Acuité has consolidated the business and financial risk profiles of N.R. Sponge Private Limited (NRSPL), G R Sponge and Power Limited (GRSPL), Chaman Metallics Limited (CML), G R Krishna Ferro Alloys Private Limited (GRKFAPL) [erstwhile Prithvi Ferro Alloys Private Limited], and G R Integrated Steel Private Limited (GRISPL), together referred to as the ‘G R Group’ (group) as against standalone view with support taken from GRSPL and NRSPL previously.  The consolidation is in the view of common management, strong operational and financial linkages between the entities and similar line of business activities.

Experienced management
G R group has a long established presence of over two decades in the iron and steel industry. The group is promoted by Mr. Rameshkumar Ganpatrai Agrawal who has an industry experience of over two decades and is ably supported by the second-generation promoters, Mr. Keshav Agarwal and Mr. Chetan Agrawal. Acuité believes that the long track record of operations and the vast experience of the promoters will continue to support the growth plans of the group, going forward.

Semi-integrated business operations of the group
The group operates a semi-integrated steel manufacturing setup that covers the entire value chain, from raw material processing to the production of semi-finished steel products. This structure enhances operational efficiency, cost control, and supply chain consistency. As of August 2025, the group has an aggregate installed capacity of 325,500 metric tonnes (MT) of sponge iron, 84,204 MT of ferro alloys, 48,000 MT of mild steel ingots, and 198,000 MT of billets. These operations are supported by a 66 MW captive power plant. With the commencement of operations at G R Integrated Steel Private Limited (GRISPL), the group has further strengthened its backward integration. GRISPL’s iron ore pellet and beneficiation facilities supply ~40% of their output as captive raw material to GRSPL and NRSPL, while the remaining 60% is sold to externally. Further, the plant location of CML is strategically located close a reputed metal supply player which shall ease the raw material procurement of the company.

Improved operating performance supported by capacity expansions & backward integrations
While the capacity utilisation and sales realisations of most of the group companies moderated in FY25 owing to power unavailability and declining realisations, the revenue marginally increased to Rs. 903.03 Cr. in FY2025 (Prov.) from Rs. 874.41 Cr. in FY2024 owing to the materialisation of capex at GRISPL w.e.f November 2024. Further, the improvement in EBITDA margin from 7.35% in FY2024 to 11.07% in FY2025 (Prov.) is also due to the backward integration support provided by GRISPL to the existing group companies (especially GRSPL & NRSPL).  Therefore, improvement in production & sales volumes coupled with realisation growth shall be a key rating monitorable. The PAT margin also stood improved to 5.56% in FY2025(Prov.) from 2.40% in FY2024. For Q1FY2026, the revenue of the group stood at ~Rs. 375 Cr.

­Moderate financial risk profile owing to significant debt funded capex
The financial risk profile of the group is marked moderate driven by healthy net worth, comfortable gearing and moderate debt protection metrics. The tangible net worth of the group increased to Rs. 618.77 Cr. as on March 31, 2025(Prov.), (from Rs. 439.59 Cr. on March 31, 2024) due to accretion of profits to reserves. The networth also includes 8% non-cumulative optionally convertible preference share Rs. 72.41 Cr. and subordinated unsecured loans of Rs. 165.62 Cr. However, the total debt of the group increased to Rs. 663.73 Cr. as of March 31, 2025 (Prov.) as against Rs.424.55 Cr. as of March 31, 2024. The increase in debt is primarily due to the capex undertaken at CML & GRISPL including their cost overruns. Therefore, the gearing of the company stood at 1.07 times as on March 31, 2025 (Prov.) (0.97 times as on March 31, 2024). Further, the debt protection metrics of the company also stood moderate marked by Interest coverage ratio (ICR) of 6.06 times in FY2025 (Prov.) (3.73 times in FY2024) and debt service coverage ratio (DSCR) stood at 2.19 times in FY2025(Prov.) (1.23 times in FY2024).
Acuité believes that the financial risk profile of the company will remain moderate driven by elevated debt levels and significant interest obligations to be serviced post capex completions over the medium term.

Working capital intensive nature of operations
The working capital management of the group is intensive in nature marked by gross current assets (GCA) of 201 days as of March 31,2025 (Prov.) (133 days as of March 31, 2024). The GCA days are mainly driven by high inventory days which stood at 125 days as on March 31, 2025 (Prov.) (76 days as on March 31,2024) due to the commencement of operations at CML and procurement of bulk raw materials in order to mitigate fluctuation in raw material prices. The debtor days stood low at 10 days in FY2025(Prov.) (18 days in FY2024). Therefore, the company’s reliance on bank limits remains moderate with average utilisation of fund-based limits at ~84.28% for the last six months ended June 25 and for non-fund-based limit utilisation at ~9.60% during the same period.
Acuité believes that the working capital operations of the company will remain at similar levels given the nature of the industry over the medium term.

Intense competition and inherent cyclical nature of the steel industry
The downstream steel industry remains heavily fragmented and unorganised. Therefore, the group is exposed to intense competitive pressures from large number of organised and unorganised players along with its exposure to inherent cyclical nature of the steel industry. Additionally, prices of raw materials and products are highly volatile in nature causing an adverse impact on the profitability of the group.