Vision Sponge Iron Pvt. Ltd.

Brickwork Ratings (BWR) has reaffirmed the long-term rating at BWR BBB- while revising the outlook from Stable to Negative, along with the reaffirmation of the short-term rating at BWR A3 for the Rs. 42.65 crore bank loan facilities of Vision Sponge Iron Pvt Ltd (VSIPL).

Particulars

Facilities**	Amount (Rs.Crs.)		Tenure	Rating#
	Previous	Present		Previous (16 May 2025)	Present
Fund Based	40.00	40.00	Long Term	BWR BBB- /Stable Reaffirmation	BWR BBB - /Negative Reaffirmation and change in Outlook
Non Fund Based	2.65	2.65	Short Term	BWR A3 Reaffirmation	BWR A3 Reaffirmation
Grand Total	42.65	42.65	(Rupees Forty Two Crores and Sixty Five lakhs Only)

#Please refer to BWR website www.brickworkratings.com for definition of the ratings
**Details of Bank Loan facilities,consolidation or instruments are provided in Annexure

RATING ACTION / OUTLOOK

Brickwork Ratings (BWR) has reaffirmed the long-term rating at BWR BBB- while revising the outlook from Stable to Negative, along with the reaffirmation of the short-term rating at BWR A3 for the Rs. 42.65 crore bank loan facilities of Vision Sponge Iron Pvt Ltd (VSIPL).

The rating reaffirmation continues to factor in the promoters' extensive experience, the company's established operational track record, locational advantages, a diversified product portfolio, and a moderate financial risk profile. However, these strengths remain constrained by intense industry competition and the susceptibility of operating margins to volatile input costs.

The revision of the outlook to Negative is driven by a recent deterioration in VSIPL's financial metrics, primarily a decline in TOI. This downturn stems from subdued market conditions in the broader steel industry, coupled with a complete factory shutdown for a scheduled 4-to-5-year preventive maintenance cycle. This operational halt led to a surge in unabsorbed operating expenses, ultimately pushing the company into operating losses. The outlook may be revised back to Stable if the company demonstrates a sustained recovery and improves its financial risk profile over the medium term.

In arriving at these ratings, BWR relied on VSIPL's audited financial statements up to FY25, provisional figures for FY26, financial projections for FY26 and FY27, and additional clarifications provided by the management.

KEY RATING DRIVERS

Credit Strengths:

• Moderate financial risk profile :

  The company's financial risk profile remained moderate, marked by a moderation in Total Operating Income from Rs.455.05 crore in FY25 to Rs.408.45 crore in FY26 (Prov.), primarily due to subdued steel market conditions and volatility in steel prices. Consequently, the net profit margin declined from 2.53% in FY25 to 0.34% in FY26 (Prov.). However, the company's Tangible Net Worth improved marginally to Rs.295.09 crore as on March 31, 2026 (Prov.) from Rs.293.71 crore as on March 31, 2025, supported by continued profit retention and accretion to reserves.

  The capital structure and liquidity profile remained comfortable, with TD/TNW and TOL/TNW remaining almost nil due to negligible utilization of working capital limits. Further, the current ratio remained strong at 7.29x as on March 31, 2025, reflecting adequate liquidity and prudent working capital management

• Access to raw materials :

  Company is strategically located in Purulia, West Bengal, and the Company is able to access raw materials easily, as it is in close proximity to Odisha and Jharkhand, thereby resulting in reducing time and logistics costs. As a result, the Company is able to maintain competitive prices for its customers, who are all having relationships with the company for more than 5 years.

• Long track record of promoters and experienced management team of the Company :

  The promoters have experience in manufacturing of steel products for more than a decade. Further to this, the Company has an experienced management team and established track record since its inception 

Credit Risks:

• Intense Competition :

  The Company faces competition in terms of cost from larger integrated players in the industry having captive iron ore mines and captive power plants. The Company can mitigate this risk to a large extent by further diversification or by expansion towards integrated operations.

• Susceptibility of the operating margins to volatility in input costs :

  The key raw materials iron ore and coal prices have shown a volatile trend over the past years any adverse movement might impact operating margin. However, the company is able to partially pass on the increase to the customers.

ANALYTICAL APPROACH - Standalone

For arriving at its ratings, BWR has applied its rating methodology as detailed in the Rating Criteria detailed below (hyperlinks provided at the end of this rationale)

RATING SENSITIVITIES

Going forward, the company's ability to achieve a sustained improvement in its scale of operations, profitability margins, overall credit risk profile, and efficiently manage its working capital requirements will remain the key rating sensitivities.

Positive: The rating may be upgraded if the company demonstrates a sustained improvement in its operational and financial performance, with operating profit margins exceeding 4.00%, Total Operating Income (TOI) exceeding 500.00 crore, accompanied by a significant and sustained increase in the scale of operations, while maintaining a strong financial risk profile and adequate liquidity.

Negative: The rating may be downgraded if there is a material deterioration in the company's financial risk profile, a decline in Total Operating Income below 470.00 crore, operating losses declining below 3%, weakening liquidity indicators, or any significant deterioration in the company's overall financial performance and debt protection metrics

LIQUIDITY INDICATORS - Adequate

The liquidity position of the company is adequate, supported by healthy internal accruals, comfortable working capital management, and the absence of long-term debt.

• The average utilization of the company's cash credit facilities remained low over the past 12 months, with positive balances maintained in most accounts on several occasions, indicating comfortable liquidity management.
• The company reported healthy Net Cash Accruals (NCA) of ₹15.57 crore in FY24 against nil Current Portion of Long-Term Debt (CPLTD), providing adequate debt servicing cushion.
• The current ratio remained strong at 7.29x in FY25, reflecting a comfortable short-term liquidity position.
• Further, VSIPL has not availed any long-term borrowings, which limits debt servicing obligations and supports its overall liquidity profile

ABOUT THE ENTITY

Vision Sponge Iron Private Limited (VSIPL) was incorporated in 2002 by the Jhunjhunwala family. The Company is into manufacturing of Sponge Iron (1,20,000MTPA), M. S. Billets (1,00,000MTPA) and Ferro alloys / Pig iron (6.5 MVA Furnace). In addition to that, it has a 15 MW Captive Power Plant, which is a key component of integrated operations ensuring energy efficiency and self-reliance & as part of future roadmap, the company is committed to expanding the captive power capacity through the Waste Heat Recovery model, reinforcing focus on sustainable and cost-effective energy solutions while supporting long-term operational growth.

The Company’s registered office is located in Kolkata and its manufacturing unit is located in Purulia, West Bengal & is currently serving more than 50+ clients.Some of the key clients are- Nirman TMT,Shyam Steel,Shyam Metalics,SRMB etc.

ESG Profile

The company demonstrates an Adequate ESG profile based on its environmental, social, and governance practices.

• Environmental: VSIPL operates in the energy-intensive iron and steel industry and has adopted measures such as a 15 MW captive power plant with Waste Heat Recovery Boilers (WHRB) to improve energy efficiency. The company also undertakes environmental initiatives, including plantation drives.
• Social: The company focuses on employee welfare, workplace safety, statutory compliance, and community development through CSR initiatives.
• Governance: VSIPL is managed by an experienced promoter group with established internal controls and compliance systems. No material governance concerns have been observed based on publicly available information.

KEY FINANCIAL INDICATORS (Standalone)

Key Parameters	Units	FY 23 - 24 (Audited - Annual)	FY 24 - 25 (Audited - Annual)	FY 25 - 26 (Provisional - Annual)
Operating Revenue	Rs.Crs.	456.85	455.05	408.46
EBITDA	Rs.Crs.	23.49	14.23	-0.22
PAT	Rs.Crs.	19.28	11.50	1.38
Tangible Net Worth	Rs.Crs.	282.21	293.71	295.09
Total Debt / Tangible Net Worth	Times	Not Available	Not Available	Not Available
Current Ratio	Times	13.11	7.29	9.22

KEY COVENANTS OF THE FACILITY RATED

The key covenants are the standard terms as stipulated in the sanction letters of the rated facilities.

STATUS OF NON-COOPERATION WITH PREVIOUS CRA

Not Applicable

RATING HISTORY FOR THE PREVIOUS THREE YEARS (including withdrawal and suspended)

Facilities	Current Rating (2026)			2025		2024		2023
Type	Tenure	Amount (Rs.Crs.)	Rating	Date	Rating	Date	Rating	Date	Rating
Fund Based	LT	40.00	BWR BBB-/Negative (Reaffirmation and change in Outlook)	16May2025	BWR BBB- Stable (Reaffirmation)	18Mar2024	BWR BBB- Stable (removal from ISSUER NOT COOPERATING* category/Reaffirmed)	01Sep2023	BWR BBB- Stable (ISSUER NOT COOPERATING* /Downgrade)
Non Fund Based	ST	2.65	BWR A3 (Reaffirmation)	16May2025	BWR A3 (Reaffirmation)	18Mar2024	BWR A3 (removal from ISSUER NOT COOPERATING* category/Reaffirmed)	01Sep2023	BWR A3 (ISSUER NOT COOPERATING* /Downgrade)
Grand Total		42.65	(Rupees Forty Two Crores and Sixty Five lakhs Only)

Hyperlink/Reference to applicable Criteria

• General Criteria
• Approach to Financial Ratios
• Short Term Debt
• Manufacturing Company
• Manufacturing Company

Analytical Contacts
Mukul Singh Sahu Ratings Analyst mukulsingh.s@brickworkratings.com	Ravi Rashmi Dhar Director - Ratings ravi.d@brickworkratings.com
Media Contact | media@brickworkratings.com	Client Support | clientsupport@brickworkratings.com

SL.No.	Name of the Bank/Lender	Type Of Facilities	Long Term(Rs.Crs.)	Short Term(Rs.Crs.)	Total(Rs.Crs.)	Complexity of the Instrument
1	Bank of Baroda	Cash Credit	6.00	_	6.00	Simple##
2	Bank of India	Bank Guarantee	_	2.50	2.50	Simple##
3	Bank of India	Letter of Credit	_	0.15	0.15	Simple##
4	Bank of India	Cash Credit	6.00	_	6.00	Simple##
5	Punjab National Bank	Cash Credit	8.00	_	8.00	Simple##
6	State Bank Of India (SBI)	Cash Credit	20.00	_	20.00	Simple##
Total			40.00	2.65	42.65
TOTAL (Rupees Forty Two Crores and Sixty Five lakhs Only)

## BWR complexity levels are meant for educating investors. The BWR complexity levels are available at www.brickworkratings.com / download / ComplexityLevels.pdf. Investors queries can be sent to info@brickworkratings.com.