Jindal Steel & Power Ltd (JSPL) is having a mixed run today. The stock opened over 1% higher at Rs.163.45 but from there, it slipped into the red, going down almost 6% to Rs.152.30.

The news from the company was actually good but the stock seems to be following the laggards, metal index. The company’s subsidiary in Mauritius has accepted a binding offer from Templar Investments to divest its entire stake in its Oman asset, Jindal Shadeed Iron and Steel Co LLC (JSIS Oman).

The divestment is in line with JSPL’s vision and commitment to continuously bring down its debt and deleverage its balance sheet.

The enterprise value of the deal is over US $1 billion.

This is a good move and very much expected as its divestment was the way to deleverage the balance sheet, bring down the debt.

As at 31st March 2020, JSPL’s consolidated net debt stood at Rs.35,919 crore and it had repaid Rs.3200 crore in FY20. In current fiscal, Rs.3300 crore overseas debt and Rs.2800 crore in India is maturing and this sale of the Oman unit is expected to bring down net debt by around Rs.7500 crore.