Jindal Strips got the backing from the market on Monday for its decision to sell off its US plant for $8 million.

The scrip of the Jindal group steel manufacturer climbed 3.33% to Rs 66 by 10:05 IST. And by that time, volumes on the counter touched 4,600 shares on BSE.

In the five sessions between 14 and 21 February 2003, Jindal Strips had emerged higher by 8.4% to Rs 160.65 from Rs 148.25.

The scrip has been further boosted today by reports that it is close to selling its US plant, Massillon Steel, for $8 million (over Rs 38 crore). Jindal Strips had acquired Massillon Steel for $3.5 million less than two years ago. Despite the relatively recent acquisition, the company is hiving off the plant on a restructuring recommendation by Ernst and Young. Under the company's restructuring plan, all non-core investments are being de-merged, to be subsequently phased out.

Jindal Strips has a 61% stake in Massillon Steel. The company makes stainless CR, from hot-rolled steel sourced partially from the group's Hissar facility in Haryana. The products serve a growing US stainless steel market that also includes high-end auto applications.

Jindal Strips was incorporated in November 1970 and became public in 1975. It was promoted by O P Jindal and associates. The company, which started with a single plant at Hisar, has become a multi-plant, multi-location company. It manufactures stainless steel strips at Hisar, wide strip hot and cold-rolled coils from imported slabs at Vasind, and sponge iron at Raigarh. JSL is one of the few companies in the iron and steel industry without any technical collaboration; all its technology is developed in-house. The stainless steel produced by the company is mostly used for utensils, while cold-rolled coils are partially used by a group for GP/GC sheets and the remaining is sold to the automobile and two-wheeler industry.

Jindal Strips is one of India's largest stainless steel producers with a market share of 40%.

For the third quarter ended 31 December 2003, JSL registered an impressive net profit of Rs 31.25 crore compared to Rs 9.01 crore in the corresponding period of the previous year. Net sales increase by 20% to Rs 463.44 crore (Rs 4.63 billion) from Rs 385.91 crore (Rs 3.85 billion) in DQ 2001.

As on 31 December 2002, promoters held 56.5% stake in JSL, while the public and institutions (including both domestic and foreign) held 29.39% and 5.64% stake, respectively.