Crisil upgrades outlook on Jindal Stainless to positive
Attributes reasons to company’s improved business risk profile, an expected uptick in scale and forward integration with capacity expansion and acquisitions
New Delhi: Jindal Stainless Ltd (JSL) on Thursday said Crisil Ratings has revised its outlook on the stainless steelmaker’s long-term bank facilities and debt programme to ‘AA’ with a positive outlook.
The rating agency has revised its outlook in view of the company's improved business risk profile, an expected uptick in scale and forward integration with capacity expansion and acquisitions, JSL said in a statement.
“JSL has earned an outlook upgrade of Positive from Stable from the Crisil Ratings on the long-term bank facilities and debt programme, and a reaffirmed rating at CRISIL AA-. Meanwhile, the rating on the short-term bank facilities has been reaffirmed at CRISIL A1+,” it said.
Some of the parameters that Crisil Ratings took note of in order to elevate the outlook include the completion of the merger process of Jindal Stainless Hisar Limited (JSHL) with the company, the healthy financial risk profile of the company led by strong liquidity, its strategic acquisitions, an agile business model, and its ongoing capacity expansion project to 2.9 million tonnes per annum.
“The company's leadership position in the domestic stainless steel industry, efficient working capital management along with a healthy demand outlook and sizable export presence were some of the other factors that contributed to the revised outlook," it said.
JSL Managing Director Abhyuday Jindal said the upgradation denotes company's strong business fundamentals and its commitment to mitigating environmental and social risks. According to Crisil Ratings, the business risk profile of the company will continue to improve, given its focus on high-margin segments, synergies arising from its recent acquisitions, and completion of its planned capex in fiscal 2024. Financial risk profile is expected to remain healthy despite capex, aided by the sustenance of its margin profile, it said.
Jindal Steel and Power Ltd (JSPL) on Thursday said its promoter companies have cleared the steel maker's entire loan against shares to the lenders.
“Promoter companies of Naveen Jindal Group namely OPJ Trading Pvt Ltd, Opelina Sustainable Services and Gagan Infraenergy have fully repaid its all the outstanding loans against shares. The loan against shares which peaked to approximately Rs1,140 crore during October 2018 has been reduced to nil,” JSPL said in a statement. The promoter companies paid the last tranche of Rs 136 crore of loan on Wednesday. JSPL has a significant presence in the steel, power, and mining sectors with an investment of over Rs90,000 crore across the globe. Shares of the company rose 0.19 per cent to Rs 544.45 apiece on BSE.