• R1

  Macroeconomic Risk

Impact

The macroeconomic risks of trade tensions, geopolitical conflicts could impact global growth and steel demand.

• The global growth outlook has been impacted by the trade tensions, sparked by the tariff policies of the new US administration. The initially announced tariffs by the US in early April have been subsequently diluted through various announcements and bilateral trade discussions. Apart from trade tensions, geopolitical risks remain significant with continuing conflicts between Russia and Ukraine, and in the Middle East.
• China, which accounts for nearly half of the worldsteel industry, recorded a 5% decline in consumption in 2024, mainly due to the structural challenges that its real estate industry is witnessing, leading to increased steel exports from China causing over supply and subdued steel pricing.

Mitigation measures

• Majority of our products are sold in the Indian domestic market – Our revenue within India accounted for 86.44% of our total consolidated sales.
• Focus on value added product mix protects our margin from the volatility in commodity related steel products.
• Indian trade measures like safeguard duty expected to support steel prices.

Mitigation measures

• Built 34.2 MTPA steelmaking capacity in India - a market where steel demand is growing by 11% to 12%.
• Focus on value added products for protection against price volatilities. The share of value added and special steel products share in sales mix was 62% in FY 2024-25.
• Steel prices and raw material prices of iron ore and coking coal move in tandem although with a lag.
• Drive cost reduction projects to improve profitability – Increased usage of Renewable Energy, fuel optimisation measures, slurry pipe line for transporting iron ore from mines to Jatadhar port to reduce logistics cost.

• R3

  Raw material availability and cost of iron ore and coking coal

Impact

Our primary raw materials, iron ore and coking coal, and other commodities like thermal coal, natural gas, contribute to a significant portion of our operating costs. Iron ore, coking coal and other commodities' prices and availability depend on:

• Global price and currency fluctuations and parity of landed cost considering price, freight, tariff and exchange rates.
• Government policies on mining, allocation and tariff.
• Domestic demand-supply gap, interruptions in production by suppliers, demand for raw materials and suppliers’ allocation to other purchasers leading to the risk of production disruptions due to non-availability of the above materials.
• Uncertainty in availability given that no major additional capacities are being added globally.
• Few of the commodities have high dependence on certain geographies.

Mitigation measures

Iron ore

• Iron ore requirements are met by optimum blend of captive mines and balance sourcing from vendors in Odisha and Karnataka – Captive sourcing accounted for 37% of our Company’s iron ore requirements in FY 2024-25.
• Regional sourcing of iron ore to optimise logistics cost.
• Augment the iron ore captive mines by participating in mine auctions conducted by the government.
• Hedging of iron ore prices to protect from price volatility risks
• Procurement of raw materials linked to benchmarked indices and discount to benchmark.

Coking coal

• Prices are expected to remain volatile in view of the global geopolitical events.
• Diversifying sources across various geographies to ensure availability of coking coal. Sourcing being done from countries like Canada, USA, Australia, Indonesia and Mozambique.
• Blending of different types of coal to minimise the impact of rising prices.
• Trial of new grades of coal for better value in use to reduce the cost of sourcing.
• Exploring global opportunities for acquisition of suitable stake/ strategic alliance in coking coal mines.
• Operationalising captive domestic mines won in recent auctions.
• Procurement of raw materials linked to benchmarked indices and discount to benchmark.

• R4

  Infrastructure and logistics supply chain risk

Impact

Increasing production capacity from 35.7 MTPA to 50 MTPA results in logistics risks such as:

• Scarcity or non-availability of rakes for inward and outward transportation.
• Congestion of vehicles/rake at the entry and exit points leading to the disruption in the plant operations.
• Risk of accidents with the increase in the road traffic.
• Port logistics and constraints.

Mitigation measures

Infrastructure improvement has been undertaken to ensure seamless flow of inbound material and outbound goods. Some of these are:

• Long-term contracts with port service providers for raw material handling.
• Enhancing operational efficiency of pipe conveyor at Vijayanagar and increasing capacity to 20 MTPA to reduce dependence on road transport for iron ore movement from Karnataka mines to plant.
• Implementation of 30 MTPA slurry pipe project to cater to iron ore movement from mines to ports for onward movement to plant locations.
• Investment in own rakes through General Purpose Wagon Investment Scheme and SFTO (Special Freight Train Operator) for customised rakes.
• Long-term shipping contracts with vessel owners.
• Additional rail/road entry and exit points for enhanced volumes planned.
• Additional storage yards for iron ore fines and coking coal.
• Implementation of digital logistics solutions to track and monitor.

• R5

  Mergers and acquisitions

Impact

• Risk of acquisition at value greater than fair value may impact Return On Capital Employed (ROCE); and thus adversely impact debt and interest servicing.
• Challenges in turn around and scale up or delay may drag the profitability.
• Old Litigation may impact JSW group earnings and erode stakeholders value.

Mitigation measures

Pre-Merger

• Conduct site visit of targeted acquisition.
• Carry out due diligence that mainly includes finance, tax and legal aspects; this helps identify risks and plan strategies for mitigation.
• Look for synergies to improve margins and profitability.
• Design finance model taking input from strategy, business development to decide on the optimum mix for capital structure.
• Our Company employs a conservative approach in bidding to ensure that the net debt to EBITDA and net debt to equity are maintained below the threshold levels.

Post-Merger

• Implement various systems like Legal Compliance software, SAP and ARIBA in new company to strengthen governance process.
• Revise Delegation of Power in new entity.
• Grades & People Policies are harmonised.
• Leverage cost leadership strength in merged entity.
• Implement operational and financial best practices existing at JSW Steel Group.

• R6

  Market Risk

Impact

Risk on ability to export due to regulation change and country specific restrictions:

• Excessive exports by China, Japan & Korea due to significant depletion of domestic demand.
• Thrust on localisation by major advanced economies to protect domestic demand for their domestic steel producers.
• Protective measures taken by Europe and Brazil.
• EU- Emission Trading System compliance & Fuel Maritime compliance leading additional ocean freight cost.
• Europe accelerated commitment to Climate Norms.

Mitigation measures

• There is robust growth in domestic steel demand at 11% to 12% and the domestic market should be able to consume the Incremental quantity every year.
• We have capabilities and product offering that give flexibility to capitalise on the export markets as and when required.
• Global presence across regions.
• Government of India is working on FTA’s with EU /UK and other parts of world to mitigate risk of onslaught of tariffs from US.

• R7

  Foreign exchange fluctuations

Impact

Foreign exchange fluctuations and commodity price fluctuations impact profitability.

Mitigation measures

• A robust hedging policy in place to mitigate the risk of currency and commodity fluctuations and reviewed by Board.
• Hedging strategy with a judicious mix of forward contracts and options.
• Adequate Hedging of long-term capital liabilities

• R9

  Occupational health and safety

Impact

The steel sector is subject to extensive health and safety laws, regulations and standards. Any safety lapses would result in damage or destruction of property, assets & human capital.

Mitigation measures

Ensuring compliance with local and international laws, regulations and standards with a primary focus on protecting employees and communities from harm and operations from business interruptions.

• Certified for ISO 45001 - Safety Management systems and in compliance with International Best practices in Safety management.
• Matured Safety Governance Structure is established including Group Safety Council, Group Level Sub Committee, Safety Steering Committee, Apex safety Committee and other sub committees for review of safety aspect, fatal accidents/near miss accidents, if any.
• Periodic Safety Inspections, Internal and External Safety Audits ensure that our systems are properly implemented and compiled.
• Regular safety trainings are conducted based on the training needs identified across different skill levels of both staff and workmen.
• Mandatory usage of PPE’s such as safety shoes, Safety helmets, appropriate Hand gloves etc., as per the PPE Matrix is strictly implemented at all our plants.
• Safety made a mandatory Key Result Area for employees.
• Medical facilities, medi-claim policy cover for employees and their families; Group insurance policy for employees.
• Robust security arrangements like security check post, entry pass/identity cards, access control system, CCTVs at critical locations.
• Subject Matter Experts (SME) Training has been launched, covering Group Safety Standards to enhance employee competence, with several participants already certified as SMEs.
• 15 Group-Level Safety Standards are being updated or newly developed to strengthen safety practices, alongside the creation of Visual Standard Guidance for key standards.
• Safety Reward and Recognition Guidelines have been introduced at the Group level.
• A Group-wide Standardised Consequence Management System is being implemented to ensure a consistent and progressive approach to addressing safety violations.
• The 'Safety Chatbot' at JSW enables employees to access safety standards and guidance instantly via text or voice commands in multiple languages.

• R10

  Compliance risk

Impact

Evolving regulatory framework may have material impact on operations. Deviation in compliance and non-adherence may impact reputation.

Mitigation measures

• Robust Legal Compliance management systems to ensure awareness and compliance.
• Technology is being utilised to track compliance, timelines with suitable escalations, action plans and reviews.
• Compliance review by Senior Management and Board of Directors on quarterly basis and initiation of remedial action.

• R11

  Cyber security

Impact

Cyber security risk could damage reputation and lead to financial loss. Such threats arise from:

• Theft of corporate information.
• Theft of financial information (e.g., financial results and bank details).
• Ransomware – cyber extortion.
• Disruption to business (e.g. online payments).
• Loss of business or contract.

Mitigation measures

All the Information technology management system confirms to ISO 27001:2013.

• Controlling system vulnerability through:
  • Vulnerability assessment and penetration testing for all public facing assets.
  • Firewall hardening rule sets implemented.
  • Firewall remediation tool deployed and improvements done in identified areas.
• Breach assessment done with subject expert partners through:
  • Strengthening the cyber security posture; carried out selfassessment and continuous monitoring going on.
  • Third-party view and peer comparison undertaken.
  • Cyber security awareness programme conducted across all the locations in view of growing threats of cyberattacks due to increased online trades and transactions.
  • Multifactor Authentication for Critical IT services (Remote VPN Access).
  • Network Visibility and Access Control (NAC) Solution.
  • Monitor threats and respond, investigate and remediate cyber security related incidents and data breaches.
  • Subscribed to cyber insurance policy.
  • Prevention mechanism for Distributed Denial of Services (DDoS).
  • Endpoint Detection & Response (EDR) Solution deployed.

• R12

  Carbon Border Adjustment Mechanism risk

Impact

The Carbon Border Adjustment Mechanism (CBAM) is essentially the European Union’s (EU) new carbon tariff, designed to be in alignment with the EU’s domestic Emission Trading System (ETS). It puts a price on the carbon emitted during the production of certain carbon intensive goods that are entering the EU.

While the financial implications of carbon tariffs will be evident in the beginning 2027, the penalties of non-reporting or incorrect reporting cannot be ruled out in the transitional phase which has set in from October 1, 2023 – December 2025.

Similar carbon tariff regimes are expected to be adopted by various other nations, with the UK declaring its CBAM regime to be introduced from January 2027.

Mitigation measures

• Internal systems have been designed and established to ensure the CBAM compliance of timely reporting are met with. This includes identification of products being exported to EU from each plant, mapping of the production processes, and calculation as prescribed by the regulation guidance provided for CBAM.
• The quarterly submissions to EU importers as required during the transition phase have been initiated.
• Looking at the evolving regimes of Carbon Tariffs becoming a requirement in international trade, JSW Steel proposes to set up a 4 MTPA green steel/low emission steel factory at Salav to cater to such requirements.

• R13

  Environment protection and climate change

Impact

Steelmaking inherently involves emission of CO₂, dust and other co-products gases/waste (slag) along with water consumption that pose a risk to environment and sustainable growth.

• There is a need to decarbonise steel making for environmental sustenance for which India has committed to achieve net zero emissions by year 2070. In India, as elsewhere, climate action is intensifying but any drastic change in carbon emission regulations may adversely impact our business and operations. Compliance with new and more stringent environmental obligations related to greenhouse gas (GHG) emissions may require additional capital expenditure or modifications in operating practices and additional reporting obligations. Capacity expansion projects require adherence to legal requirements like environmental assessments, environmental impact studies and/or plans of development before commencing work.
• Water availability along with climate change is also posing a risk to our operations due to its imminent importance in steel making. Resultant weather patterns relating to climate change may pose a challenge for water availability for operations.
• Expiration or delay in approvals could prevent us from carrying out our operations in full.

Mitigation measures

• We are complying with all the applicable statutory norms through use of Best Available Technologies (BATs).
• We select the right equipment, technology, processes, inputs and we monitor and report our sustainability parameters to stakeholders.
• We have started using renewable power in steel making aiming to increase the use of renewables in steel making every year.
• We have also installed advanced technologies like MEROS in sinter plants to further reduce dust emissions which are capex intensive.
• Slag to sand projects, waste plastic usage in steelmaking, have been innovated and implemented to constantly ensure circularity in operations enabling waste management practices.
• We are operating with innovative process such as Carbon Capture and Utilisation diverting the captured carbon to different applications for use.
• For our mining operations, we have undertaken comprehensive Reclamation & Rehabilitation (R&R) programmes, in line with government mandates, and ensuring enhancement & preservation of biodiversity.
• Utilisation of waste heat and waste process gases is being practiced to ensure energy efficiency.
• Product sustainability is a focus area we have obtained Environment Product Declarations (EPDs) for our finished products. Three of our products are GreenPro certified.
• We have implemented water-efficient technologies and ensure maintenance of Zero Liquid Discharge at our operations.
• We believe in transparent disclosure of information through various platforms such as CDP, S&P CSA and worldsteel.