CRISIL reaffirms Hindustan Zinc's 'AAA/Stable' ratings, assigns 'AAA/Stable' to new NCDs
A 'CRISIL AAA/Stable' rating signifies the highest degree of safety regarding timely servicing of financial obligations, enhancing the company's ability to raise funds at favorable rates and improving investor confidence.
The reaffirmation of 'CRISIL AAA/Stable' for existing facilities and the assignment of the same highest rating to new non-convertible debentures reflect the company's strong financial health, dominant market position, and efficient operations, indicating a very low credit risk.
CRISIL Ratings has assigned its 'Crisil AAA/Stable' rating to Hindustan Zinc Limited's (HZL) Rs. 1,147 crore non-convertible debentures (NCDs), effective August 8, 2025. * CRISIL also reaffirmed its ratings on HZL's bank facilities and debt programmes at 'CRISIL AAA/Stable/CRISIL A1+'. * The total bank loan facilities rated now stand at Rs. 12,270 crore (reduced from Rs. 12,805 crore). Ratings for Rs. 953 crore NCDs and Rs. 5,000 crore commercial paper (reduced from Rs. 5,612 crore) were also reaffirmed at 'CRISIL AAA/Stable' and 'CRISIL A1+' respectively. * CRISIL highlights HZL's dominant position in the domestic zinc market with approximately 77% market share, efficient and integrated operations, and a strong financial risk profile. * The company's cost of production was USD 1,010 per tonne in Q1 FY26, a decrease from USD 1,107 per tonne in the corresponding period last year. * HZL's operating performance improved in fiscal 2025, achieving a consolidated EBITDA of Rs 17,388 crore, a 25% year-on-year increase. * Metal production reached a record 1,052 KT (10.52 lakh tonnes) in fiscal 2025, up 2% year-on-year. * While Q1 FY26 metal production saw a decline to 250 KT (2.50 lakh tonnes) due to scheduled shutdowns, the company anticipates an increase starting from Q2 FY26 and remains confident in meeting its fiscal 2026 guidance. * HZL maintained robust liquidity with cash and liquid investments totaling Rs 9,340 crore as of June 30, 2025. * CRISIL expects dividend outflow to be materially lower from fiscal 2026 onwards, with strong operating cash accruals (annual EBITDA over Rs 15,000 crore). It anticipates HZL to become net cash-positive this fiscal with a strong capital structure. * CRISIL also noted the management's intent to evaluate possibilities of demerging HZL into multiple entities, though no final decision has been made.
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Hindustan Zinc Limited filed this with the NSE as a statutory disclosure, categorised under credit ratings. It is a primary document, not a recommendation, and the desk marks it high impact, which is the band that most often changes something.
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