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JSW Steel will be setting up a 50:50 joint venture with Japan-based JFE Steel Corporation and will be investing Rs 5,500 to set up a plant in Karnataka, the company said in a stock exchange filing on Tuesday.

The new company will be named JSW JFE Electrical Steel Private Limited and will have its manufacturing base in Bellary, Karnataka. Production is likely to commence in FY27, the company said. It may further expand the capacity to meet growing demand for grain-oriented electrical steel in India.

"This collaboration is a milestone development, as it would be the first company to have end-toend manufacturing of Grain Oriented Electrical Steel products in India. The JV Company aspires to cater to the surging domestic demand for Grain Oriented Electrical Steel and contribute significantly to the country's energy infrastructure," JSW Steel said in a statement.

Grain-oriented electrical steel is an essential core material for distribution transformers, power transformers, and small transformers.

JSW Steel in January reported its Q3 earnings. The steel company saw a significant increase in consolidated net profit, reaching Rs 2,450 crore in the December quarter of 2023-24, driven by robust domestic demand. This marks a five-fold rise compared to the net profit of Rs 474 crore in the corresponding period of the previous year. Quarterly income also rose to Rs 42,134 crore from Rs 39,322 crore year-on-year.

"The strong performance was driven by capacity utilisation rising to 94 per cent during the quarter vs 89 per cent in Q2 FY24 at the Indian operations," the company said in a statement.

JSW Steel serves as the main business entity within the diversified JSW Group, which boasts a total valuation of USD 23 billion. The conglomerate is involved in various sectors, including energy, infrastructure, cement, paints, sports, and venture capital.