The Sajjan Jindal Group is planning a holding company modelled on Tata Sons. A private investment company of the promoters -- Jindal South West (so named because Sajjan Jindal firms are located in South and West India) -- is set to emerge as the holding company in which family members will have equal stakes.
The holding firm is for the two companies -- Jindal Iron & Steel Company and Jindal Vijaynagar Steel Ltd.
In the second stage JVSL and Jisco will be merged. The merger is expected to start in about a year.
After it is through, an over Rs 4,000 crore (Rs 40 billion) integrated steel producer with a broad spectrum of products from HR coils to galvanised steel will emerge.
The group has already appointed RSM & Co as adviser for the process. RSM is also the adviser for the plan to split Jisco vertically.
Sajjan Jindal, chairman and managing director of Jisco, told Business Standard: "The restructuring process will enable us to reduce cross-holdings and bring out a clear picture of the group's holding structure. Also, there is no sense in having so many investment companies. However, the plans are still on the drawing board, and we are yet to take a final call on the issue."
The group has already initiated the exercise by deciding to vertically split Jisco into a core steel company and an investment company.
Later, all the investment companies of the group -- Sun Investments, Gagan Trading Company and Vrindavan Services -- will be merged into Jindal South West, which was floated last year with an equity base of about Rs 10 lakh (Rs 1 million).
The family now controls a slew of companies. Apart from Jisco and JVSL, it controls Jindal Strips, Jindal Steel & Power and Jindal Saw Pipes.
The group is headed by patriarch O P Jindal, and the companies are managed by his sons.
While Sajjan manages Jisco and JVSL, Jindal Strips and Jindal Stainless are managed by Ratan Jindal.
Jindal Steel & Power is managed by Naveen, and Prithvi Raj Jindal looks after Jindal Saw Pipes. All the brothers have equal stakes in the O P Jindal Group companies.A holding company structure might also be worked out for these companies, sources close to the development said.