RATING RATIONALE
11May2026
Sapcon Steels Pvt. Ltd
Brickwork Ratings reaffirms the long-term ratings at BWR BBB-/Stable & short term ratings at BWR A3 for the Bank Loan Facilities of Rs. 78.00 Crs. of Sapcon Steels Pvt. Ltd
Particulars| Facilities** | Amount (Rs.Crs.) | Tenure | Rating# | ||
|---|---|---|---|---|---|
| Previous | Present | Previous (10 Apr 2025) |
Present | ||
| Fund Based | 54.00 | 74.00 | Long Term |
BWR BBB- /Stable
Reaffirmation |
BWR BBB -
/Stable Reaffirmation |
| Non Fund Based | 4.00 | 4.00 | Short Term |
BWR A3
Reaffirmation |
BWR A3
Reaffirmation |
| Grand Total | 58.00 | 78.00 | (Rupees Seventy Eight Crores Only) | ||
**Details of Bank Loan facilities,consolidation or instruments are provided in Annexure
RATING ACTION / OUTLOOK
Brickwork Ratings has reaffirmed the long-term rating at BWR BBB-/Stable & short term ratings at BWR A3 for the bank loan facilities of Sapcon Steels Pvt Ltd for Rs.78.00 crore.
The reaffirmation factors in the company’s experienced promoters, moderate financial risk profile, adequate liquidity position, Strong Supplier Base and Reputed Clientele, and Adequate liquidity position. However, the rating remains constrained by Cyclicality in the steel industry & intense industry competition.
The Stable outlook reflects BWR’s expectation that the company’s business risk profile will remain steady over the medium term, indicating a low probability of a rating change in the near to medium term.
For arriving at the rating, BWR has considered the company’s last three years' audited financial statements up to FY25, provisional financials for FY26, projected financials for FY27 and FY28, along with publicly available information and clarifications provided by the management.
KEY RATING DRIVERSCredit Strengths:
-
Widely experienced directors and Long Operational Track Record :
The promoters of the company have been in the trading of iron and steel industry for many decades and have established healthy relationships with clients leading to repeat orders. Mr. Swatantar Aggarwal is a managing director of the company involved in overall business activities and financial aspects of the group since more than five decades. Further, Mr Sanjay Aggarwal and Mr. Ajay Aggarwal (for more than 3 decades); Mr Vineet Aggarwal, Mr Pankaj Aggarwal and Mr Nitin Aggarwal (from past 2 decades) are involved in the business activities of the group. Mr Anuj Aggarwal and Mr Kanav Aggarwal have been associated with the business for more than a decade, Mr Parth Aggarwal since 7 years and Ms. Usha Rani has bee associated with the business for more than five decades. Thus, the above mentioned facts clearly reflects availability of succession plan also and professional management in place. Being incorporated in July 1992, the company has a long and successful operational track record of operations. Further, the company is planning to open more branches.
-
Strong Supplier Base and Reputed Clientele :
SSPL has an authorised dealership of reputed industry major companies such as Steel Authority of India (SAIL), Jindal Steel & Power Ltd., Arcelor Mittal Nippon Steel India Ltd. etc. Further, the company is dealing with major clients pan India, including various infrastructure companies for turnkey project supplies, such as Dilip Buildcon Ltd., KEC International Ltd., ITD Cementation Ltd. etc.
-
Steady Growth in operations and Moderate Financial risk Profile :
Company booked an operating income of Rs.1154.45 Crs in FY25 (A) (FY26: Rs. 1255.51 Crs).The Tangible Net Worth of the company has increased from Rs.53.90 Crs in FY25 to Rs.68.14 Crs in FY26. Current ratio stood at a moderate 1.48x along with healthy ISCR and DSCR of 1.61x & 2.09x respectively.
-
Adequate liquidity position :
The company has cash and bank balances of Rs. 0.09 Crs as on March 31, 2025 (Aud.) and Rs.0.29 Crs in FY26(Prov). The current ratio of the company stood comfortable at 1.69 times in FY25 and 1.48 times in FY26(Prov) .The working capital cycle of the company stood comfortable at 31 days as on March 31, 2026 (Prov). The company has average utilisation of 77.85% for CC of J&K bank for last 12 months, 80.70% for CC of HDFC bank for last 12 months and 96.70% for CC of SBI bank for last 12 months. The company has long term borrowing of 6.46 Crs. as on March 31, 2025 (Aud.) which comprises of only unsecured loans from directors. The CPLTD stood Nil as on March 31, 2026 (Prov). ISCR and DSCR are at a comfortable level at 1.61x and 2.09x in FY26 Prov.
-
Intense Competition :
The steel industry is highly fragmented and there is significant competition among players; as a result, their bargaining power is moderate and thus, resulting in thin profit margins. The same can be observed by low profitability margins of SSPL.
-
Cyclicality in steel industry :
The steel industry is highly cyclical in nature and is correlated with economic development, which directly affects its fortunes. This is the inherent risk of the steel industry.
For arriving at its ratings, BWR has considered the standalone performance of Sapcon Steels Pvt. Ltd. BWR has applied its rating methodology as detailed in the Rating Criteria (hyperlinks provided at the end of this rationale).
RATING SENSITIVITIES
Going forward, the ability of the company to improve its revenues and financial risk profile would remain the key rating sensitivities.
Positive: Rating may be upgraded in case of substantial improvement in TOI above Rs. 1325 Crs and net profit margin above 1.00%, along with a significant and sustained increase in TNW above Rs.79.50 Crs
Negative: Rating may be downgraded in case there is a deterioration in the financial risk profile and liquidity position of the company, along with a decline in revenue of the company below Rs.1250.00 Crs and a drop in net profit margins below 0.67%, along with a weakening of liquidity ratios.
The company has cash and bank balances of Rs. 0.09 Crs as on March 31, 2025 (Aud.) and Rs.0.29 Crs in FY26(Prov). The current ratio of the company stood comfortable at 1.69 times in FY25 and 1.48 times in FY26(Prov) .The working capital cycle of the company stood comfortable at 31 days as on March 31, 2026 (Prov). The company has average utilisation of 77.85% for CC of J&K bank for last 12 months, 80.70% for CC of HDFC bank for last 12 months and 96.70% for CC of SBI bank for last 12 months. The company has long term borrowing of 6.46 Crs. as on March 31, 2025 (Aud.) which comprises of only unsecured loans from directors. The CPLTD stood Nil as on March 31, 2026 (Prov). ISCR and DSCR are at a comfortable level at 1.61x and 2.09x in FY26 Prov.
ABOUT THE ENTITY| Macro Economic Indicator | Sector | Industry | Basic Industry |
|---|---|---|---|
| Commodities | Metals & Mining | Metals & Minerals Trading | Trading - Metals |
Sapcon Steels Pvt. Ltd. (SSPL) is a Jammu based company incorporated in July, 1992, with its head office in Jammu and has currently branch offices in Jalandhar , Chandigarh, Ludhiana, New Delhi, Srinagar, Dehradun, Lucknow and Hyderabad. The company was promoted by Mr. Sanjay Aggarwal, Mr. Swatantar Aggarwal, Mr. Bhimsen Aggarwal and Mr. Ajay Aggarwal. SSPL is engaged in wholesale trading of Iron & Steel products and building material viz. Rods, Tars, Angles, Channels, Beams, Plates and Flats. It has an authorized dealership of reputed industry major companies such as, Steel Authority of India (SAIL), Jindal Steel & Power Ltd., TATA Steel, VIZAG Steel, Arcelor Mittal Nippon Steel India Ltd. etc. Further, the company is dealing with major clients and various infrastructure companies for turnkey project supplies, such as Dilip Buildcon Ltd., KEC International Ltd., ITD Cementation Ltd. etc.
Company has supplied its product to some of the important turnkey projects such as Mumbai Metro (Maharashtra), Ultra Super Critical Power Plant, Godda (Jharkhand), LNJP Hospital (Delhi), Delhi Mumbai Expressway (Multistate), Expressways & Highways, Zuari Cable-Stayed Bridge (Goa), Numaligarh Refinery (Assam), Zojila Tunnel (J&K), Patna Airport (Bihar)and IIT Kanpur (Uttar Pradesh).
ESG ProfileThe company demonstrates an Evolving ESG profile based on its environmental, social, and governance practices.
Environmental: Environmental risks in trading companies are primarily related to energy use, emissions from logistics and operations, waste generation, water consumption, and compliance with environmental regulations. Key disclosures include energy usage, waste handling and recycling practices (Not disclosed), and any past violations or penalties Not reported / Not available in public domain.
Social: Social factors focus on labour practices, workforce welfare, diversity and inclusion, training and development, and community engagement. Metrics include workforce composition (% male Not disclosed, % female Not disclosed), employee safety and training programs, adherence to labour laws (Yes – statutory compliance assumed), and initiatives supporting social equity and employee growth.
Governance: Governance assessment emphasizes board structure, independence, and expertise, risk management and compliance frameworks (Basic internal controls; not formally documented), ethical conduct and anti-corruption policies (Not disclosed), stakeholder engagement practices, data security and cybersecurity measures (Not disclosed), and compliance with trading regulations.
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. | 1146.44 | 1154.45 | 1255.51 |
| EBITDA | Rs.Crs. | 13.70 | 13.42 | 15.41 |
| PAT | Rs.Crs. | 7.65 | 7.75 | 11.90 |
| Tangible Net Worth | Rs.Crs. | 46.41 | 53.90 | 68.14 |
| Total Debt / Tangible Net Worth | Times | 0.89 | 0.96 | 1.06 |
| Current Ratio | Times | 1.69 | 1.69 | 1.48 |
The terms of sanction include standard covenants normally stipulated for such facilities.
STATUS OF NON-COOPERATION WITH PREVIOUS CRA
Not Applicable
ANY OTHER INFORMATIONNil.
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 | 74.00 |
BWR BBB-/Stable
(Reaffirmation) |
10Apr2025 |
BWR BBB- Stable
(Reaffirmation) |
20Nov2024 |
BWR BBB- Stable
(removal from ISSUER NOT COOPERATING* category/Upgraded) |
29Aug2023 |
BWR BB Stable
(ISSUER NOT COOPERATING* /Downgrade) |
| Non Fund Based | ST | 4.00 |
BWR A3
(Reaffirmation) |
10Apr2025 |
BWR A3
(Reaffirmation) |
20Nov2024 |
BWR A3
(removal from ISSUER NOT COOPERATING* category/Upgraded) |
29Aug2023 |
BWR A4
(ISSUER NOT COOPERATING* /Downgrade) |
| Grand Total | 78.00 | (Rupees Seventy Eight Crores Only) | |||||||
| 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 | HDFC Bank | Cash CreditSanctioned | 40.00 | _ | 40.00 | Simple## |
| 2 | Jammu and Kashmir Bank | Bank GuaranteeSanctioned | _ | 4.00 | 4.00 | Simple## |
| 3 | Jammu and Kashmir Bank | Cash CreditSanctioned | 14.00 | _ | 14.00 | Simple## |
| 4 | State Bank Of India (SBI) | Cash CreditSanctioned | 20.00 | _ | 20.00 | Simple## |
| Total | 74.00 | 4.00 | 78.00 | |||
| TOTAL (Rupees Seventy Eight 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.
| Instrument | Issue Date | Amount (Rs.Crs) | Coupon Rate (%) | Maturity Date | ISIN Particulars | Complexity of the Instrument |
|---|---|---|---|---|---|---|
| Nil | Nil | Nil | Nil | Nil | Nil | Nil |
| Name of Entity | % Ownership | Extent of consolidation | Rationale for consolidation |
|---|---|---|---|
| Nil | Nil | Nil | Nil |
| Instrument / Activity | Regulator |
|---|---|
| Listed/Proposed to be listed bonds/debentures/preference share (all securities) | SEBI |
| Unlisted/Proposed to be unlisted Bonds/Debentures/ Preference share (all securities) | MCA |
Listed PTCs / Securitisation Notes (originated by entities regulated by RBI) 1| SEBI | |
Listed PTCs / Securitisation Notes (originated by entities not regulated by RBI) 1| SEBI | |
Unlisted PTCs / Securitisation Notes (originated by entities regulated by RBI) 1| RBI | |
| Listed Commercial Paper and NCDs with original maturity less than 1 year | RBI |
| Unlisted Commercial Paper and NCDs with original maturity less than 1 year | RBI |
Loan Facilities (Fund/Non-Fund Based) from Bank/NBFCs/NHB/FIs 2| RBI | |
| External Commercial Borrowings and other similar borrowings | RBI |
| Certificates of Deposit | RBI |
| Fixed Deposits raised by NBFC's, Banks, HFCs, Fis | RBI |
| Fixed Deposits raised by corporates other than NBFCs, Banks, HFCs, Fis | MCA |
| Inter Corporate Deposits/Loans extended by Corporates | MCA |
Borrowing programme 3| - | |
Issuer Ratings 4| - | |
| Credit Ratings for Capital Protection Oriented Schemes (by Mutal Funds and AIFs) | SEBI |
| Credit quality ratings (CQRs) for Mutual Fund Schemes and Schemes of AIFs | SEBI |
| Listed Security Receipts | SEBI |
| Unlisted Security Receipts | RBI |
| Independent Credit Evaluation (ICE) | RBI |
| Expected Loss Ratings (for Loan Facilities (Fund/Non-Fund Based) from Bank/NBFCs/NHB/Fis) | RBI |
| Expected Loss Ratings (Listed/Proposed to be listed bonds/debentures/preference share (all securities)) | SEBI |
| Expected Loss Ratings (Unlisted/Proposed to be unlisted Bonds/Debentures/ Preference share (all securities)) | MCA |
Unlisted PTCs / Securitisation Notes (originated by entities not regulated by RBI) 1| Investor-side Regulator | such as IRDAI, PFRDA 5 |
| Monitoring Agency | SEBI |
| Research activities, incidental to rating, such as research for Economy, Industries and Companies 6 | NA |
- Includes securitisation transactions involving assignee payout, acquirer's payout.
- Includes bank facilities such as liquidity facility, second loss facility that are part of securitisation transactions.
- The rated instrument may involve issuance of different instruments such as debt securities (listed or otherwise), bank loans, commercial paper (listed or otherwise), etc. The regulator of the instrument may accordingly be SEBI, RBI or MCA and can only be determined upon issuance. In PRs subsequent to issuance(s), BWR shall separately capture the rated quantum details along with names of respective regulators.
- There is no instrument being rated and hence, Regulator of the Instrument is not applicable.
- These ratings were assigned during regulatory regime prior to the introduction of SEBI CRA Circular dated Feb 10, 2026, and accordingly, investor side regulators have been included.
- Permitted by SEBI vide SEBI Master Circular for CRAs
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