Their companies - Jindal Steel and Power Ltd and JSW Steel Ltd - are in competing talks to buy parts of insolvent Italian steelmaker Lucchini, sources with direct knowledge of the matter said.
Pope Francis earlier this month called for those in power to use their "creativity" to resolve Lucchini's problems. Italy's second-largest steelmaker has tried to sell itself for years but has so far failed to attract investors, forcing it to recently begin idling capacity and putting at risk up to 4,000 jobs.
With Italy still struggling to emerge from its longest post-war recession and unemployment running at 13 per cent - the highest level since at least 1977 - the shutdown of another piece of industrial infrastructure would underline the deep problems facing the euro zone's third-largest economy.
For the Jindals, Lucchini would give them an opportunity to accelerate an expansion of their operations outside of India where steel demand growth has been soft.
And they might not even have to fork out a fraction of the $5 billion that Forbes said the Jindal family is worth; heavy liabilities and a need to protect jobs mean Lucchini could be sold for just one euro, Italian media reports say.
Formerly owned by Russia's Severstal, Lucchini was declared insolvent in 2012 and later placed under "special administration" - a procedure designed to save large firms and avoid heavy job losses. It fell victim to the 2008 recession that has cut Europe's steel demand by about a quarter.
Lucchini's main facilities include a 2.5 million-tonne-per-year steel complex in the Italian town of Piombino equipped with a blast furnace, and a wire rod mill in Lecco in the north of the country.
"Our interest is very preliminary as of now but they have some mills that look interesting," said a source at Jindal Steel.
"I don't think we will be too keen on their blast furnace."
A second Jindal Steel source confirmed the company's interest in the Lucchini facilities.
JSW too is looking at the properties and its senior management could visit Italy next week, a company source and an industry source told Reuters.
Mirko Lami, of Italian union CGIL FIOM, said that they have been informally notified by Lucchini's special administrator Piero Nardi about a meeting between JSW, Lucchini, the government and the unions. But Mr Lami did not know when the meeting would take place.
A source close to Lucchini said the person had no knowledge about a meeting taking place with JSW in coming days.
The sources could not say when a sale decision was likely and that at least Jindal Steel has yet to appoint a financial adviser.
All the sources declined to be named because they are not authorised to talk to the media. A Lucchini spokesman declined comment while a Jindal Steel spokesman did not respond to a request for comment.
A JSW spokesman when contacted said that "as part of its growth strategy, the company looks to evaluate opportunities for growth, both organically and inorganically".
Competing for deals
Apart from Jindal Steel and JSW, Swiss-based trader Duferco had also shown an interest in the facilities before pulling out last month. The world's top steel trader said it had decided not to bid for the Piombino complex because it could not commit to maintaining full employment and keeping the Piombino blast furnace running.
Jindal Steel is controlled by lawmaker Naveen Jindal while JSW's chairman is his elder brother Sajjan. JSW's No. 2 shareholder, Japan's JFE Steel, is the world's ninth-largest steel company.
JSW already owns a plate and pipe mill in the United States while Jindal Steel earlier this week started a 2 million-tonne-per-year plant in Oman.
This is the second time in recent months that the brothers have been pitted against each other on acquisitions, following their rival bids to buy the Indian iron ore assets of UK trader Stemcor. A deal on that has yet to materialise.
India's steel consumption inched up just 0.6 per cent to about 74 million tonnes in 2013-14, the lowest in four years, according to the steel ministry. The brothers' new-found interest in competing for assets reflects the market situation and the strong desire to grow their empires, said analysts.
"In a growing competitive environment, both companies shall be inevitably pitted against each other on asset sales internationally," said Ashima Tyagi, senior consultant at research and consulting firm InfralineEnergy.
Copyright @ Thomson Reuters 2014