Lloyds Metals and Energy Ltd

Brickwork Ratings upgrades the long-term rating for the Bank Loan Facilities of Rs. 100.00 Crs. of Lloyds Metals and Energy Limited

Facilities** Amount (Rs.Crs.) Tenure Rating#
Previous Present Previous
(19 Aug 2021)
Fund Based 100.00 100.00 Long Term BWR BBB/Stable
BWR BBB + /Stable
Grand Total 100.00 100.00 (Rupees One Hundred Crores 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


The rating revision reflects the improvement in the operating efficiency following the commencement of the mining & extraction activity in October 2021 at the Surajgarh Iron ore mines, allotted on lease to Lloyds Metals & Energy Limited (LMEL or “the company”) till the year 2057. The company’s operating profile is supported by benefits from the improvement in the capacity utilization levels as well as a partially integrated nature of operations supported by captive iron ore mines, captive power generation, and sponge iron manufacturing capacity which in turn lead to an efficient cost structure. The captive sourcing of the iron ore ensures continuous availability resulting in improved capacity utilization levels and a reduction in the cost of iron ore procurement by nearly 50 percent leading to significant improvement in the profitability of the company. Also, the surplus iron ore produced over the requirement is available for sale and hence contributes to the revenue of the company. The steel industry also witnessed a sharp rebound in the second half of FY2021 which supported the overall performance of the company. 

The company is also setting up a mineral based Steel plant at Konsari, Gadchiroli district for manufacturing sponge iron with a capacity of 75000 metric tonnes per annum (MTPA) at the initial stage, and subsequently capacity to manufacture other value-added products will be set up. The forward integration being undertaken by the company is expected to further enhance its business risk profile. The rating revision also considers the significant infusion in the capital of the company during the current year leading to a significant reduction in overall debt and interest outgo for the company. The capital infusion will also support the ongoing & future capital expenditure plan of the company.  

The rating continues to draw comfort from the established market presence of the Company supported by the extensive experience of the promoters in the iron & steel industry. The rating also derives comfort from the partially integrated nature of operations wherein the Company is engaged in manufacturing sponge iron and also has a 30MW captive power generation capacity. Further, the rating also derives comfort from the unsecured loans provided by the promoters as and when needed along with infusion in the capital.  

However, the rating is constrained by the susceptibility of the operations & profitability to the volatility in the sponge iron & iron ore prices along with cyclicality in the steel industry. The rating is also constrained by the presence of the highly competitive and fragmented sponge iron manufacturing industry.  

Outlook: Stable

BWR believes that LMEL’s business risk profile will be healthy considering the favorable demand outlook for the steel industry and the company's captive iron ore sourcing arrangement. The business risk profile is also supported by the company’s established market presence, experienced promoters along with long-standing relationships with the customers. The “Stable” outlook indicates a low likelihood of rating change over the medium term.



Credit Strengths:

Credit Risks:


For arriving at its ratings, BWR has principally relied upon the standalone audited financials up to FY22, publicly available information, and clarification/information provided by the Company. 




Going forward, BWR will monitor the following key rating sensitivity factors for any rating change. 


The rating can be upgraded if the company reports:


The rating can be downgraded if the company reports:


The company has reported a significant increase in net cash accruals from Rs.13.95 crore in FY 2021 to Rs. 105.78 crore in FY 2022. The current ratio comfortably stood at 2.61 times as on 31st March 2022. Further, the company’s average working capital limit utilization stood at around 8.40 percent for the period from August 2021 to August 2022. 

The unencumbered cash and cash equivalents stood at Rs. 21.87 crores as on 31st March 2022. Further, the repayment of around Rs. 42.28 crores is estimated during the period from FY2023 to FY2025 and the same is expected to be met through internal accruals and infusion in the share capital by promoters. Also, the company had raised around Rs. 202.00 crores through the issue of new shares and application money for convertible warrants during FY 2022. Going forward, the company is to expected infuse promoters' funds in order to meet additional working capital requirements and any capital expenditures. 




Lloyds Metals and Energy Limited [Erstwhile Lloyds Metals & Engineer Limited] was initially incorporated as a private limited company under the name “Nagarjuna Metals and Engineer Private Limited” in the year 1977. Subsequently, in 1986 the constitution of the entity was converted into a public limited company and listed on the Bombay Stock Exchange in February 1987 however the name was changed to Lloyds Metals & Engineer Limited in January 1990 and to the latest name in April 2011. The Company is promoted by Mr. B. L. Agarwal & family along with TEMPL members holding around 74.63 percent; public shareholding stood at 25.09 percent and the non-promoter & Non-public group is 0.28 percent as on 31st March 2022. The day-to-day operations of the Company are handled by Mr. Babulal Agarwal who possesses more than five decades of experience in the iron & steel industry. 

The company is engaged in the manufacturing of sponge iron and its by-products along generation/distribution of power. The by-products of the sponge iron include Char, Fly Ash, ESP Dust, Bed Material, and Iron Ore Fines. The company’s sponge iron plant is located in the Chandrapur district of Maharashtra with an installed capacity of 300000 MTPA and also the captive power plant with a 30 MW capacity which runs on the waste heat gasses produced in the sponge kiln. The Company possesses certifications including ISO - 9001, 14001, OHSAS 18001 ISO 9001:2008. Sponge iron is an intermediate product; a source of metallics for secondary steel making through Electric Arc Furnace (EAF) or Induction Furnace (IF)  route. The sale of sponge iron contributed around 64 percent, iron ore contributed around 29 percent whereas power contributed around 7 percent to the total revenue for FY 2022. The main raw material required by the company is iron ore and non-coking coal. The iron ore is sourced from the iron ore mine located in Surjagarh village, Gadchiroli district Maharashtra which it has leased for a period of 50 years starting from 2007; the mining extraction activity commenced in October 2021. It also procures iron ore from other suppliers located in Raipur and Odisha. The company procures coal from Western Coalfields Limited under long-term linkages.

The company has only one associate under the name Thriveni Lloyds Mining Private Limited (TLMPL) effective from 28th May 2020 and has a 40 percent holding in it as on 31st March 2022. 

Key Parameters Units FY 21-22
FY 20-21
Operating Revenue Rs.Crs. 697.50 253.41
EBITDA Rs.Crs. 145.63 10.87
PAT Rs.Crs. 97.30 0.13
Tangible Net Worth Rs.Crs. 481.58 182.11
Total Debt/TNW Times 0.16 0.85
Current Ratio Times 2.61 1.63
Key Parameters Units FY 21-22
FY 20-21
Operating Revenue Rs.Crs. 697.50 253.41
EBITDA Rs.Crs. 145.63 10.87
PAT Rs.Crs. 97.30 0.13
Tangible Net Worth Rs.Crs. 481.65 182.11
Total Debt/TNW Times 0.16 0.96
Current Ratio Times 2.61 1.63

The terms of sanction include standard covenants normally stipulated for such facilities.


Not Applicable



RATING HISTORY FOR THE PREVIOUS THREE YEARS (including withdrawal and suspended)
Facilities Current Rating (2022) 2021 2020 2019
Type Tenure Amount
Rating Date Rating Date Rating Date Rating
Fund Based LT 100.00
BWR BBB+/Stable
BWR BBB-Stable
BWR BBB-Stable
Non Fund Based ST 0.00
Grand Total 100.00 (Rupees One Hundred Crores 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.

Hyperlink/Reference to applicable Criteria
Analytical Contacts

Shashikala Umanath Hegde

Senior Ratings Analyst Board : +91 22 2831 1426, +91 22 2831 1439 shashikala.h@brickworkratings.com

Vidya Shankar

Principal Director - Ratings Board : +91 80 4040 9940 vidyashankar@brickworkratings.com
1-860-425-2742 | media@brickworkratings.com
Lloyds Metals and Energy Ltd
Details of Bank Facilities rated by BWR
SL.No. Name of the Bank/Lender Type Of Facilities Long Term(Rs.Crs.) Short Term(Rs.Crs.) Total(Rs.Crs.)
1 Aditya Birla Finance Limited Term LoanOut-standing 19.20 _ 19.20
2 Citizen Credit Co-operative Bank Cash CreditSanctioned 10.00 _ 10.00
3 Citizen Credit Co-operative Bank Term LoanOut-standing 17.12 _ 17.12
4 Kotak Mahindra Bank Term LoanOut-standing _ _ 0.00
5 Others Cash CreditProposed 24.88 _ 24.88
6 TATA Capital Financial Services Limited Term LoanOut-standing 28.80 _ 28.80
Total 100.00 0.00 100.00
TOTAL (Rupees One Hundred Crores Only)
Print and Digital Media

The Rating Rationale is sent to you for the sole purpose of dissemination through your print, digital or electronic media. While it may be used by you acknowledging credit to BWR, please do not change the wordings in the rationale to avoid conveying a meaning different from what was intended by BWR. BWR alone has the sole right of sharing (both direct and indirect) its rationales for consideration or otherwise through any print or electronic or digital media.

About Brickwork Ratings

Brickwork Ratings (BWR), a Securities and Exchange Board of India [SEBI] registered Credit Rating Agency and accredited by Reserve Bank of India [RBI], offers credit ratings of Bank Loan, Non- convertible / convertible / partially convertible debentures and other capital market instruments and bonds, Commercial Paper, perpetual bonds, asset-backed and mortgage-backed securities, partial guarantees and other structured / credit enhanced debt instruments, Security Receipts, Securitization Products, Municipal Bonds, etc. BWR has rated over 12,000 medium and large corporates and financial institutions’ instruments. BWR has also rated NGOs, Educational Institutions, Hospitals, Real Estate Developers, Urban Local Bodies and Municipal Corporations. BWR has Canara Bank, a leading public sector bank, as one of the promoters and strategic partner. BWR has its corporate office in Bengaluru and a country-wide presence with its offices in Ahmedabad, Chandigarh, Chennai, Hyderabad, Kolkata, Mumbai and New Delhi along with representatives in 150+ locations.


Brickwork Ratings India Pvt. Ltd. (BWR), a Securities and Exchange Board of India [SEBI] registered Credit Rating Agency and accredited by the Reserve Bank of India [RBI], offers credit ratings of Bank Loan facilities, Non- convertible / convertible / partially convertible debentures and other capital market instruments and bonds, Commercial Paper, perpetual bonds, asset-backed and mortgage-backed securities, partial guarantees and other structured / credit enhanced debt instruments, Security Receipts, Securitization Products, Municipal Bonds, etc. [ hereafter referred to as "Instruments"]. BWR also rates NGOs, Educational Institutions, Hospitals, Real Estate Developers, Urban Local Bodies and Municipal Corporations.

BWR wishes to inform all persons who may come across Rating Rationales and Rating Reports provided by BWR that the ratings assigned by BWR are based on information obtained from the issuer of the instrument and other reliable sources, which in BWR's best judgment are considered reliable. The Rating Rationale / Rating Report & other rating communications are intended for the jurisdiction of India only. The reports should not be the sole or primary basis for any investment decision within the meaning of any law or regulation (including the laws and regulations applicable in Europe and also the USA).

BWR also wishes to inform that access or use of the said documents does not create a client relationship between the user and BWR.

The ratings assigned by BWR are only an expression of BWR's opinion on the entity / instrument and should not in any manner be construed as being a recommendation to either, purchase, hold or sell the instrument.

BWR also wishes to abundantly clarify that these ratings are not to be considered as an investment advice in any jurisdiction nor are they to be used as a basis for or as an alternative to independent financial advice and judgment obtained from the user's financial advisors. BWR shall not be liable to any losses incurred by the users of these Rating Rationales, Rating Reports or its contents. BWR reserves the right to vary, modify, suspend or withdraw the ratings at any time without assigning reasons for the same.

BWR's ratings reflect BWR's opinion on the day the ratings are published and are not reflective of factual circumstances that may have arisen on a later date. BWR is not obliged to update its opinion based on any public notification, in any form or format although BWR may disseminate its opinion and analysis when deemed fit.

Neither BWR nor its affiliates, third party providers, as well as the directors, officers, shareholders, employees or agents (collectively, "BWR Party") guarantee the accuracy, completeness or adequacy of the Ratings, and no BWR Party shall have any liability for any errors, omissions, or interruptions therein, regardless of the cause, or for the results obtained from the use of any part of the Rating Rationales or Rating Reports. Each BWR Party disclaims all express or implied warranties, including, but not limited to, any warranties of merchantability, suitability or fitness for a particular purpose or use. In no event shall any BWR Party be liable to any one for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees, or losses (including, without limitation, lost income or lost profits and opportunity costs) in connection with any use of any part of the Rating Rationales and/or Rating Reports even if advised of the possibility of such damages. However, BWR or its associates may have other commercial transactions with the company/entity. BWR and its affiliates do not act as a fiduciary.

BWR keeps certain activities of its business units separate from each other in order to preserve the independence and objectivity of the respective activity. As a result, certain business units of BWR may have information that is not available to other BWR business units. BWR has established policies and procedures to maintain the confidentiality of certain non-public information received in connection with each analytical process.

BWR clarifies that it may have been paid a fee by the issuers or underwriters of the instruments, facilities, securities etc., or from obligors. BWR's public ratings and analysis are made available on its web site, www.brickworkratings.com. More detailed information may be provided for a fee. BWR's rating criteria are also generally made available without charge on BWR's website.

This disclaimer forms an integral part of the Ratings Rationales / Rating Reports or other press releases, advisories, communications issued by BWR and circulation of the ratings without this disclaimer is prohibited.

BWR is bound by the Code of Conduct for Credit Rating Agencies issued by the Securities and Exchange Board of India and is governed by the applicable regulations issued by the Securities and Exchange Board of India as amended from time to time.