CareEdge

Rating agency CareEdge on Wednesday upgraded Jindal Stainless’s credit ratings from AA-/stable to AA/stable on the long-term bank facilities and non-convertible debentures. 

The rating on the short-term bank facilities has been reaffirmed at CARE A1+.

Abhyuday Jindal, Managing Director, Jindal Stainless, said, “We look forward to sustaining this momentum through operational excellence, besides fostering an ecosystem dedicated to stainless steel for increased awareness and adoption in the country.”

The ratings agency has revised its outlook in view of the performance of the company demonstrated by its consistently improving sales volumes and higher than envisaged Profit Before Interest, Lease rentals, Depreciation and Taxation (PBILDT) per tonne over the last two years. The agency also considered the company’s persistent improvement in its debt coverage metrics. It noted that Jindal Stainless has recorded “steady-state improvement” in its sales volumes over the last three years and that it expects the likely continuation of increase in sales volume over the next two years with the commissioning of an additional one million tonnes per annum (mtpa) capacity at Jajpur, Odisha.

Group CFO and Executive Director, Jindal Stainless, Anurag Mantri, said, “Jindal Stainless’ improved ratings is testimony to our prudent capital allocation policy and robust balance sheet management. Despite being in organic and inorganic capex cycle, our leverage ratios are amongst the best in the industry. We continue to focus on efficient working capital management and financial discipline to maximize value for all our stakeholders.”

Within the corporate sector, CareEdge Ratings rate debt instruments and bank facilities of manufacturing entities, service entities, trading entities, PSUs, etc. While evaluating, CareEdge Ratings also considered the company’s increasing focus to diversify its product portfolio by including long stainless steel products through the acquisition of Rathi Super Steel Limited, entering into a collaboration agreement with New Yaking Pte Ltd to obtain 49 per cent stake in a Nickel Pig Iron smelter facility in Indonesia, the successful merger of Jindal Stainless (Hisar) Limited into Jindal Stainless, the expansion to achieve a melt capacity of ~3 million tonnes per anum, and acquisition of remaining 74 per cent stake in Jindal United Steel Limited (JUSL), thereby making JUSL a wholly-owned subsidiary.

In a separate development, CareEdge Ratings also revised the long-term bank facilities of JUSL from CARE AA-; Stable to CARE A+; Positive. This rating upgrade was carried out on the basis of “sustained improvement in the operational performance, expanded capacity, and envisaged growth in tolling volumes”.