New Delhi: Crisil has upgraded its long-term and short-term ratings on the bank facilities of Jindal Steel and Power Limited (JSPL) to BBB Positive / A3+ positive from BBB Negative and A3. The ratings agency has also upgraded JSPL’s non-convertible debentures (NCDs) worth ₹1912 crore to BBB positive from BBB stable.
At 1257 pm, shares of JSPL were trading 0.7% lower at ₹174.50 apiece on BSE, while the benchmark Sensex was 0.5% down at 40,709.68 points.
The upgrade reflects expected improvement in JSPL's business risk profile over the medium term on account of restart of the coal gasification process (CGP)-based Direct Reduced Iron (DRI) plant of 1.8 million tonne per annum (mtpa) at Angul, Odisha. This has not only enhanced finished steel capacity but also provided more flexibility in operations, Crisil said in a statement.
The Supreme Court on Thursday allowed JSPL to transport high quality iron ore lying at its Sarda Mines but with riders. The apex court has said that the iron ore can be transferred only after Sarda Mines Pvt Ltd (SMPL) pays off its dues to the Odisha government. The decision will allow JSPL to transport ₹2,000 crore worth of 12 million tonne of iron ore from Sardda Mines to its pellet plant at Barbil, both in Odisha.
The ratings reflect JSPL's superior position in the value-added long steel products segment, improving operating efficiencies, and well-diversified operations. These strengths are partially offset by average, albeit improving, financial risk profile, limited raw material integration, and susceptibility to economic cycles, Crisil added.
For the quarter ended 31 December, JSPL recorded the highest ever quarterly domestic production of crude steel and related products with a 22% year on year growth. The total crude steel and related production stood at 1.61 million tonnes, compared to 1.32 million tonnes in the corresponding period last year.