ICRA Nepal assigned Ratings to four big industries with negative implications

ICRA Nepal has placed  the  ratings assigned to  bank  loan  limits of big industries like Goyal Ispat Private Limited, Laxmi Steel Private Limited, Pathibhara  Steel  Industries  Private  limited and Siddhi Laxmi SteelsPrivate Limited with negative implications.

Goyal Ispat Private Limited

About the company

Established in 2018 and promoted by the Rajesh Hardware Group, Goyal Ispat Private Limited (GIPL) is a closely held company. GIPL’s Group entities—Rajesh Hardware and Siddhartha Hardware—hold 70% and 15% stakes in the company, respectively,while the balance 15% being held by Mrs. Suman Agarwal. Mr. Sushil Agarwal is the chairman and managing director of the company.

GIPL is setting up a factory for manufacturing black pipes and steel sections with an installed production capacity of ~72K metric tonne each. The production facility will use imported HR/CR sheets and steel billets to produce the finished goods. GIPL’s production facility, which is in the Ramgram Municipality of Nawalparasi,is in the final stage of commissioning and is expected to commence operations from mid-January 2020. A major portion of GIPL’s produce is expected to be sold through the trading arms of the Group,viz. Rajesh Hardware and Siddhartha Hardware,which are also the flagship entities of the Group.

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Laxmi Steels Private Limited

About the company

Laxmi Steels Private Limited (LSPL) is one of the largest and established players in the iron and steel products manufacturing industry. It was set up in 2008 as a private limited company. It is owned by the Neupane and Agrawal families under the common group name –Saurabh Group. Both promoter groups belong to reputed business houses in Nepal with stakes in different sectors. LSPL is a secondary steel manufacturer that produces TMT bars, ribbed wire,and binding wire, all under the brand Laxmi Steels. Its raw materials, mainly iron billets, are imported from primary steel manufacturers in India. The company also has an in-house capacity for producing billets/ingots that currently meets ~5% of the total raw material requirement. Soon, LSPL plans to increase the capacity of in-house billet production to meet a larger proportion of its production requirements.

LSPL currently has an annual installed production capacity of ~2,00,000 metric tonnes for TMT bars and ribbed wire with ~50% capacity utilisation in FY2019.

The company is jointly held by the Neupane and Agarwal families. The Neupane family (through Mr. Tikaram Neupane, Mr. Ankur Neupane and Mr. Bishnu Prasad Neupane) holds a ~65% stake,while the Agarwal family (through Mrs. Mina Kumari Agarwal and Mrs. Neha Kumari Agrawal) holds the balance. Mr. Tikaram Neupane is the Managing Director of the company.

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Pathibhara Steel Industries Private Limited

About the company

Pathibhara Steel Industries Private Limited (PSI) was incorporated in December 2012 as a partnership firm with six individual partners. The firm was converted into a private limited company on July 15, 2018,with the same set of partners as shareholders. As of mid-July 2018, major promoters of PSI included Mr. Arjun Mainali, Mr. Kapil Bimali, Mr. Manorath Bhetwal, Mr. Hem Raj Sangraula and Mr. Om Prakash Bimali.

PSI is involved in iron and steel processing and trading activities since 2013. PSI’s rolling mill operation started in 2013 with an installed capacity of 10 metric tonnesper day (MTPD). Back then, PSI manufactured steel sections from locally purchased steel byproducts in its plant at Birtamode, Jhapa district. PSI replaced the old plant with a higher capacity plant in Q1 FY2018. The company started producing TMT bars (8-20 mm in diameter)from Q4 FY2018,after obtaining Nepal Quality Standard (NS) in June 2018. At present, the manufacturing portfolio of PSI comprises TMT bars (under the brand name of PSI TMT) and steel sections, using billets imported from vendors in Durgapur, West Bengal. The current installed capacity of the rolling mill is ~70,000 metric tonnes per annum (MTPA).

PSI also has a trading portfolio,which comprises iron angles and mild steel (MS) wires (with simple processing). Steel wire processing commenced in H2 FY2019. The installed processing capacity of MS wire is ~13,000 MTPA2.PSI’s customer base mostly includes individual end users in and around Jhapa district, where the key promoters have established reputation. PSI uses its supply chain of wholesale/retail trading units in the region to market its products.

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Siddhi Laxmi SteelsPrivate Limited

About the company

Promoted by the Laxmi Group, Siddhi Laxmi Steels Private Limited was established in 2017 as a private limited company. It is a family-owned business, with Mr. Ganesh Bahadur Shrestha and his three sons, Mr. Anjan Shrestha, Mr. Nirakar Shrestha and Mr. Niranjan Shrestha, holding the entire equity stake (through Laxmi Holding Private Limited, an SPV).

SLS has setup a rolling mill for manufacturing TMT steel bars (under the brand name ‘Samriddhi Steels’) using billets that are mainly imported from India. With an annual installed production capacity of ~200K metric tonne (MT), the factory is located in the Ramgram Municipality of Nawalparasi. The overall plant was set up with an estimated total project cost is ~NPR 1,642 million (~NPR 1,350 earmarked for TMT line) out of which NPR 1,260 million was debt funded (~NPR 1,000 million earmarked for TMT line) and the rest equity funded. SLS is in commercial operation since October 2019.

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Source: www.icranepal.com