Strategic importance to Central Government
OSCSCL is responsible for procurement of paddy and supply of rice to Odisha under public distribution system. OSCSCL acts as an implementing agency of the Government of Odisha (GoO) and handles the responsibilities of purchase, procurement, storage and delivery of the stock to the retail dealers in the state. OSCSCL is also the nodal agency for several schemes of GoO (Annapurna, APL Rice and APL wheat scheme). OSCSCL procures paddy directly from farmers at over 4,000 procurement centers at MSP and then private millers transport it to 1,407 rice mills for processing. Roughly half the rice goes to state godowns, supplied to Fair Price Shops, and distributed free of cost to beneficiaries under both state and central ration card systems, while the rest is supplied to FCI for the central pool stock. Procurement happens in both Kharif and Rabi seasons, OSCSCL handles 20–24 lakh MT of rice annually through 163 receiving centers and 1,360 millers, the corporation ensures statewide coverage and steady growth in scale.

Support from government 
The central and state government extends financial support to the company at regular interval in order to meet the losses. OSCSCL submits quarterly reimbursements against the Fair price shops sales to Central Government. OSCSCL is spread across 30 districts in Odisha and accounts for nearly 60 percent of the paddy procured in Odisha. OSCSCL is a systemically important entity and caters to over 80 percent of the population in the state. Hence, in the absence of the company’s operations, procurement from farmers will get impacted. As a result, OSCSCL continues to receive operational, managerial and financial support from GoO from time to time. The board of directors of OSCSCL comprises appointees by the state government. The operations are supervised by the Food Supplies and Consumer Welfare Department of the GoO. Further GoO has extended guarantee on OSCSCL borrowings to an extent of Rs 17,500 Cr. Hence, the rating derives comfort from the ongoing support in the form of reimbursements from government to OSCSCL over the medium term.

Healthy scale of operations
OSCSCL has operations in all 30 districts of Orissa. Paddy is procured directly from farmers at more than 4,000 procurement centers (Mandis), ensuring purchase at the minimum support price. The revenue of the company (including subsidy) stood at Rs.19,028.69 Cr. in FY2025 against Rs 18,834.21 Cr. in FY2024. The 10MFY2026 revenue stood at Rs.8,520.11 Cr.

­Weak financial risk profile
The organization is a non for-profit organisation with all produces being either sold on free of cost (later reimbursed from Government) or sold on cost to FCI. Further, receipts from Govt & FCI are received on a quarterly basis and 7 days from billing respectively, however, credit period provided by farmers and other intermediates is less, therefore, funds are required to match the temporary cashflow mismatches. Hence, with a low net worth, the working capital borrowings are high. Moreover, interest coverage ratio remains low at 1.00 times.  Total debt of the company stood at Rs.26,954.57 Cr as of 31st March 2025 against Rs.21685.83 Cr. as of 31st March 2024.

Acuite believes that the financial risk profile will continue to remain weak over the medium term on account of high reliance on short term limits due to delays in receiving the subsidy from the government.

­Working capital intensive nature of operations
OSCSCL has a working capital intensive nature of operations, marked by high gross current asset (GCA) days of 583 days in FY2025, as against 493 days in FY2024. The elevated GCA days are primarily due to a large proportion of other current assets, consisting of receivables from the Government and its agencies, along with advances to suppliers. Further, debtor days stood at 111 days in FY2025 compared to 104 days in FY2024, while inventory days remained high at 427 days in FY2025 as against 324 days in FY2024. The average bank limit utilization for fund-based limits stood at ~79.78% in the last six months ending January 2026.

Going ahead, Acuite believes that the working capital operations of the company will remain at similar levels, as evident from the stretched collection mechanism and elevated inventory levels over the medium term.