CARE raises Jindal Stainless’ credit rating to AA, with a Stable Outlook - Jindal Stainless

CARE raises Jindal Stainless’ credit rating to AA, with a Stable Outlook

New Delhi, October 11, 2023: India’s largest stainless steel manufacturer, Jindal Stainless, has earned a credit ratings upgrade from AA- stable to AA stable from CARE Ratings, one of the country’s leading credit rating agencies, on long-term bank facilities and non-convertible debentures. The rating on short-term bank facilities has been reaffirmed at CARE A1+.

Commenting on the development, Managing Director, Jindal Stainless, Mr Abhyuday Jindal, said, “The upgrade by CARE Ratings, attributed to Jindal Stainless’ resilient operational and profitability performance, is an endorsement of our efforts to offer end-to-end sustainable solutions. Our focus to increase the share of value-added products, along with our flexibility to shift between the domestic and exports market has enabled the company to withstand the adverse industry cycle. We look forward to sustaining this momentum through operational excellence and fostering an ecosystem dedicated to stainless steel for increased awareness and adoption in the country.”

The rating agency has revised its outlook in view of the performance of the company, demonstrated by its consistently improving sales volumes and higher-than-envisaged Profit Before Interest, Lease rentals, Depreciation and Taxation (PBILDT) per tonne over the last two years. The agency also considered the company’s persistent improvement in its debt coverage metrics. It noted that Jindal Stainless has recorded a “steady-state improvement” in its sales volumes over the last three years and that it expects the likely continuation of an increase in sales volume over the next two years with the commissioning of an additional one million tonnes per annum (MTPA) capacity at Jajpur, Odisha.

Group CFO and Executive Director, Jindal Stainless, Mr Anurag Mantri, said, Jindal Stainless improved rating is testimony to our prudent capital allocation policy and robust balance sheet management. Despite being in the organic and inorganic capex cycle, our leverage ratios are among the best in the industry. We continue to focus on efficient working capital management and financial discipline to maximise value for all our stakeholders.” 

Within the corporate sector, CARE Ratings rate debt instruments and bank facilities of manufacturing entities, service entities, trading entities, PSUs, etc. While evaluating, CARE also considered the company’s increasing focus to diversify its product portfolio by including long stainless steel products through the acquisition of Rathi Super Steel Limited, entering into a collaboration agreement with New Yaking Pte Ltd to obtain a 49% stake in a Nickel Pig Iron smelter facility in Indonesia, the successful merger of Jindal Stainless (Hisar) Limited into Jindal Stainless, the expansion to achieve a melt capacity of ~3 million tonnes per anum, and the acquisition of the remaining 74% stake in Jindal United Steel Limited (JUSL), thereby making JUSL a wholly-owned subsidiary.

In a separate development, CARE Ratings also revised the long-term bank facilities of JUSL from CARE AA-; Stable to CARE A+; Positive. This rating upgrade was carried out on the basis of “sustained improvement in the operational performance, expanded capacity, and envisaged growth in tolling volumes (conversion of slabs into coils).”

About Jindal Stainless

India’s leading stainless steel manufacturer, Jindal Stainless, has an annual turnover of INR 35,700 crore (US $4.30 billion) in FY23 and is ramping up its facilities to reach ~3 million tonnes of annual melt capacity in FY24. It has two stainless steel manufacturing facilities in India, in the states of Odisha and Haryana, and an overseas unit in Indonesia — this unit serves the markets of Southeast Asia and nearby regions. Jindal Stainless has a worldwide network in 15 countries and one service centre in Spain. In India, there are 10 sales offices and six service centres. The company’s product range includes stainless steel slabs, blooms, coils, plates, sheets, precision strips, blade steel and coin blanks.

Integrated operations have given Jindal Stainless the edge in cost competitiveness and operational efficiency, making it one of the world’s top five stainless steel players (ex-China). Founded in 1970, Jindal Stainless continues to be inspired by a vision for innovation and enriching lives and is committed to social responsibility. The company boasts an excellent workforce, value-driven business operations, customer centricity and the best safety practices in the industry.

Jindal Stainless remains committed to a greener, sustainable future, fuelled by environmental responsibility. The company manufactures stainless steel using scrap in an electric arc furnace, the least greenhouse gas emission route since it enables 100% recyclability with no reduction in quality, thereby achieving a circular economy. The company aims to reduce carbon emission intensity by 50% until FY 2035 (from FY 2022 baseline levels of 1.91 tonnes CO2/tonnes of crude steel) and achieve Net Zero by 2050.