Announcement under Reg 30 - Credit Rating
SUDARSCHEM · price
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CRISIL has removed its earlier 'Rating Watch with Developing Implications' on Sudarshan Chemical's Rs. 50 Crore Commercial Paper and reaffirmed the rating at CRISIL A1+, the highest short-term rating. The watch was originally placed in October 2024 after the company announced its Rs. 1,180 Crore acquisition of the Heubach Group's global pigment business. CRISIL cited the company's expected maintenance of Rs. 800-850 Crore in unencumbered liquidity and a clear debt repayment structure (15-month moratorium, repayments starting September 2027) as reasons for resolving the watch. The acquisition was funded by around Rs. 1,600 Crore of debt and Rs. 1,000 Crore of equity, and was completed in March 2025. CRISIL noted that debt protection metrics will moderate — adjusted gearing expected to stay above 1x and debt-to-OPBDIT peaking near 4x during the Heubach turnaround phase, before improving after fiscal 2028.
Positive sentiment for shareholders — the resolution of the rating watch removes overhang from the large Heubach acquisition, and reaffirmation at the top short-term rating signals CRISIL's comfort with the company's liquidity buffer and repayment plan. However, the company's financial risk profile will be weaker in the near term, with consolidated margins and returns expected to dip until the Heubach turnaround delivers synergies.