­P D Industries Private Limited (PDIPL) was incorporated in 1992 by Agarwal family and taken over by the promoters of LN Group in 2015. The company is engaged in manufacturing of sponge iron and MS billet with an installed capacity of 60,000 MTPA and 50,400 MTPA respectively. In addition to that, the company also has its own 5 MW power plant installed. The manufacturing facility located in Raipur, Chhattisgarh.

­L N Metallics Limited (LNML) was incorporated in 2003 by Mr. Ramesh Agarwal & Mr. Girdharilal Agarwal. The company is engaged in manufacturing of sponge iron with an installed capacity of 60,000 MTPA. The company has its manufacturing facility located in Jharsugda, Orissa.

• Scaling up of operation while improving their profitability margin
• Sustenance of existing conservative capital structure

The group has adequate liquidity position marked by comfortable net cash accruals of Rs.13.76 crore as against Rs.11.72 term debt obligations in FY2022. The cash accruals of the group are estimated to remain in the range of around Rs. 16.23 crore to Rs. 18.74 crore during 2023-24 as against Rs.2.80 crore long term debt obligations during FY2023. The current ratio of the group stood strong at 2.52 times in FY2022. The bank limit of the group has been ~16 percent utilized during the last six months ending in March 2023.The Gross Current Asset (GCA) days of the group stood moderate at 97 days in FY2022. Acuité believes that the liquidity of the group is likely to remain adequate over the medium term on account of healthy cash accruals against the long debt repayments over the medium term.

Acuité believes that the group will continue to benefit over the medium term from the promoter's vast experience and from its established relationship with its key suppliers. The outlook may be revised to ‘Positive’ if group achieves more than anticipated sales and profitability while maintaining its financial risk profiles. Conversely, the outlook may be revised to ‘Negative’ if the group fails to achieve growth in revenue and its financial risk profile deteriorates owing to higher-than-expected increase in debt-funded working capital requirements.

­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.