Steel Authority of India Limited (SAIL) has received a significant upgrade in its credit rating from India Ratings and Research. The Long-Term Issuer Rating and key debt instruments have been elevated to ‘IND AA+’ with a Stable Outlook, a marked improvement from the previous ‘IND AA’ rating. This upgrade reflects SAIL’s enhanced operational performance, improved financial leverage, and strategic initiatives, signaling increased financial stability and reduced risk for investors.
SAIL’s Credit Rating Sees Major Upgrade
Steel Authority of India Limited (SAIL) has been assigned an upgraded credit rating by India Ratings and Research (Ind-Ra). The company’s Long-Term Issuer Rating and its associated debt instruments have been upgraded to ‘IND AA+’ with a Stable Outlook. This represents a positive shift from the prior ‘IND AA’ rating, underscoring SAIL’s strengthening financial position and operational capabilities.
Key Rating Actions and Drivers
Ind-Ra’s revised rating reflects SAIL’s improved operational performance observed over FY26-1QFY27. This enhancement is attributed to increased sales volumes and reduced production costs, driven by better raw material management, improved coke rates, and enhanced blast furnace productivity. Furthermore, the consolidated net adjusted leverage has shown improvement, aided by a reduction in net debt stemming from better working capital management and the repayment of long-term debt.
The rating action also notes that the EBITDA per tonne (t) for FY26 remained low but stable, a result of operating efficiencies from modernization initiatives and moderating raw material prices. Crucially, the EBITDA per tonne improved in 1QFY27 and is anticipated to remain elevated due to ongoing cost reduction efforts. The upcoming operationalization of the Tasra and Rowghat mines is expected to bolster raw material availability and support profitability.
Instrument-wise Rating Changes
Specific rating actions include an upgrade for bank loan facilities and public deposits to ‘IND AA+/Stable’. Commercial paper ratings remain affirmed at ‘IND A1+’, while the rating for Bonds has been withdrawn following full repayment.
Outlook and Future Prospects
The Stable Outlook reflects Ind-Ra’s expectation of continued improvement in SAIL’s operational efficiency and financial metrics. While significant capital expenditure is planned for FY27-FY31, the company’s strong business profile, government support, and ongoing cost optimization measures are expected to mitigate potential leverage increases. SAIL’s robust business profile, integrated operations, and strategic initiatives position it well for sustained performance.
Source: BSE
