Press Release

Press Release

April 08, 2026

FORACE SPECIALITY CHEM PRIVATE LIMITED
Rating Assigned and Reaffirmed

Product	Quantum (Rs. Cr)	Long Term Rating	Short Term Rating
Bank Loan Ratings	115.00	ACUITE A- \| Stable \| Assigned	-
Bank Loan Ratings	305.65	ACUITE A- \| Stable \| Reaffirmed	-
Bank Loan Ratings	85.00	-	ACUITE A1 \| Reaffirmed
Total Outstanding	505.65	-	-
Total Withdrawn	0.00	-	-

Rating Rationale

Acuite has reaffirmed its long-term rating of 'ACUITE A-' (read as ACUITE A minus) and short term rating of 'ACUITE A1' (read as ACUITE A One) on the Rs.390.65 Cr. bank facilities of Forace Speciality Chem Private Limited (FSCPL). The Outlook is 'Stable'.

Acuite has assigned its long-term rating of 'ACUITE A-' (read as ACUITE A minus) on the Rs.115.00 Cr. bank facilities of Forace Speciality Chem Private Limited (FSCPL). The Outlook is 'Stable'.

Rationale for Rating
The reaffirmation of the ratings reflects the group’s established track record of operations and the extensive industry experience of the promoters, spanning over four decades. The ratings also take into account the improving scale of operations, supported by an increase in sales volumes, a moderate financial risk profile, and an adequate liquidity position of the group.

However, these strengths are partly offset by the working capital–intensive nature of operations, as evidenced by elevated gross current asset (GCA) days. Further, profitability remains vulnerable to fluctuations in raw material prices.

Acuite notes that the group has undertaken a strategic initiative to consolidate its manufacturing operations under a single entity, namely Forace Specialty Chem Private Limited (FSCPL). In line with this strategy, FSCPL entered into a Business Transfer Agreement (BTA) with Forace Polymers Private Limited (FPPL) in April 2024 to acquire FPPL’s manufacturing units on a slump sale basis for a total consideration of Rs. 114.50 crore. As part of the consideration, FSCPL issued 11% Non-Cumulative Redeemable Preference Shares (NCRPS), redeemable after 20 years, to FPPL. Effective FY2025, the entire manufacturing operations, along with all associated banking facilities, have been consolidated under FSCPL. Post-restructuring, Forace Polymers Private Limited retains ownership of its truck fleet and continues operations in the transportation and logistics segment.

Acuite has continued to adopt a consolidated analytical approach in the present review, as a portion of the manufacturing segment revenues for FY2025 continues to be booked in Forace Polymers Private Limited (FPPL). However, with the clear segregation of business profiles from FY 26 within the group entities, Acuite may revise its analytical approach for FSCPL from the next review to a standalone basis.

About the Company

Forace Speciality Chem Private Limited was incorporated in the year 2017. It is based in Uttarakhand. The company is engaged in manufacturing foundry binders, coatings and other foundry chemicals for all major foundries and production of Phenolic Resins & also exports its products to various countries around the world. The current directors of the company are Mrs. Sonia Garg, Mr. Vikas Garg, Mr. Saksham Garg, Mr. Sparsh Garg, Mr. Suresh Chandra Gupta, Mr. Dipak Kumar Ghosh and Mr. Mukesh Kumar Kailash.

About the Group

Forace Polymers Private Limited (FPPL) was established in the year 1980 by the late Mr S. K. Garg. Since 2001, FPPL is being managed by Mr Vikas Garg, son of the late Mr S. K. Garg. The company is engaged in the manufacturing of Phenolic Resins having its applicability in many industries including foundry, refractory, abrasives, friction and rubber. FPPL has a manufacturing plant in Haridwar (Uttarakhand) India, with its sales office-cum-service centres spread PAN-India, positioned in major cities including Coimbatore, Jamshedpur, Mumbai, etc.

Unsupported Rating

Not Applicable.

Analytical Approach

Extent of Consolidation

•Full Consolidation

Rationale for Consolidation or Parent / Group / Govt. Support

Acuite has consolidated the business and financial risk profile of Forace Speciality Chem Private Limited and Forace Polymers Private Limited together consider as Forace Group (FG). The consolidation is in the view of common management and strong operational & financial linkages between the entities.

Key Rating Drivers

Strengths

Experienced management and established track record of operations
The group is managed by the Garg family, which has an industry experience of over four decades in the same line of business. The promoters’ extensive experience has enabled the group to establish a strong reputation and brand presence over the years. This has also aided in developing long-standing relationships with reputed customers such as Mahindra & Mahindra Limited and Jindal SAW Limited, among others. Further, the group is undertaking product diversification by entering into non-vanilla product segments such as paint, tyre, and rubber resins through the setting up of a new manufacturing facility. The project involves a total estimated capital outlay of approximately Rs. 200 crore, to be funded through a mix of external debt of around Rs. 157 crore and the balance through internal accruals and unsecured loans. The plant is expected to commence operations from July 2026. The management expects the diversification initiative to result in an expansion in the scale of operations and improvement in profitability margins from FY2028 onwards.

Acuite believes that the group will continue to benefit from the promoters’ extensive industry experience, which is expected to support timely completion of the ongoing capital expenditure as well as sustain established relationships with suppliers and customers over the medium to long term.

Improving scale of operations albeit decline in profitability margins
The group’s revenue from operations increased by 8.32% to Rs. 822.22 crore in FY2025, compared with Rs. 759.06 crore in FY2024. The growth was primarily driven by an increase in sales volumes of approximately 9% during the year. However, operating profitability margin witnessed a marginal decline to 8.44% in FY2025 from 9.59% in FY2024. The moderation in margins was mainly attributable to the transition of manufacturing operations from one group entity to another during the year, which resulted in lower absorption of fixed costs. The net profit margin also declined marginally to 3.95% in FY2025 from 4.13% in FY2024. Further, the FSCPL reported net revenues of Rs. 632.81 crore for the period ended December 2025.

Acuite expects the group’s scale of operations and profitability to improve over the near to medium term, supported by higher sales volumes and gradual stabilisation in price realisations coupled with the expansion project.

Moderate financial risk profile
The group’s financial risk profile remains moderate, characterised by an improving net worth, which increased to Rs. 237.48 crore as on March 31, 2025, from Rs. 207.55 crore as on March 31, 2024. However, the gearing level of the group witnessed a marginal deterioration and stood at 1.21 times as on FY2025, compared to 1.01 times in FY2024, primarily on account of the ongoing debt-funded capital expenditure undertaken by the group. Despite the increase in leverage, the capital structure remains supported by an improvement in the Total Outside Liabilities to Tangible Net Worth (TOL/TNW), which improved to 1.87 times in FY2025 from 2.08 times in FY2024. The group’s debt protection metrics are comfortable, marked by ISCR and DSCR of 3.75 times and 1.48 times, respectively, in FY2025. Further, the return on capital employed (ROCE) stood at 13.52% during FY2025.

Acuite believes that, going forward, the group’s financial risk profile is likely to remain moderate over the near to medium term, primarily on account of the ongoing debt-funded capital expenditure.

Weaknesses

Intensive working capital operations
The group’s working capital operations are intensive, as reflected in elevated Gross Current Asset (GCA) days, which stood at 179 days in FY2025, although improved from 210 days in FY2024. The working capital intensity is mainly driven by high debtor realisation days, which remained elevated at 110 days in FY2025. The elongated receivable cycle is largely attributable to the structural characteristics of the group’s business, including extended credit periods offered to strong clientele and foundry customers, the presence of export sales that inherently involve longer realisation cycles, and the working-capital-intensive nature of the foundry chemicals and phenolic resin industry. Additionally, the recent scale-up in operations during 9M FY2026 has temporarily inflated receivables. Nevertheless, Acuite considers these factors to be industry-normal and manageable, supported by the group’s adequate liquidity position and established customer relationships. Inventory holding remained stable, with inventory days standing at 64 days in FY2025.

Acuite believes that, going forward, the group’s working capital operations will continue to remain intensive over the near to medium term, given the inherent nature of its operations.

Profitability susceptible to volatility in prices of raw material
The key raw materials used by the group are base chemicals derived from natural gas and crude oil. Accordingly, operating performance remains exposed to fluctuations in crude oil linked input prices, which are inherently volatile. The vulnerability is further accentuated by the prevailing global geopolitical situation, including ongoing conflicts and tensions in key oil-producing regions, which continue to create uncertainty in global energy markets and may lead to sharp price movements. Such volatility in raw material prices can impact procurement costs and, in turn, profitability.

Acuite believes that the group’s ability to pass on a portion of the input cost fluctuations to its customers, particularly in the prevailing geopolitical environment, in order to sustain operating margins will remain a key monitorable factor over the near to medium term.

Rating Sensitivities

Potential triggers (individual or collective) for an upward rating action:

Timely execution and completion of the ongoing capital expenditure.
Improvement in scale of operations by around 20–25%, with improving profitability margins.

Potential triggers (individual or collective) for a downward rating action:

Significant decline in the scale of operations of around 20%, and deterioration in operating margins below 7.5%, leading to weakened cash accruals and a mismatch against debt servicing obligations.
Any additional debt-funded capex (other than the ongoing), which may adversely impact the financial risk profile.

Liquidity Position

Adequate

The group’s liquidity position is adequate, supported by net cash accruals of Rs. 40.64 crore against debt obligations of Rs. 21.18 crore during the same period. The average utilisation of fund-based working capital limits remained moderate at 83.28% for the six months ended December 2025. The group maintained a cash and bank balance of Rs. 10.79 crore as on March 31, 2025 which provides further cushion to the liquidity position. Further, the current ratio remained modest at 1.14 times in FY2025. Acuite believes that the group’s liquidity position is likely to remain adequate over the near to medium term, supported by steady cash accruals, despite the ongoing capital expenditure within the group.

Outlook - Stable

Other Factors affecting Rating

None.

Key Financials

Particulars	Unit	FY 25 (Actual)	FY 24 (Actual)
Operating Income	Rs. Cr.	822.22	759.06
PAT	Rs. Cr.	32.48	31.37
PAT Margin	(%)	3.95	4.13
Total Debt/Tangible Net Worth	Times	1.21	1.01
PBDIT/Interest	Times	3.75	4.96

Status of non-cooperation with previous CRA (if applicable)

Not Applicable

Any Other Information

None.

Applicable Criteria

• Application Of Financial Ratios And Adjustments: https://www.acuite.in/view-rating-criteria-53.htm
• Consolidation Of Companies: https://www.acuite.in/view-rating-criteria-60.htm
• Default Recognition: https://www.acuite.in/view-rating-criteria-52.htm
• Manufacturing Entities: https://www.acuite.in/view-rating-criteria-59.htm

Note on complexity levels of the rated instrument

In order to inform the investors about complexity of instruments, Acuité has categorized such instruments in three levels: Simple, Complex and Highly Complex. Acuite’s categorisation of the instruments across the three categories is based on factors like variability of the returns to the investors, uncertainty in cash flow patterns, number of counterparties and general understanding of the instrument by the market. It has to be understood that complexity is different from credit risk and even an instrument categorized as 'Simple' can carry high levels of risk. For more details, please refer Rating Criteria “Complexity Level Of Financial Instruments” on www.acuite.in.

Rating History

Date	Name of Instruments/Facilities	Term	Amount (Rs. Cr)	Rating/Outlook
16 Jan 2025	Cash Credit	Long Term	80.00	ACUITE A- \| Stable (Assigned)
	Term Loan	Long Term	13.23	ACUITE A- \| Stable (Assigned)
	Term Loan	Long Term	25.00	ACUITE A- \| Stable (Assigned)
	Term Loan	Long Term	2.44	ACUITE A- \| Stable (Assigned)
	Cash Credit	Long Term	43.00	ACUITE A- \| Stable (Assigned)
	Term Loan	Long Term	4.90	ACUITE A- \| Stable (Assigned)
	Term Loan	Long Term	33.58	ACUITE A- \| Stable (Assigned)
	Proposed Long Term Bank Facility	Long Term	168.50	ACUITE A- \| Stable (Assigned)
	Letter of Credit	Short Term	20.00	ACUITE A1 (Assigned)

Annexure - Details of instruments rated

Lender’s Name	ISIN	Facilities	Date Of Issuance	Coupon Rate	Maturity Date	Quantum (Rs. Cr.)	Complexity Level	Rating
H D F C Bank Limited	Not avl. / Not appl.	Cash Credit	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	80.00	Simple	ACUITE A- \| Stable \| Reaffirmed
AXIS BANK LIMITED	Not avl. / Not appl.	Cash Credit	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	43.00	Simple	ACUITE A- \| Stable \| Reaffirmed
State Bank of India	Not avl. / Not appl.	Cash Credit	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	50.00	Simple	ACUITE A- \| Stable \| Reaffirmed
ICICI BANK LIMITED	Not avl. / Not appl.	Cash Credit	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	1.90	Simple	ACUITE A- \| Stable \| Reaffirmed
ICICI BANK LIMITED	Not avl. / Not appl.	Cash Credit	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	18.10	Simple	ACUITE A- \| Stable \| Assigned
H D F C Bank Limited	Not avl. / Not appl.	Letter of Credit	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	20.00	Simple	ACUITE A1 \| Reaffirmed
ICICI BANK LIMITED	Not avl. / Not appl.	Letter of Credit	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	45.00	Simple	ACUITE A1 \| Reaffirmed
State Bank of India	Not avl. / Not appl.	Letter of Credit	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	20.00	Simple	ACUITE A1 \| Reaffirmed
Not Applicable	Not avl. / Not appl.	Proposed Long Term Bank Facility	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	1.73	Simple	ACUITE A- \| Stable \| Reaffirmed
AXIS BANK LIMITED	Not avl. / Not appl.	Term Loan	Not avl. / Not appl.	Not avl. / Not appl.	31 May 2032	39.00	Simple	ACUITE A- \| Stable \| Reaffirmed
State Bank of India	Not avl. / Not appl.	Term Loan	Not avl. / Not appl.	Not avl. / Not appl.	30 Nov 2026	0.33	Simple	ACUITE A- \| Stable \| Reaffirmed
AXIS BANK LIMITED	Not avl. / Not appl.	Term Loan	Not avl. / Not appl.	Not avl. / Not appl.	02 May 2028	2.80	Simple	ACUITE A- \| Stable \| Reaffirmed
AXIS BANK LIMITED	Not avl. / Not appl.	Term Loan	Not avl. / Not appl.	Not avl. / Not appl.	02 May 2030	24.15	Simple	ACUITE A- \| Stable \| Reaffirmed
H D F C Bank Limited	Not avl. / Not appl.	Term Loan	Not avl. / Not appl.	Not avl. / Not appl.	28 Dec 2026	4.81	Simple	ACUITE A- \| Stable \| Reaffirmed
H D F C Bank Limited	Not avl. / Not appl.	Term Loan	Not avl. / Not appl.	Not avl. / Not appl.	30 Oct 2030	23.69	Simple	ACUITE A- \| Stable \| Reaffirmed
Bajaj Finance Ltd.	Not avl. / Not appl.	Term Loan	Not avl. / Not appl.	Not avl. / Not appl.	05 Nov 2026	3.33	Simple	ACUITE A- \| Stable \| Reaffirmed
Bajaj Finance Ltd.	Not avl. / Not appl.	Term Loan	Not avl. / Not appl.	Not avl. / Not appl.	05 Sep 2028	6.88	Simple	ACUITE A- \| Stable \| Reaffirmed
H D F C Bank Limited	Not avl. / Not appl.	Term Loan	Not avl. / Not appl.	Not avl. / Not appl.	25 Jun 2031	96.90	Simple	ACUITE A- \| Stable \| Assigned
Bajaj Finance Ltd.	Not avl. / Not appl.	Working Capital Demand Loan (WCDL)	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	20.00	Simple	ACUITE A- \| Stable \| Reaffirmed
ICICI BANK LIMITED	Not avl. / Not appl.	Working Capital Term Loan	Not avl. / Not appl.	Not avl. / Not appl.	31 May 2028	4.03	Simple	ACUITE A- \| Stable \| Reaffirmed

*Annexure 2 - List of Entities (applicable for Consolidation or Parent / Group / Govt. Support)

Sr. No.	Company Name
1.	Forace Speciality Chem Private Limited
2.	Forace Polymers Private Limited

Contacts

Mohit Jain
Chief Analytical Officer - Rating Operations

Kartik Arora
Senior Analyst - Rating Operations

Contact details exclusively for investors and lenders

Mob: +91 8591310146
Email ID: analyticalsupport@acuite.in

About Acuité Ratings & Research

Acuité is a full-service Credit Rating Agency registered with the Securities & Exchange Board of India (SEBI). The company received RBI Accreditation as an External Credit Assessment Institution (ECAI) for Bank Loan Ratings under BASEL-II norms in the year 2012. Acuité has assigned ratings to various securities, debt instruments and bank facilities of entities spread across the country and across a wide cross section of industries. It has its Registered and Head Office in Kanjurmarg, Mumbai.

Disclaimer: An Acuité rating does not constitute an audit of the rated entity and should not be treated as a recommendation or opinion that is intended to substitute for a financial adviser's or investor's independent assessment of whether to buy, sell or hold any security. Ratings assigned by Acuité are based on the data and information provided by the issuer and obtained from other reliable sources. Although reasonable care has been taken to ensure that the data and information is true, Acuité, in particular, makes no representation or warranty, expressed or implied with respect to the adequacy, accuracy or completeness of the information relied upon. Acuité is not responsible for any errors or omissions and especially states that it has no financial liability whatsoever for any direct, indirect or consequential loss of any kind, arising from the use of its ratings. Ratings assigned by Acuité are subject to a process of surveillance which may lead to a revision in ratings as and when the circumstances so warrant. Please visit our website (www.acuite.in) for the latest information on any instrument rated by Acuité. Please visit https://www.acuite.in/faqs.htm to refer FAQs on Credit Rating.

Note: None of the Directors on the Board of Acuité Ratings & Research Limited are members of any rating committee and therefore do not participate in discussions regarding the rating of any entity.