CARE Nepal assigns B+ and A4 to long term and short term bank facilities of Real Steels Pvt. Ltd.

CARE Ratings Nepal Limited (CRNL) has reaffirmed rating of ‘CARE-NP B +’ assigned to the long term bank facilities and ‘CARE-NP A4’ assigned to the short term bank facilities of Real Steels Private Limited (RSPL). 

Key Rating Weakness

• Funding risk of the project as the financial closure not achieved for the revised project cost
• Project implementation risk - delay in execution of project and cost overrun
• Raw material price volatility risk and foreign exchange fluctuation risk
• Expected exposure to risk of volatile interest rates
• Presence in highly fragmented and competitive nature of steel industry

Key Rating Strength

• Experienced promoters and management in the related field
• Demand of steels products in the country
• Locational advantage and scope of export
• Product diversification

About the Company

RSPL is a private limited company promoted by traders and businessmen from Birgunj mainly engaged in trading businesses for setting up of MS Steel Pipe plant in Parsa district of Nepal. The project is located at Bagahi-28, Birgunj of Nepal with expected operation date of November 2019. The company will manufacture

MS Pipes, Shutter Patti, Shutter Guide and other related products with annual production capacity of 30,000 tons of MS Pipes, 15,000 tons of Shutter Patti, 9,000 tons of Shutter Guide and 9,000 tons of Hot Rolled Coil (HRC) and Cold Rolled Coil (CRC) per year. Promoters of RSPL had infused Rs.71.65 Mn equity capital till July 16, 2019 towards the project execution.

Details of the Facilities

Source: CARE Ratings Nepal