Tega Industries has announced a revision in its credit rating to Crisil A+/Stable/Crisil A1, following its strategic move to acquire the global mining consumable leader, Molycop. While the acquisition significantly scales the company’s operations, the rating adjustment reflects the temporary increase in leverage. The consolidated entity is positioned to become the world’s largest player in the critical mining consumables sector, with a renewed focus on debt reduction and operational synergy realization over the coming months.
Strategic Acquisition and Financial Impact
Tega Industries is in the final stages of completing a transformative $1.455 billion acquisition of the Molycop group. This strategic move is set to drastically expand Tega’s global footprint, integrating Molycop’s leading grinding media business—which holds an 84% volume share in copper and gold mining—into Tega’s established portfolio. The consolidated revenue of the new entity is expected to exceed Rs 17,000 crore this fiscal year.
Rating Rationale and Leverage
Following the acquisition, the consolidated debt is expected to peak at 4.0–4.5 times Debt/Ebitda in fiscal 2027. To manage this, Tega has initiated a clear deleveraging roadmap, including raising additional equity, monetizing non-core assets, and refinancing high-cost debt at lower interest rates. The company expects these measures to drive the debt/Ebitda ratio down to 3.0–3.5 times by fiscal 2028.
Operational Synergies and Future Outlook
The integration of Molycop is expected to create a highly diversified global powerhouse with 24 manufacturing sites worldwide. By combining digital technology with Tega’s extensive product basket, the entity will offer comprehensive solutions across the entire mining value chain—from crushing to refining. With operating margins projected to remain healthy between 13% and 15%, the company remains focused on realizing post-acquisition synergies within the next 12 to 18 months.
Strong Liquidity Position
Despite the high capital expenditure associated with the acquisition, the consolidated group maintains a robust liquidity profile. The combined entity expects net cash accruals to exceed Rs 900 crore over the medium term, providing a comfortable buffer against annual debt obligations of approximately Rs 200–300 crore. This financial stability, combined with a strong, repeat-order customer base, supports the stable outlook assigned by the rating agency.
Source: BSE
