ICRA Limited has assigned credit ratings of [ICRA]A+ and [ICRA]A1 to Tega Industries Limited, placing the company on Rating Watch with Developing Implications. This action follows the company’s strategic plan to acquire AIP MC Holdings LLC (Molycop). The acquisition, valued at approximately $1.455 billion, is set to be funded through a mix of equity, internal accruals, and a proposed term loan of Rs. 1,500 crore.
Strategic Acquisition of Molycop
Tega Industries has entered into a definitive agreement to acquire an 84.18% equity stake in Molycop for approximately $394 million. This transaction, executed in collaboration with Apollo Funds, aims to leverage Molycop’s status as a global leader in grinding media. The combination of Tega’s mill liners and Molycop’s grinding media is expected to create a powerful, integrated solution for the global mining industry.
Financial and Operational Impact
While the acquisition is viewed as a strategic move to boost global scale and cross-selling capabilities, it has led to a temporary elevation in leverage metrics. Tega has raised Rs. 1,713 crore in equity to support the deal. ICRA anticipates that the consolidated debt/OPBDITA ratio will remain elevated over the next two years before gradually improving through earnings accretion, debt repayment, and potential asset monetization.
Liquidity and Future Outlook
Despite the significant capital outlay of Rs. 3,620 crore for the acquisition, the company maintains an adequate liquidity position. As of March 31, 2026, Tega is estimated to hold cash and cash equivalents of Rs. 2,200–2,250 crore. The company’s business remains robust, supported by a healthy order book and a geographically diversified revenue stream, with operations spanning 90+ countries and manufacturing facilities across India, Chile, South Africa, and Australia.
Next Steps
The rating watch reflects the pending completion of the acquisition and finalization of debt terms. ICRA expects to resolve the watch upon the successful closure of the transaction, which is currently expected by June 2026, and the receipt of all final regulatory approvals.
Source: BSE
