Press Release November 14, 2024 ISPAT DAMODAR PRIVATE LIMITED Rating Downgraded

Product	Quantum (Rs. Cr)	Long Term Rating	Short Term Rating
Bank Loan Ratings	9.50	ACUITE C | Downgraded	-
Total Outstanding	9.50	-	-
Total Withdrawn	0.00	-	-

Rating Rationale

­­Acuité has downgraded its long-term rating to ‘ACUITE C’ (read as ACUITE C) from ‘ACUITE BB’ (read as ACUITE double B) on the Rs.9.50 Cr. bank facilities of Ispat Damodar Private Limited (IDPL). Rationale for Downgrade Acuite has observed  that the CRIF Highmark report indicates SMA-2 in August 2024 for Cash Credit account. It has also observed that bank has charged penal interest dated Aug 31, 2024 in the account. Based on such reporting, Acuite has downgrade the rating to recognise the default/ delay of August 2024.

About the Company

­­Incorporated in 1996, Ispat Damodar Private Limited (IDPL) was promoted by Mr. Satpal Bansal and located at Purulia, West Bengal. Currently, IDPL is headed by Mr. Sumita Majee and Mr. Arup Majee. Majee family has taken it in 2019 but shareholding largely remains with Mr. Bansal. The company is engaged in the manufacturing of sponge iron, MS billet and ferro alloys with an installed capacity of 60000 MTPA each. The company also has an 18 MW captive waste heat based power plant.

Unsupported Rating

­Not Applicable

Analytical Approach

­­Acuité has taken a standalone view of the business and financial risk profiles of IDPL to arrive at the rating.

Key Rating Drivers

Strengths

­­Long track record of operations and experienced management IDPL’s key promoter, Mr. Vikas Bansal has an experience spanning over a decade in the ferro alloy, billet and sponge iron industry and understanding of the local market dynamics. The company has also established relationships with reputed players like Oswal Minerals Ltd, Odisha Mining Corporation Limited, Carbon Resources Pvt. Ltd. only to name a few. Acuité believes the long track record, experienced management and healthy relations with suppliers and customers will continue to support the business, going forward.

Weaknesses

­Decline in sales in FY2023 and going forward expected to be subdued The Company’s revenues have declined in FY2023 at Rs. 576.67 Cr. against Rs. 619.98 Cr. in FY2022 due to increasing cost of raw materials leading to lesser sales for the Company as they were not able to pass on the costs. The revenues of the Company were at Rs. 303. 67 Cr. as of December 2023 (Provisional) basis. 2-3 month shut down in billet in FY2023 and FY2024.  Intense competition and inherent cyclical nature of the steel industry The downstream steel industry remains heavily fragmented and unorganised. The company 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. Delays in servicing term debt obligations  The team has recently found OD penal charges in the bank statement dated 31/08/2024, and the CRIF Highmark report shows a delay in the Cash Credit account and is mentioned as SMA-2 in August 2024. Although the account conduct is satisfactory till date.

Rating Sensitivities

­­­Timely servicing of term debt obligations

Liquidity Position

Poor

­The team has recently found OD penal charges in the bank statement dated 31/08/2024, and the CRIF Highmark report shows a delay in the Cash Credit account and is mentioned as SMA-2 in August 2024. Although the account conduct is satisfactory till date.

Outlook: Not Applicable

­

Other Factors affecting Rating

­None

Key Financials

Particulars	Unit	FY 23 (Actual)	FY 22 (Actual)
Operating Income	Rs. Cr.	576.67	619.98
PAT	Rs. Cr.	7.65	5.04
PAT Margin	(%)	1.33	0.81
Total Debt/Tangible Net Worth	Times	0.47	0.55
PBDIT/Interest	Times	8.96	5.09

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

­Not Applicable

Any other information

­None

Applicable Criteria

• Default Recognition :- https://www.acuite.in/view-rating-criteria-52.htm • Rating Process and Timeline: https://www.acuite.in/view-rating-criteria-67.htm • Manufacturing Entities: https://www.acuite.in/view-rating-criteria-59.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 05 Apr 2024 Bank Guarantee (BLR) Short Term 6.04 ACUITE A4+ (Reaffirmed & Withdrawn) Bank Guarantee (BLR) Short Term 11.53 ACUITE A4+ (Reaffirmed & Withdrawn) Letter of Credit Short Term 1.26 ACUITE A4+ (Reaffirmed & Withdrawn) Cash Credit Long Term 14.70 ACUITE BB (Downgraded & Withdrawn from ACUITE BB+ | Stable) Cash Credit Long Term 32.33 ACUITE BB (Downgraded & Withdrawn from ACUITE BB+ | Stable) Cash Credit Long Term 1.00 ACUITE BB | Stable (Downgraded from ACUITE BB+ | Stable) Cash Credit Long Term 8.50 ACUITE BB | Stable (Downgraded from ACUITE BB+ | Stable) Proposed Long Term Bank Facility Long Term 15.64 ACUITE Not Applicable (Withdrawn) Proposed Bank Guarantee Short Term 20.00 ACUITE Not Applicable (Withdrawn) 06 Jan 2023 Bank Guarantee (BLR) Short Term 11.53 ACUITE A4+ (Downgraded from ACUITE A3) Letter of Credit Short Term 1.26 ACUITE A4+ (Downgraded from ACUITE A3) Proposed Bank Guarantee Short Term 20.00 ACUITE A4+ (Downgraded from ACUITE A3) Bank Guarantee (BLR) Short Term 6.04 ACUITE A4+ (Downgraded from ACUITE A3) Cash Credit Long Term 23.20 ACUITE BB+ | Stable (Downgraded from ACUITE BBB- | Stable) Proposed Long Term Bank Facility Long Term 15.64 ACUITE BB+ | Stable (Downgraded from ACUITE BBB- | Stable) Cash Credit Long Term 33.33 ACUITE BB+ | Stable (Downgraded from ACUITE BBB- | Stable) 18 Oct 2021 Bank Guarantee (BLR) Short Term 6.04 ACUITE A3 (Upgraded from ACUITE A4+) Proposed Bank Guarantee Short Term 20.00 ACUITE A3 (Upgraded from ACUITE A4+) Letter of Credit Short Term 1.26 ACUITE A3 (Upgraded from ACUITE A4+) Bank Guarantee (BLR) Short Term 11.53 ACUITE A3 (Upgraded from ACUITE A4+) Cash Credit Long Term 33.33 ACUITE BBB- | Stable (Upgraded from ACUITE BB+) Proposed Long Term Bank Facility Long Term 15.64 ACUITE BBB- | Stable (Upgraded from ACUITE BB+) Cash Credit Long Term 23.20 ACUITE BBB- | Stable (Upgraded from ACUITE BB+)

­

Annexure - Details of instruments rated

Lender’s Name ISIN Facilities Date Of Issuance Coupon Rate Maturity Date Quantum (Rs. Cr.) Complexity Level Rating Indian Bank Not avl. / Not appl. Cash Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 8.50 Simple ACUITE C | Downgraded ( from ACUITE BB ) State Bank of India Not avl. / Not appl. Cash Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 1.00 Simple ACUITE C | Downgraded ( from ACUITE BB )

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.