Press Release February 10, 2025 N R ISPAT AND POWER PRIVATE LIMITED Rating Upgraded

Product	Quantum (Rs. Cr)	Long Term Rating	Short Term Rating
Bank Loan Ratings	372.50	ACUITE A | Stable | Upgraded	-
Bank Loan Ratings	2.50	-	ACUITE A1 | Upgraded
Total Outstanding	375.00	-	-
Total Withdrawn	0.00	-	-

Rating Rationale

­Acuité has upgraded long-term rating to ‘ACUITE A’ (read as ACUITE A) from ‘ACUITE A-’ (read as ACUITE A minus) and short term rating to ‘ACUITE A1’ (read as ACUITE A one) from ‘ACUITE A2+’ (read as ACUITE A two plus) on the Rs. 375.00 Cr. bank facilities of N R Ispat and Power Private Limited (N R Ispat). The outlook is ‘Stable’. Rationale for Upgrade The rating upgrade takes into account the sound business risk profile of the group majorly driven by improvement in revenue and profitability. The consolidated revenue from operations of the group increased to Rs.1545.87 Cr. in FY2024 as against Rs.1506.36 Cr. in FY2023. Furthermore, the operating margin of the group increased to 14.87 per cent in FY2024 as compared to 11.39 per cent in FY2023. Likewise, the profitability margin stood at 8.46 per cent in FY2023 as against 5.97 per cent in FY2023. The improvement in margins is attributed to enhanced operational efficiencies on account of backward integration, improved procurement efficiencies and cost rationalization. In addition, the financial risk profile of the group is healthy marked by a healthy net worth, moderate gearing levels and comfortable debt protection metrics and working capital management is efficient marked by Gross Current Assets days (GCA days) of 82 days for FY2024. The rating also draws comfort from established track record and skilled promoters with location advantage along with integrated nature of operations. However, these strengths are partially offset by cyclical nature of the steel industry and the vulnerability of the margins to the volatility in steel prices.

About the Company

N R Ispat and Power Private Limited (N R Ispat), the flagship company of the group was incorporated in 2008 in Chhattisgarh and is engaged in the manufacturing of sponge iron, billet and TMT bars. The company sells TMT under the brand name ‘Dollar Gold’. The present directors of the company are Mr. Sanjay Agrawal, Mr. Rajesh Kumar Agrawal, Mr. Shubham Agrawal and Mr. Mohit Kumar Mishra.

About the Group

N R TMT India Private Limited N R TMT India Private Limited (N R TMT) was incorporated in 2008 in Chhattisgarh. The company is engaged in the manufacturing of billet and TMT bars. The present directors of the company are Mr. Vijay Kumar Agrawal, Mr. Ankit Agrawal and Mr. Vikas Agrawal. NRVS Steels Limited (Erstwhile Seleno Steels Limited) NRVS Steels Limited (erstwhile Seleno Steels Limited) (NRVS) was acquired by the NR group in FY 2018 and the name was changed to its present name. It was incorporated in 2001 in Chhattisgarh and is engaged in the manufacturing of sponge iron, billet and TMT Bars. The present directors of the company are Ms. Anju Agrawal, Mr. Chandan Poddar, Mr. Vijay Kumar Agrawal, Mr. Mayank Agrawal, Mr. Ankit Agrawal, Mr. Sunil Kumar Jindal and Mr. Pawan Kumar Agrawal. NR Steel and Ferro Private Limited NR Steel and Ferro Private Limited (NRSF) was incorporated in August 2020 in Chhattisgarh. The company has undertaken a Greenfield project to set up a manufacturing unit that will produce pig iron and billet. The present directors of the company are Mr. Ravi Kumar Gupta, Mr. Sanjay Agrawal and Mr. Shubham Agrawal. The company is engaged in the manufacturing of billets, Silico Manganese and Pig Iron.

Unsupported Rating

­Not Applicable

Analytical Approach

Extent of Consolidation

•Full Consolidation

Rationale for Consolidation or Parent / Group / Govt. Support

­Acuite has considered the consolidated financials of N R Ispat and Power Private Limited, N R TMT India Private Limited, NRVS Steels Limited and NR Steel and Ferro Private Limited. The consolidation is in the view of common management, Intergroup purchase and sale, strong operational linkages between the entities and a similar line of business.

Key Rating Drivers

Strengths

Established track record of operations along with integrated nature of operations The promoters of the group have been associated with the iron & steel industry for about two decades. The group has integrated operations with capacities to produce sponge iron, steel billets and long products across three companies – N R Ispat, N R TMT, NRVS and NRSF. Acuité derives comfort from the long experience of the promoters. In addition to this, the group has a locational advantage as the plants are located in the industrial area of Raipur, Chhattisgarh, which is in close proximity to various steel plants and sources of raw materials. Further the plants are well connected through road and rail transport which facilitates easy transportation of raw materials and finished goods. Strong Business Risk Profile The business risk profile of the group is strong supported by the integrated nature of operations of the group which enhances the operating efficiencies and mitigates the risks arising from the cyclical nature of steel industry to some extent. The diversity in revenue streams of the group also augurs well with its business risk profile. The revenue of the group has improved to Rs.1545.87 Cr. in FY2024 as compared to revenues of Rs.1506.36 Cr. in FY2023. The operating margin of the group increased to 14.87 per cent in FY2024 as compared to 11.39 per cent in FY2023. Likewise, the profitability margin stood at 8.46 per cent in FY2023 as against 5.97 per cent in FY2023. The improvement in margins is attributed to enhanced operational efficiencies on account of backward integration, improved procurement efficiencies and cost rationalization. Further, the integrated operations have helped the group to maintain a comfortable operating and profit margins. The group has registered a revenue of Rs.1635.87 Cr. till 31st December, 2024. Acuite expects the scale of operations of the group will improve in near to medium term backed by enhanced production capacity of the group. Healthy financial risk profile The group’s financial risk profile is marked by healthy networth, moderate gearing and comfortable debt protection metrics. The tangible net worth of the group increased to Rs.493.73 Cr. as on March 31, 2024 from Rs.333.54 Cr. as on March 31, 2023 due to accretion of profits into reserves. The capital structure of the group is marked by gearing which stood moderate at 1.54 times as on March 31, 2024 as against 1.25 times as on March 31, 2023. The debt protection metrics remained comfortable marked by interest coverage ratio (ICR) of 8.23 times and debt service coverage ratio (DSCR) of 2.92 times for FY2024. Further, the net cash accruals to total debt (NCA/TD) stood at 0.23 times in FY2024 as against 0.31 times in FY2023 and Total Outside Liabilities/Tangible Net Worth (TOL/TNW) stood at 1.72 times as on March 31, 2024 as against 1.53 times as on March 31, 2023. Acuité expects that going forward the financial risk profile of the group will remain healthy over the medium term, despite having debt funded capex plans. Efficient working capital management The working capital management of the group is efficient marked by Gross Current Assets (GCA) of 82 days for FY2024 as compared to 73 days for FY2023. The efficient level of GCA days are mainly on account of inventory days and minimal receivables. The inventory days of the group stood at 45 days in FY2024 as compared to 38 days in FY2023. Further, the debtor days of the group stood at 8 days for FY2024 as against 13 days for FY2023. Against this, the group has minimal creditors, which stood at 9 days as on March 31, 2024.  The group relies on its bank lines to meet its working capital requirement which stood utilised at 82.79% over last ten months ended September 2024. Acuité believes that the working capital operations of the group will remain at the similar levels over the medium term.

Weaknesses

­Cyclical nature of the steel industry to the volatility in steel prices The steel rolling sector continues to lack organization and cohesion. The group faces strong competitive forces from both organized and unorganized participants, compounded by the cyclicality inherent in the steel industry. Moreover, the government’s emphasis on steel intensive sectors like railways and infrastructure increases vulnerability, any prolonged drop in demand would negatively affect steel group’s performance. Furthermore, the fluctuation in prices of raw materials and goods is considerably unstable, making this a crucial aspect to watch.

ESG Factors Relevant for Rating

­The iron and steel production industry has a substantial environmental impact. The processes are power-intensive so as part of ongoing commitment to environmental sustainability, NR Group undertook tree plantation initiative and planted 5000 trees which endeavour aids in combating deforestation and mitigating the impacts of climate change. The group has also taken a significant step towards shifting to renewable energy wherein they have collaborated with local partners to set up a state-of-the-art solar power generation plant. From the governance perspective, factors such as ethical business practices, management compensation and board functioning hold primary importance to the group. Likewise, regulatory compliance, shareholder’s rights and audit control are other material issues. NR Group is dedicated to making a positive impact on society. Workforce health & safety management, inclusive development and human rights concerns are of primary importance, given the nature of operations. The prime example is the establishment and management of a social work hospital along with initiation of the NR Public School aiming to provide accessible education to the children of their workers and the local community.

Rating Sensitivities

­Growth in the scale of operations while improving profitability margins Timely completion of ongoing capital expenditure

Liquidity Position

Adequate

The group has adequate liquidity marked by net cash accruals of Rs.171.55 Cr. as on March 31, 2024 as against Rs.39.45 Cr. of debt obligations over the same period. Going forward, the group is expected to generate net cash accruals under the range of Rs.180.00 Cr. to Rs.240.00 Cr. against debt obligations of upto Rs.105.87 Cr. over the same period. The current ratio of the group stood comfortable at 1.12 times in FY2024. The cash and bank balance stood at Rs.0.91 Cr. for FY2024. Acuité believes that the liquidity of the group is likely to remain adequate over the medium term on account of comfortable cash accruals against long debt repayments over the medium term.

Outlook: Stable

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Other Factors affecting Rating

­None

Key Financials

Particulars	Unit	FY 24 (Actual)	FY 23 (Actual)
Operating Income	Rs. Cr.	1545.87	1506.36
PAT	Rs. Cr.	130.76	89.86
PAT Margin	(%)	8.46	5.97
Total Debt/Tangible Net Worth	Times	1.54	1.25
PBDIT/Interest	Times	8.23	6.77

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 01 Dec 2023 Term Loan Long Term 4.42 ACUITE A- | Stable (Reaffirmed) Term Loan Long Term 1.16 ACUITE A- | Stable (Reaffirmed) Cash Credit Long Term 26.90 ACUITE A- | Stable (Reaffirmed) Proposed Long Term Loan Long Term 15.02 ACUITE A- | Stable (Reaffirmed) Term Loan Long Term 135.00 ACUITE A- | Stable (Assigned) Term Loan Long Term 80.00 ACUITE A- | Stable (Assigned) Term Loan Long Term 60.00 ACUITE A- | Stable (Assigned) Term Loan Long Term 50.00 ACUITE A- | Stable (Assigned) Bank Guarantee (BLR) Short Term 2.50 ACUITE A2+ (Reaffirmed) 26 Sep 2022 Term Loan Long Term 5.90 ACUITE A- | Stable (Reaffirmed) Term Loan Long Term 2.07 ACUITE A- | Stable (Reaffirmed) Term Loan Long Term 2.08 ACUITE A- | Stable (Reaffirmed) Cash Credit Long Term 16.90 ACUITE A- | Stable (Reaffirmed) Cash Credit Long Term 10.00 ACUITE A- | Stable (Reaffirmed) Term Loan Long Term 2.85 ACUITE A- | Stable (Reaffirmed) Proposed Long Term Loan Long Term 10.20 ACUITE A- | Stable (Reaffirmed)

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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. 2.50 Simple ACUITE A1 | Upgraded ( from ACUITE A2+ ) Punjab National Bank Not avl. / Not appl. Cash Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 26.90 Simple ACUITE A | Stable | Upgraded ( from ACUITE A- ) Not Applicable Not avl. / Not appl. Proposed Long Term Loan Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 17.96 Simple ACUITE A | Stable | Upgraded ( from ACUITE A- ) Punjab National Bank Not avl. / Not appl. Term Loan 15 Oct 2022 Not avl. / Not appl. 31 Mar 2035 135.00 Simple ACUITE A | Stable | Upgraded ( from ACUITE A- ) State Bank of India Not avl. / Not appl. Term Loan 14 Jun 2023 Not avl. / Not appl. 31 Mar 2035 80.00 Simple ACUITE A | Stable | Upgraded ( from ACUITE A- ) Bank of Baroda Not avl. / Not appl. Term Loan 15 Mar 2023 Not avl. / Not appl. 31 Mar 2035 60.00 Simple ACUITE A | Stable | Upgraded ( from ACUITE A- ) UCO Bank Not avl. / Not appl. Term Loan 21 Mar 2023 Not avl. / Not appl. 31 Mar 2035 50.00 Simple ACUITE A | Stable | Upgraded ( from ACUITE A- ) Punjab National Bank Not avl. / Not appl. Term Loan 12 Nov 2021 Not avl. / Not appl. 30 Sep 2026 2.64 Simple ACUITE A | Stable | Upgraded ( from ACUITE A- )

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

Sr. No.  Company name 1 N R Ispat and Power Private Limited 2 NR Steel and Ferro Private Limited 3 NRVS Steels Limited (Erstwhile Seleno Steels Limited) 4 ­N R TMT India Private Limited

Contacts

Mohit Jain Senior Vice President - Rating Operations Archita Sharma Associate 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.