Press Release December 05, 2024 H M STEELS LIMITED Rating Downgraded,Reaffirmed and Issuer not co-operating

Product	Quantum (Rs. Cr)	Long Term Rating	Short Term Rating
Bank Loan Ratings	59.00	ACUITE C | Downgraded | Issuer not co-operating*	-
Bank Loan Ratings	7.00	-	ACUITE A4 | Reaffirmed | Issuer not co-operating*
Total Outstanding	66.00	-	-
Total Withdrawn	0.00	-	-
* The issuer did not co-operate; based on best available information.

Rating Rationale

­­Acuité has downgraded the long-term rating to ‘ACUITE C’ (read as ACUITE C)  from ‘ACUITE BB-’ (read as ACUITE double B minus) and reaffirmed the short-term rating of ‘ACUITE A4’ (read as ACUITE A four) on the Rs.66.00 Cr. bank facilities of H M Steels Limited (HMSL).  The downgrade is based on non-submission of NDS (No Default Statement) for the last 3 consecutive months, ACUITE has received the last NDS on August 2024. Further, based on CRIF Highmark report, it is observed that there were delays in May 2024 in a GECL loan and in a Medium term loan and account was categorised as SM-0 during that time.

About the Company

­­Incorporated in 1999, H M Steels Limited (HMSL) is promoted by Mr. Megh Raj Garg, Mr. Rajnish Bansal, Mr. Pankaj Bansal and Mr. Ashok Kumar Singla. Based in Sirmour (Himachal Pradesh), the company is engaged in the manufacture of MS Billets, ERW pipes and MS flat.

Unsupported Rating

­Not Applicable

Non-cooperation by the issuer/borrower:

­Acuité has been requesting for No Default Statements (NDS); however, despite multiple requests; the Company’s management has remained non-cooperative and not submitted the NDS for the preceding 03 consecutive months. Acuité believes that information risk is a critical component in such ratings, and noncooperation by the issuer along with unwillingness to provide information could be a sign of potential deterioration in its overall credit quality. This rating is therefore being flagged as “Issuer not-cooperating”, in line with prevailing SEBI regulations and Acuité’s policies.

Limitation regarding information availability:

­­The rating is based on information available from sources other than the issuer/borrower (in the absence of information provided by the issuer/borrower). Acuité endeavored to gather information about the entity/industry from the public domain. Therefore, Acuité cautions lenders and investors regarding the use of such information, on which the indicative credit rating is based.

Rating Sensitivity

­­"No information provided by the issuer / available for Acuite to comment upon."

Liquidity Position

­­"No information provided by the issuer / available for Acuite to comment upon."

Outlook: Not Applicable

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Other Factors affecting Rating

­None

Key Financials

Particulars	Unit	FY 23 (Actual)	FY 22 (Actual)
Operating Income	Rs. Cr.	568.91	560.70
PAT	Rs. Cr.	3.69	6.89
PAT Margin	(%)	0.65	1.23
Total Debt/Tangible Net Worth	Times	0.57	0.62
PBDIT/Interest	Times	2.70	3.15

Status of non-cooperation with previous CRA

­Not Applicable

Any other information

­None

Applicable Criteria

• Manufacturing Entities: https://www.acuite.in/view-rating-criteria-59.htm • Default Recognition: https://www.acuite.in/view-rating-criteria-52.htm • Application Of Financial Ratios And Adjustments: https://www.acuite.in/view-rating-criteria-53.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 12 Mar 2024 Letter of Credit Short Term 5.00 ACUITE A4 (Reaffirmed) Bank Guarantee (BLR) Short Term 2.00 ACUITE A4 (Reaffirmed) Cash Credit Long Term 26.00 ACUITE BB- | Stable (Reaffirmed) Proposed Long Term Bank Facility Long Term 23.00 ACUITE BB- | Stable (Reaffirmed) Covid Emergency Line. Long Term 7.00 ACUITE BB- | Stable (Reaffirmed) Covid Emergency Line. Long Term 3.00 ACUITE BB- | Stable (Reaffirmed) 16 Dec 2022 Letter of Credit Short Term 5.00 ACUITE A4 (Reaffirmed) Bank Guarantee (BLR) Short Term 2.00 ACUITE A4 (Reaffirmed) Cash Credit Long Term 26.00 ACUITE BB- | Stable (Upgraded from ACUITE B-) Proposed Long Term Bank Facility Long Term 23.00 ACUITE BB- | Stable (Upgraded from ACUITE B-) Covid Emergency Line. Long Term 10.00 ACUITE BB- | Stable (Upgraded from ACUITE B-) 12 Sep 2022 Letter of Credit Short Term 2.00 ACUITE A4 (Reaffirmed & Issuer not co-operating*) Cash Credit Long Term 26.00 ACUITE B- (Reaffirmed & Issuer not co-operating*) Working Capital Demand Loan (WCDL) Long Term 27.06 ACUITE B- (Reaffirmed & Issuer not co-operating*) Proposed Long Term Bank Facility Long Term 10.94 ACUITE B- (Reaffirmed & Issuer not co-operating*) 14 Jun 2021 Letter of Credit Short Term 2.00 ACUITE A4 (Reaffirmed & Issuer not co-operating*) Working Capital Demand Loan (WCDL) Long Term 27.06 ACUITE B- (Reaffirmed & Issuer not co-operating*) Proposed Long Term Bank Facility Long Term 10.94 ACUITE B- (Reaffirmed & Issuer not co-operating*) Cash Credit Long Term 26.00 ACUITE B- (Reaffirmed & Issuer not co-operating*) * The issuer did not co-operate; based on best available information.

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Annexure - Details of instruments rated

Lender’s Name ISIN Facilities Date Of Issuance Coupon Rate Maturity Date Quantum (Rs. Cr.) Complexity Level Rating Punjab National Bank Not avl. / Not appl. Bank Guarantee (BLR) Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 2.00 Simple ACUITE A4 | Reaffirmed | Issuer not co-operating* Punjab National Bank Not avl. / Not appl. Cash Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 26.00 Simple ACUITE C | Downgraded | Issuer not co-operating* ( from ACUITE BB- ) Punjab National Bank Not avl. / Not appl. Covid Emergency Line. Not avl. / Not appl. Not avl. / Not appl. 31 Dec 2024 7.00 Simple ACUITE C | Downgraded | Issuer not co-operating* ( from ACUITE BB- ) Punjab National Bank Not avl. / Not appl. Covid Emergency Line. Not avl. / Not appl. Not avl. / Not appl. 31 Oct 2026 3.00 Simple ACUITE C | Downgraded | Issuer not co-operating* ( from ACUITE BB- ) Punjab National Bank Not avl. / Not appl. Letter of Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 5.00 Simple ACUITE A4 | Reaffirmed | Issuer not co-operating* Not Applicable Not avl. / Not appl. Proposed Long Term Bank Facility Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 23.00 Simple ACUITE C | Downgraded | Issuer not co-operating* ( from ACUITE BB- )

* The issuer did not co-operate; based on best available information.

Contacts

Mohit Jain Senior Vice President - Rating Operations Abhishek Singh 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.