Shri Ambey Steel Industries

Brickwork Ratings assigns the long term rating of BWR BBB with Stable outlook and a short term rating of BWR A3+ for the Bank Loan Facilities of Rs. 143.33 Crs. of Shri Ambey Steel Industries

Particulars

Facilities**	Amount(Rs.Crs.)	Tenure	Rating#
Fund Based	143.33	Long Term	BWR BBB /Stable Assignment
	(24.00)
	(25.00)
Non Fund Based	(10.00)	Short Term	BWR A3 + Assignment
	(10.00)
Grand Total	143.33	(Rupees One Hundred Forty Three Crores and Thirty Three 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) assigns the long-term rating at BWR BBB with a Stable outlook and a short term rating of A3+ for the bank loan facilities of  Shri Ambey Steel Industries (SASI).

The rating reflects SASI's strong operating performance over the past three fiscals alongside its healthy FY26 provisional results, heavily driven by strong market demand. This performance is sustained by an established regional presence, an experienced promoter team with over two decades of industry expertise, an extensive operating track record, and a diversified steel product portfolio. Market demand in India's value-added downstream steel sectors is transforming, with the high-margin Electric Resistance Welded (ERW) Pipe and Flat Steel (Graded Flats) markets projected to grow at a strong CAGR of 7.41% to 7.80%. SASI is strategically positioned to capture this demand shift via its ongoing Rs.30.00 crore capital expenditure for a new rolling mill, scheduled for commercial commissioning by October 2026. Furthermore, the firm maintains a strong financial risk profile characterized by well-managed external debt and comfortable coverage metrics. While the absolute Debt-to-Networth ratio was recorded at 5.00x over the past two years, the adjusted Debt-to-Networth ratio remains  acceptable levels of 1.67x, factoring in the bank-subordinated unsecured loans of Rs.43.19 crore that are legally contracted to remain in the business. Profitability indicators remain adequate, supported by a steady PBILDT profile of Rs.30.00 crore and a comfortable Interest Service Coverage Ratio (ISCR) of 2.05x.  SASI's liquidity cushion remains adequate, supported by its expanding scale of operations and disciplined management of its fund-based lines, which are utilized at a historical average of 90%, with short-term asset coverage remaining comfortable as evidenced by a stable Current Ratio of 1.34x as of March 31, 2026 (Provisional). 

The rating, however, is constrained by the susceptibility of margins to fluctuations in raw material prices as it will have a direct impact on the pricing of the products. The rating also factors in the impact on the Company's revenue resulting from the intense competition from many organised and unorganised players in the market.

The Stable outlook on the BWR BBB rating reflects BWR opinion that  the financial risk profile of SASI is expected to be maintained over the medium term, given steady revenues backed by the healthy order book position and that it will continue to maintain its comfortable capital structure and healthy debt coverage indicators.

KEY RATING DRIVERS

Credit Strengths:

• Established Market Position and Experienced Directors :

  The management is spearheaded by Sushil Bansal, a graduate with over twenty years of experience in the steel sector gained through this entity and various family-run businesses. He is supported by the rest of the partner management team, each bringing up to two decades of industry experience. This combined expertise provides the firm with deep technical know-how and a strong understanding of evolving market dynamics, positioning it well for long-term growth. The promoter’s rich experience has enabled the company to establish healthy relationships with various reputed customers and suppliers.  The Company has been able to build and sustain strong relations spread over the past several years with many large national  players.

• Diversified product portfolio along with strategic plant location : :

  Transitioning into a manufacturing-heavy framework by commissioning the new structural rolling mill alongside its established ERW Pipe facility has granted SASI a highly diversified product portfolio. Instead of relying on a single commodity or thin trading spreads, SASI  will have a product baseline spanning ERW Pipes, MS flats, channels, angles, and MS billets.  Also, SASI is situated right next to the Mandi Gobindgarh-Khanna industrial corridor. This region hosts the highest density of induction furnaces, scrap yards, and secondary re-rolling units in North India. This local density gives SASI immediate, low-freight access to essential intermediate feedstock like scrap steel and raw billets to keep its manufacturing operations running seamlessly.

• Comfortable financial risk profile : :

  SASI exhibits a steady and improving financial risk profile, anchored by a significant operational transition that has structurally enhanced its cash generation capabilities. With the successful stabilization of its high-capacity manufacturing lines and with the new rolling mill which is expected to begin its operation in October, the company’s operating profitability is expanding. The financial risk profile is expected to be maintained over the medium term .   The debt protection metrics are at comfortable levels. Liquidity also remained adequate with sufficient cushion in the current working capital limits.  BWR expects the capital structure to remain comfortable going forward as well supported by the projected healthy cash accruals.

• Entity Constitution :

  SASI is transitioning into a private limited company under the approved name "Shri Ambey Steel Industries Pvt. Ltd." and has received its new TAN card. This shift significantly mitigates the structural and legal risks associated with partnership firms.

Credit Risks:

• Margin susceptible to Fluctuation in Raw Material Prices : :

  SASI's financial profile is vulnerable to sharp fluctuations in raw material prices, as input procurement consumes approximately 96% of its Total Operating Income (TOI).Operating within an intensely competitive and fragmented downstream steel and pipe market, the firm possesses limited initial bargaining power and faces a natural time lag when passing sudden, aggressive commodity cost escalations down to its clients.To counter input volatility, SASI is strategically pivoting into the production of Graded Flats and expanding its ERW Pipe manufacturing capacity. These advanced, high-margin downstream products provide the company with enhanced pricing flexibility and a structural cushion to absorb raw material price shocks far more effectively than commodity-grade billets.

• High Competition : :

   SASI operates within the highly competitive secondary steel, structural rolling, and pipe manufacturing sectors, facing intense pressure from both primary integrated giants and unorganized regional players. To mitigate local price undercutting, SASI has secured a decisive operational cost cushion by signing a long-term Power Purchase Agreement (PPA) that materially reduces its power tariff, whereas unorganized regional competitors remain heavily exposed to volatile grid rates. Also the company's focus on specialized, value-added downstream products commands superior institutional client stickiness and insulates its order book from low-margin regional price wars.

ANALYTICAL APPROACH - Standalone

BWR has adopted a Standalone approach while arriving at its ratings.

RATING SENSITIVITIES

Positive

• Revenue , EBITDA and PAT to be in excess of the projected amount of Rs.707.00 Crs , Rs. 33.90 Crs and PAT of Rs. 7.21 Crs respectively, by a minimum of 10% with improvement in the OPM and NPM margins.
• DSCR to be maintained at levels of 1.50x and above.
• Current Ratio to be maintained at levels of 1.50x and above .
• Leverage ratios to be brought down to 1.25x.

Negative:

•  Lower than projected revenue of 25% and profitability of 20% resulting in stretched liquidity.
•  ISCR of below 1.50x and DSCR of below 1.10x on a sustained basis.
•  Decline in capital structure.
• The  non completion of the constitution of firm to Company during the current financial year.

LIQUIDITY INDICATORS - Adequate

The Company has adequate liquidity characterized by sufficient cushion in accruals vis-a-vis repayment obligations and moderate cash balance of Rs.8.40 Crore as of 31 March 2026(Provisional).  The Company's bank limits are utilized to the extent of 90% and has un-utilized funded working capital limits for its operational requirements supported by current ratio of 1.34 x as of 31 March 2026(Provisional). The firm strategically utilizes a temporary overdraft (OD) facility to bridge the operational cash flow mismatches. SASI has demonstrated disciplined financial credit habits by consistently liquidating these temporary limits on time. Due to this exemplary debt-servicing behavior, lenders continue to provide flexible, timely, and extended credit support to accommodate the firm's ongoing operational requirements. During FY26(Provisionals), healthy cash accruals of Rs. 17.57  Crs were generated by the company  adequate to cover the upcoming debt obligations of Rs.7.50 Crs . The Current ratio is expected to remain at existing levels thus demonstrating adequate liquidity.

 

ABOUT THE ENTITY

Established in November 2017 as a partnership firm, Khanna-based (Punjab) SASI initially focused on scrap trading. The firm expanded into manufacturing in 2018, officially commencing commercial operations in April 2019. SASI is currently managed by partners Sushil Bansal, Puneet Jaidka, Sumit Garg, Ajay Bansal, Harsh Bansal, and Munish Goyal.Based in Khanna, Punjab, the firm manufactures a diverse range of steel products, such as MS billets, HR Coils, and ERW pipes, with a total annual installed capacity of 1,89,400 MT as of March 31, 2025.

ESG Profile

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

Environmental:   As a steel manufacturer operating induction furnaces and rolling mills for MS Billets and ERW pipes, SASI naturally functions within a sector characterized by high energy intensity, substantial carbon emissions, and industrial waste generation. The company has signed a strategic Power Purchase Agreement (PPA) with two private producers under a Punjab Government scheme.   Beyond immediate cost-efficiency, this PPA establishes a structured framework that enables the company to track energy consumption, audit efficiency, and potentially integrate cleaner energy mixes over time.

Social:  Leveraging the promoters’ 20+ years of industry presence, SASI maintains strong roots in the Khanna (Punjab) industrial cluster, actively supporting and sustaining local employment.  The firm strictly adheres to applicable labor laws and statutory workplace regulations. SASI focuses heavily on robust accident prevention frameworks, safety performance monitoring, and proactive human capital development.  Regular training initiatives are implemented to enhance technical skills and maintain high safety standards across heavy industrial operations.

Governance:  Traditional partnership frameworks inherently carry higher transparency risks, unlimited liability exposures, and a lack of formalized independent board oversight. SASI's ongoing conversion into a Private Limited entity fundamentally addresses these structural gaps. The new corporate structure legally mandates stricter auditing frameworks, formalized board compositions, and robust internal compliance controls.  This corporate transition ensures highly structured financial reporting, significantly enhancing transparency and building strong credit confidence among lenders and stakeholders.

 

KEY FINANCIAL INDICATORS (Standalone)

Key Parameters	Units	FY 23 - 24 (Audited)	FY 24 - 25 (Audited)	FY 25 - 26 (Provisional)
Operating Revenue	Rs.Crs.	517.23	694.37	649.37
EBITDA	Rs.Crs.	24.85	29.91	29.98
PAT	Rs.Crs.	5.05	5.25	6.49
Tangible Net Worth	Rs.Crs.	25.61	29.60	34.51
Total Debt / Tangible Net Worth	Times	4.56	4.75	5.00
Current Ratio	Times	1.41	1.27	1.34

KEY COVENANTS OF THE FACILITY RATED

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

YES Bank financial covenants 

• DSCR => 1.2x
• TOL/(Promoter Funds) =< 3.5x
• CR => 1.2x

STATUS OF NON-COOPERATION WITH PREVIOUS CRA

Not Applicable

RATING HISTORY FOR LAST 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	143.33	BWR BBB/Stable (Assignment)	NA	NA	NA	NA	NA	NA
FB SubLimit	LT	(24.00)	BWR BBB/Stable (Assignment)	NA	NA	NA	NA	NA	NA
		(25.00)	BWR BBB/Stable (Assignment)	NA	NA	NA	NA	NA	NA
NFB SubLimit	ST	(10.00)	BWR A3+ (Assignment)	NA	NA	NA	NA	NA	NA
		(10.00)	BWR A3+ (Assignment)	NA	NA	NA	NA	NA	NA
Grand Total		143.33	(Rupees One Hundred Forty Three Crores and Thirty Three lakhs Only)

Hyperlink/Reference to applicable Criteria

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

Analytical Contacts
Deepthi Nair Rating Analyst deepthinair.v@brickworkratings.com	Suryanarayan N Associate Director - Ratings suryanarayan.n@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	Axis Bank Ltd.	Term Loan - Sanctioned	22.50	_	22.50	Simple##
2	Axis Bank Ltd.	Cash Credit - Sanctioned	2.50	_	2.50	Simple##
3	Kotak Mahindra Bank	Cash Credit - Sanctioned	30.00	_	30.00	Simple##
	Sub-Limit (WCDL) - Sanctioned	(24.00)
4	Punjab National Bank	Term Loan - Out-standing	21.02	_	21.02	Simple##
5	Punjab National Bank	Cash Credit - Sanctioned	42.00	_	42.00	Simple##
6	Punjab National Bank	GECL - Out-standing	0.31	_	0.31	Simple##
7	Yes Bank	Cash Credit - Sanctioned	25.00	_	25.00	Simple##
	Sub-Limit (LC) - Sanctioned		(10.00)
	Sub-Limit (Usance LC) - Sanctioned		(10.00)
	Sub-Limit (WCDL) - Sanctioned	(25.00)
Total			143.33	0.00	143.33
TOTAL (Rupees One Hundred Forty Three Crores and Thirty Three 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.