Press Release April 22, 2025 SPINTECH TUBES PRIVATE LIMITED Rating Assigned and Upgraded

Product	Quantum (Rs. Cr)	Long Term Rating	Short Term Rating
Bank Loan Ratings	218.50	ACUITE A+ | Stable | Assigned	-
Bank Loan Ratings	772.50	ACUITE A+ | Stable | Upgraded	-
Bank Loan Ratings	67.50	-	ACUITE A1 | Assigned
Bank Loan Ratings	12.50	-	ACUITE A1 | Upgraded
Total Outstanding	1071.00	-	-
Total Withdrawn	0.00	-	-

Rating Rationale

Acuité has upgraded its long-term rating to ‘ACUITE A+’ (read as ACUITE A plus) from ‘ACUITE BBB+’ (read as ACUITE triple B plus) and short-term rating to ‘ACUITE A1’ (read as ACUITE A one) from 'ACUITE A2+’ (read as ACUITE A two plus) to the Rs. 785.00 Cr. bank facilities of Spintech Tubes Private Limited (STPL). The outlook is ‘Stable’. Acuité has assigned the long-term rating of ‘‘ACUITE A+’ (read as ACUITE A plus) and short-term rating of ‘ACUITE A1’ (read as ACUITE A one) to the Rs. 286.00 Cr. bank facilities of Spintech Tubes Private Limited (STPL). The outlook is ‘Stable’. Rationale for the rating upgrade The rating considered consolidated financial and business risk profile of Gagan group and the differential rating was given to STPL was on account of significant capital expenditure plans in STPL. The upgrade and equating the rating with its group companies is on account of timely commercialisation of pellet plant and rolling mill in January 2024 wherein the company has re hgistered higher than expected revenue growth, with reported earnings of Rs. 691.37 crore in 9MFY25, compared to Rs. 90.03 crore in 3MFY24. The rating of the group derives its strength from steady business risk profile of the group as reflected in its growing revenue trend in FY26 coupled with management’s long track record in the sector and healthy financial profile characterized by comfortable gearing and strong debt protection metrics. The rating also draws comfort from the strong liquidity position of the group, aided by efficient working capital management, comfortable current ratio and cushion available in the group’s working capital limits. Also, rating is partially offset by the cyclical nature of the steel industry and the vulnerability of the margins to the volatility in commodity prices.

About the Company

Spintech Tubes Private Limited (STPL) was incorporated by the Gagan group in February 2017 for setting up an integrated manufacturing unit at Jamuria, West Bengal. STPL currently has installed pellet plant (6,00,000 MTPA) and Rolling mill (26,400 MPTA) which has commenced operations in January 2024. The company is undergoing capex to install a sponge iron plant (300,000 MTPA), a SMS (Steel Melt Shops) (180,000 MTPA), a Rolling mill (1,53,600 MTPA) and captive power plant of 40MW with a total project cost of ~Rs.686 Cr. out of which ~ 83 per cent of cost has been  incurred till February 2025. The expected COD of the projects is July 2025. Also, the company has planned to install 5 Tube Mill lines with 24,000 MTPA capacity with total project cost of Rs.134.96 Cr. The expected COD for this new plant is October 2025. Mr. Madan Singh, Mr. Vinay Kumar Agarwal, Mr. Raunak Kumar, Mr. Sandeep Agarwal, Mr. Maloy Kumar Chandra are directors of the company.

About the Group

The group consists of 3 more entities namely Gagan Ferrotech Limited (GFL), Gajanan Iron Private Limited (GIPL) and Shakambhari Overseas Trades Private Limited (SOTPL). GFL is the flagship entity of the Gagan Group. GFL is promoted by Mr. Vinay Kumar Agarwal and family. The company was initially engaged in trading of coal. Since 2006, it ventured into the manufacturing of sponge iron and thereafter through forward integration had set up its billets and rolling mill units. GFL is currently engaged in the manufacturing of sponge iron, billets and TMT bars. The manufacturing unit is located at Jamuria. Currently, Gagan Ferrotech Ltd. has integrated steel manufacturing facilities for sponge iron (capacity- 2,64,000 MTPA), Billet (capacity – 3,53,400 MTPA), TMT bars and wires (capacity – 3,36,000 MTPA). In addition, the company also has a captive power plant of 20 MW. The company has undertaken a capex to install Waste Heat Recovery Boiler (WHRB) of 16 MW with the total cost of Rs. 35.00 Cr. fully funded by promoter’s contribution and the expected COD for the same in June 2025. GIPL was incorporated in 2005, Kolkata, West Bengal based and is engaged in the business of manufacturing MS Angles (96,000 MTPA) and M.S billets (1,38,500 MTPA). Mr. Niranjan Gourisaria, Mr. Kailash Kumar Megotia, Mr. Vinay Kumar Agarwal are directors of the entity. SOTPL was incorporated in 1996, Kolkata, West Bengal based and is engaged in manufacturing of cast iron (24,820 MTPA). Mr. Umang Agarwal, Mr. Vinay Kumar Agarwal, Mr. Suman Agarwal are directors of the entity.

Unsupported Rating

­Not Applicable

Analytical Approach

Extent of Consolidation

•Full Consolidation

Rationale for Consolidation or Parent / Group / Govt. Support

Acuité has consolidated the business and financial risk profiles of Gagan Ferrotech Limited (GFL), Gajanan Iron Private Limited (GIPL), Shakambhari Overseas Trades Private Limited (SOTPL) and Spintech Tubes Private Limited (STPL) together referred to as the ‘Gagan Group’ (GG). The consolidation is in the view of common promoters and management, intercompany holdings, operational linkages between the entities and a similar line of business.

Key Rating Drivers

Strengths

Long track record of operations and integrated operations Promoters are associated with the steel industry for over two decades and have established forward as well as backward integrated operations. Group has a diversified product mix which includes pellets, sponge iron, billets, TMT bars and cast iron. Acuité believes that the long operational track record of Gagan group and promoters’ extensive understanding and expertise will support the group’s growth plans going forward. Moreover, the group has a locational advantage as the plants are located in the industrial area of Durgapur, West Bengal, 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. Steady scale of operations albeit improving profitability margins   Gagan Group’s revenue stood at Rs. 1980.97 Cr. in FY24 as against Rs. 2173.20 Cr. in FY23 the marginal decline was on account of reduced sales realization for steel products. However, the group reported improvement in scale of operations marked by revenue of Rs. 1831.37 Cr. in 9MFY25 due to buoyant demand, increased contribution from the recently enhanced capacities and better product diversity. Further, the profitability of the group improved in FY24 as reflected in the EBITDA margins which stood at 8.05 per cent in FY24 as against 5.47 per cent in FY23 due to decline in raw material cost (coking and thermal coal, refractories and ferroalloys), also the group has reported EBITDA margin of 9.88 percent in 9MFY25. The PAT margins also increased and stood at 3.74 per cent in FY24 as compared to 2.37 per cent in FY23. Upon completing the ongoing capex, primarily in STPL, by the second quarter of FY26, the group will transition into a fully integrated steel plant. With the addition of power plants, power costs is expected to decline, while the scale of operations and operating margins will improve significantly. A substantial growth is expected in FY26 due to the full impact of the completed capital expenditure. Healthy Financial Risk Profile The financial risk profile of the group remained healthy marked by healthy net worth, low gearing and comfortable debt protection metrics. The tangible net worth of the group increased stood Rs. 1211.67 Cr. in FY24 as against Rs. 974.81 Cr. in FY23 due to increase in equity and accretion of profits to reserves. Acuite has considered unsecured loans to the tune of Rs. 112.20 Cr. as on March 31, 2024 as part of net worth as these loans are subordinated to bank debt. The gearing ratio of the group stood at 0.54 times in FY24 as compared to 0.35 times in FY23. The debt outstanding of the group in FY24 comprises of long-term debt of Rs. 359.07 Cr., Rs. 6.50 Cr. of non-interest-bearing unsecured loans and Rs. 291.41 Cr. of short-term debt. The TOL/TNW stood at Rs. 0.75 times in FY24 as against 0.56 times in FY23. The debt protection metrics remained healthy with debt service coverage ratio of 4.14 times and interest service coverage ratio stood at 5.83 times in FY24. Acuite believes, notwithstanding the benefits accrued from the capacity additions, the debt funded capex plan likely to moderatethe financial risk profile to an extent however expected to remain comfortable over  to medium to long term. Efficient working capital operations   The GCA days of the group have moderated albeit efficient in nature marked by 161 days in FY24 as against 112 days in FY23. GCA days have increased in FY24 majorly on the account of increased in other current assets. The inventory days of the group increased to 87 days in FY24 as against 54 days in FY23. Generally, the group maintains 2-2.5 months of inventory of iron ore and coal to mitigate the price volatility for which significant advances are paid to the suppliers. The Creditor days of the group stood at 12 days in FY24 as against 6 days in FY23. The company receives 25-30 days credit period from the suppliers. The average bank limit utilisation of the group stood at 56.78 per cent for fund-based facilities and 72.14 per cent for non-fund facilities for six months ended February 2024. Acuité believes that the working capital operations of the group will remain efficient over the medium term.

Weaknesses

Vulnerability of the margins to the volatility in commodity prices in a cyclical nature of the industry The group’s performance remains vulnerable to cyclicality in the steel sector as demand for steel depends on performance of end user segments such as construction and real estate. Indian steel sector is highly competitive due to presence of large number of players. The operating margin of the group is exposed to fluctuations in the prices of raw materials (coal and iron ore) as well as realization from finished goods.

ESG Factors Relevant for Rating

­The group is committed to pursuing innovative technologies that drive sustainable and comprehensive development for all, including both its members and surrounding communities. The company actively engages in environmental stewardship through responsible resource utilization and initiatives aimed at reducing waste and greenhouse gas emissions. Through proactive corporate social responsibility programs in education, healthcare, and community welfare, the  Group further reinforces its reputation as a responsible corporate citizen. Some of the CSR initiatives includes plantation programme, health and eye check up programmes, clothes distribution programme etc.

Rating Sensitivities

Sustain growth in revenues and profitability margins Elongation of working capital cycle Timely completion and commercialisation of the ongoing capex Changes in Financial risk profile owing to higher-than expected debt funded capex

Liquidity Position

Strong

The liquidity position of the group remained strong on account of adequate net cash accruals against its repayment obligations. The net cash accruals of the company stood at Rs. 118.87 Cr. in FY24 as against Rs. 6.68 Cr. of repayment obligations in FY24. Furthermore, the average bank limit utilisation by the group stood at 56.78 per cent for fund-based facilities and 72.14 per cent for non-fund facilities for six months ended February 2024. Also, the company maintains a cash and cash equivalents of  Rs. 170 Cr. in FY24. Acuité believes that going forward the group will continue to maintain strong liquidity position owing to steady accruals and capacity expansion.

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.	1980.97	2173.20
PAT	Rs. Cr.	74.10	51.51
PAT Margin	(%)	3.74	2.37
Total Debt/Tangible Net Worth	Times	0.54	0.35
PBDIT/Interest	Times	5.83	6.83

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

­Not Applicable

Interaction with Audit Committee anytime in the last 12 months (applicable for rated-listed / proposed to be listed debt securities being reviewed by Acuite)

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 30 Mar 2024 Letter of Credit Short Term 12.50 ACUITE A2+ (Assigned) Proposed Long Term Bank Facility Long Term 2.50 ACUITE BBB+ | Stable (Assigned) Term Loan Long Term 165.00 ACUITE BBB+ | Stable (Reaffirmed) Term Loan Long Term 70.00 ACUITE BBB+ | Stable (Reaffirmed) Term Loan Long Term 150.00 ACUITE BBB+ | Stable (Reaffirmed) Term Loan Long Term 70.00 ACUITE BBB+ | Stable (Reaffirmed) Term Loan Long Term 70.00 ACUITE BBB+ | Stable (Assigned) Term Loan Long Term 50.00 ACUITE BBB+ | Stable (Assigned) Term Loan Long Term 35.00 ACUITE BBB+ | Stable (Assigned) Term Loan Long Term 30.00 ACUITE BBB+ | Stable (Assigned) Cash Credit Long Term 60.00 ACUITE BBB+ | Stable (Assigned) Cash Credit Long Term 20.00 ACUITE BBB+ | Stable (Assigned) Cash Credit Long Term 30.00 ACUITE BBB+ | Stable (Assigned) Cash Credit Long Term 20.00 ACUITE BBB+ | Stable (Assigned) 01 Feb 2024 Term Loan Long Term 165.00 ACUITE BBB+ | Stable (Reaffirmed) Term Loan Long Term 70.00 ACUITE BBB+ | Stable (Reaffirmed) Term Loan Long Term 150.00 ACUITE BBB+ | Stable (Reaffirmed) Term Loan Long Term 70.00 ACUITE BBB+ | Stable (Reaffirmed) 04 Nov 2022 Term Loan Long Term 165.00 ACUITE BBB+ | Stable (Reaffirmed) Term Loan Long Term 70.00 ACUITE BBB+ | Stable (Reaffirmed) Term Loan Long Term 150.00 ACUITE BBB+ | Stable (Reaffirmed) Term Loan Long Term 70.00 ACUITE BBB+ | Stable (Reaffirmed) 07 Jan 2022 Proposed Long Term Bank Facility Long Term 15.00 ACUITE BBB+ | Stable (Assigned) Proposed Long Term Bank Facility Long Term 440.00 ACUITE BBB+ | Stable (Assigned)

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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. 30.00 Simple ACUITE A1 | Assigned Punjab National Bank Not avl. / Not appl. Cash Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 60.00 Simple ACUITE A+ | Stable | Upgraded ( from ACUITE BBB+ ) UCO Bank Not avl. / Not appl. Cash Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 20.00 Simple ACUITE A+ | Stable | Upgraded ( from ACUITE BBB+ ) Indian Bank Not avl. / Not appl. Cash Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 30.00 Simple ACUITE A+ | Stable | Upgraded ( from ACUITE BBB+ ) Canara Bank Not avl. / Not appl. Cash Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 20.00 Simple ACUITE A+ | Stable | Upgraded ( from ACUITE BBB+ ) Canara Bank Not avl. / Not appl. Cash Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 14.00 Simple ACUITE A+ | Stable | Assigned Punjab National Bank Not avl. / Not appl. Cash Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 75.00 Simple ACUITE A+ | Stable | Assigned Bank of India Not avl. / Not appl. Cash Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 10.00 Simple ACUITE A+ | Stable | Assigned Axis Bank Not avl. / Not appl. Cash Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 25.00 Simple ACUITE A+ | Stable | Assigned Punjab National Bank Not avl. / Not appl. Letter of Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 12.50 Simple ACUITE A1 | Upgraded ( from ACUITE A2+ ) Punjab National Bank Not avl. / Not appl. Letter of Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 12.50 Simple ACUITE A1 | Assigned Axis Bank Not avl. / Not appl. Letter of Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 15.00 Simple ACUITE A1 | Assigned Canara Bank Not avl. / Not appl. Letter of Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 10.00 Simple ACUITE A1 | Assigned Punjab National Bank Not avl. / Not appl. Term Loan Not avl. / Not appl. Not avl. / Not appl. 31 Dec 2031 165.00 Simple ACUITE A+ | Stable | Upgraded ( from ACUITE BBB+ ) UCO Bank Not avl. / Not appl. Term Loan Not avl. / Not appl. Not avl. / Not appl. 31 May 2032 70.00 Simple ACUITE A+ | Stable | Upgraded ( from ACUITE BBB+ ) Indian Bank Not avl. / Not appl. Term Loan Not avl. / Not appl. Not avl. / Not appl. 31 May 2032 150.00 Simple ACUITE A+ | Stable | Upgraded ( from ACUITE BBB+ ) Canara Bank Not avl. / Not appl. Term Loan Not avl. / Not appl. Not avl. / Not appl. 31 Mar 2027 70.00 Simple ACUITE A+ | Stable | Upgraded ( from ACUITE BBB+ ) Punjab National Bank Not avl. / Not appl. Term Loan Not avl. / Not appl. Not avl. / Not appl. 31 Mar 2033 70.00 Simple ACUITE A+ | Stable | Upgraded ( from ACUITE BBB+ ) UCO Bank Not avl. / Not appl. Term Loan Not avl. / Not appl. Not avl. / Not appl. 31 Mar 2033 50.00 Simple ACUITE A+ | Stable | Upgraded ( from ACUITE BBB+ ) Indian Bank Not avl. / Not appl. Term Loan Not avl. / Not appl. Not avl. / Not appl. 31 Mar 2033 35.00 Simple ACUITE A+ | Stable | Upgraded ( from ACUITE BBB+ ) Canara Bank Not avl. / Not appl. Term Loan Not avl. / Not appl. Not avl. / Not appl. 31 Mar 2033 30.00 Simple ACUITE A+ | Stable | Upgraded ( from ACUITE BBB+ ) Canara Bank Not avl. / Not appl. Term Loan Not avl. / Not appl. Not avl. / Not appl. 31 Mar 2034 2.50 Simple ACUITE A+ | Stable | Upgraded ( from ACUITE BBB+ ) Canara Bank Not avl. / Not appl. Term Loan Not avl. / Not appl. Not avl. / Not appl. 31 Mar 2034 7.50 Simple ACUITE A+ | Stable | Assigned Punjab National Bank Not avl. / Not appl. Term Loan Not avl. / Not appl. Not avl. / Not appl. 31 Mar 2034 45.00 Simple ACUITE A+ | Stable | Assigned Bank of India Not avl. / Not appl. Term Loan Not avl. / Not appl. Not avl. / Not appl. 31 Mar 2034 42.00 Simple ACUITE A+ | Stable | Assigned

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

Sr. No. Company name 1 Gagan Ferrotech Limited. (Flagship Company) 2 Gajanan Iron Private Limited (Group Company) 3 Shakambari Overseas Trades Private Limited( Group Company) 4 Spintech Tubes Private Limited (Group Company)

Contacts

Mohit Jain Senior Vice President - Rating Operations Nidhi Gala 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.