India Ratings Upgrades SAIL Issuer Rating to IND AA+/Stable; Affirms CP Rating
India Ratings upgraded SAIL's Long-Term Issuer Rating to IND AA+/Stable from IND AA. The agency affirmed the CP rating at IND A1+ and upgraded the Public Deposit rating to IND AA+/Stable. The upgrade is driven by improved operational performance, increased sales volume, reduced costs, and better leverage ratios. SAIL plans ₹1,000 billion capex over FY27-FY31.
A credit rating upgrade by a major agency like India Ratings can significantly improve the company's borrowing costs, enhance investor confidence, and open up access to a wider range of financial instruments.
The rating upgrade by India Ratings from 'IND AA' to 'IND AA+' with a stable outlook indicates a positive assessment of SAIL's financial health and operational performance.
India Ratings and Research (Ind-Ra) has upgraded Steel Authority of India Limited's (SAIL) Long-Term Issuer Rating and debt instruments to 'IND AA+' with a Stable outlook from 'IND AA'. The rating agency has also affirmed the Commercial Paper rating at 'IND A1+'. The Bank loan facilities rating has been upgraded and affirmed, while the rating on Bonds has been withdrawn. The Public Deposit rating has been upgraded to 'IND AA+/Stable'.
The upgrade reflects an improvement in SAIL's operational performance, supported by increased sales volume and reduced cost of production. The consolidated net adjusted leverage has improved due to a reduction in net debt, following lower working capital requirements, better inventory management, and debt repayment.
Ind-Ra expects the EBITDA per tonne to remain elevated, supported by cost reduction initiatives. The operationalization of the Jagsra and Rowghat mines is expected to support raw material availability and profitability. However, the ratings are constrained by increased capital expenditure (capex) over FY27-FY31, which is expected to increase net adjusted leverage in the near term.
SAIL plans to incur capex and debottlenecking projects of around ₹1,000 billion over FY27-FY31. This capex is likely to be funded through debt (55%-65%) and internal accruals. The company's liquidity is considered adequate, with sufficient unutilised limits and positive cash flow from operations expected to remain strong.
A plain-language summary of a public exchange filing by Steel Authority of India Limited. Read the original for the full detail.