CARE has reaffirmed ‘BBB+’ rating assigned to MSP Steel & Power’s long term bank facilities, which has been enhanced from Rs 871.3 crore to Rs 956.9 crore worth. The credit rating agency also has reaffirmed ‘A2’ rating assigned to company’s short term bank facilities, reduced from Rs 47 crore to Rs 43 crore. The ratings continue to draw comfort from rich experience of the promoters, operational efficiency arising from backward integration, increase in revenue from high value structural products, improvement in sales & profitability levels for FY12, commissioning of large size projects in H1FY13 and advanced stage of completion of ongoing project.
The ratings are however, constrained by high leverage ratios, volatility in input and finished goods prices along with increasing competition from unorganized sector players and weakening credit profile of steel players. Ability of the company to improve upon profitability in the wake of rising input prices, improvement in capital structure and ability to stabilize recently commissioned projects & derive benefit there from are the key rating sensitivities.
MSPL, the flagship company of the MSP group, is over a decade old business house belonging to Agrawal family of Kolkata. It is currently engaged in manufacturing of sponge iron, billets, TMT bars and structural’s besides having backward integration for washing of coal, pellets cum iron ore beneficiation and power. Besides, the company is also involved in trading of steel products.
| Company Name | CMP |
|---|---|
| Tata Steel | 212.05 |
| JSW Steel | 1239.90 |
| SAIL | 173.50 |
| Jindal Stainless | 787.90 |
| APL Apollo Tubes | 2105.45 |
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