11.81 billion.
The deal will enable Mukand to tap new business opportunities, increase exports and reduce its debt.
The two companies had signed a MoU last year and concluded the transaction on Friday. The joint venture is engaged in rolling, finishing and marketing of steel wire rods and bars and plans to set up new rolling facilities in Hospet in Karnataka by 2020. The JV business has a revenue of around Rs 22 billion.
"Our debt is around Rs 30 billion and after this transaction, it will reduce to Rs 18 billion," said Niraj Bajaj, chairman, Mukand Ltd.
The JV company supplies speciality steel to automobiles and auto component manufacturers in India and overseas. It also sees strong demand from the sector.
“Demand for steel in India is strong and we remain optimistic about growth,” said Rajesh Shah, co-chairman of Mukand Ltd.