Please find enclosed herewith the intimation with respect to revision in credit rating by Crisil Ratings Limited.
TEGA · price
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Crisil Ratings has downgraded Tega Industries' long-term rating from 'AA-' to 'A+/Stable' and short-term rating from 'A1+' to 'A1', while removing both from 'Rating Watch with Developing Implications'. The downgrade follows the company's acquisition of Molycop group for approximately Rs.13,325 crore (~$1.455 billion), which is expected to significantly increase leverage. Consolidated debt is projected to reach Rs.9,700-9,800 crore by fiscal 2027, with debt/EBITDA ratio peaking at 4.0-4.5x before improving. The bank loan facility size was enhanced from Rs.350 crore to Rs.2,000 crore. Despite the near-term financial moderation, Crisil notes the combined entity will become the world's largest player in mining consumables, with revenues expected to exceed Rs.17,000 crore.
The rating downgrade reflects increased credit risk from debt-funded acquisition, though the company remains investment grade. Shareholders should monitor the company's ability to achieve projected synergies and reduce debt over the next 18-20 months as the combined entity scales up.