MMTC Limited
MMTC Limited
MMTC Limited
MMTC Limited
June 14, 2024
Amount
Facilities/Instruments Rating1 Rating Action
(₹ crore)
CARE D; ISSUER NOT Rating continues to remain under
Long term bank facilities 1,055.00
COOPERATING* ISSUER NOT COOPERATING category
Long term / Short term bank CARE D / CARE D; ISSUER Rating continues to remain under
5,323.00
Facilities NOT COOPERATING* ISSUER NOT COOPERATING category
CARE D; ISSUER NOT Rating continues to remain under
Short term bank facilities 2,500.00
COOPERATING* ISSUER NOT COOPERATING category
Details of instruments/facilities in Annexure-1.
*Issuer did not cooperate; based on best available information.
Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution
while using above rating(s)
Key weakness
High group exposure Neelachal Ispat Nigam Limited leading to moderation in financial & liquidity profile of MMTC:
The Cabinet Committee on Economic Affairs (CCEA) had given an ‘in-principle’ approval for strategic disinvestment of 100% equity
of Neelachal Ispat Nigam Limited in January 2020. As per BSE announcement dated Feb 01, 2022, strategic buyer has been
approved for privatization of Neelachal Ispat Nigam Limited. The highest bidder i.e. M/s Tata Steel Long Products Limited (TSPL)
for 93.71% of shares of Joint Venture partners of 4 CPSEs and 2 Odisha Govt State PSEs has been approved at the Bid Enterprise
Value of Rs. 12,100 cr.
In July 2022, Tata Steel Long Products Limited (‘TSLP’), a subsidiary of Tata Steel, has completed the acquisition of 93.71% in 1
million tons per annum ‘NINL’ from MMTC Ltd., NMDC Ltd., MECON Ltd., Bharat Heavy Electricals Ltd., Industrial Promotion and
Investment Corporation of Odisha Ltd., Odisha Mining Corporation Ltd., President of India, Government of Odisha. The acquisition
has been completed as per the terms and conditions of the Share Sale and Purchase Agreement entered on March 10, 2022, and
in accordance with the process being run by Department of Disinvestment & Public Asset Management (DIPAM). The aggregate
consideration which has been paid out by TSLP is Rs. 12,100 crores.
Accordingly, all the principal payment of the bank debt has been paid however there are ongoing discussions for waiver of penal
interest and other charges.
Key strength
MMTC’s position as India’s largest international trading house and established track record of trading in diverse
commodities
1
Complete definition of the ratings assigned are available at www.careedge.in and other CARE Ratings Ltd.’s publications
As apprised by the company management, there are no business operations in MMTC currently and the final announcement on
its closure of operations is awaited.
Applicable criteria
Policy on Default Recognition
Policy in respect of non-cooperation by issuers
Rating Outlook and Rating Watch
Factoring Linkages Government Support
Financial Ratios – Non financial Sector
Short Term Instruments
Liquidity Analysis of Non-Financial Sector entities
Industry classification
Macro Economic Sector Industry Basic Industry
Indicator
Services Services Commercial Services & Supplies Trading & Distributors
MMTC, a public sector undertaking, was incorporated on September 26, 1963, to facilitate foreign trade in India and canalize the
export and import of essential minerals and metals. It is under the administrative control of the Ministry of Commerce & Industry,
and Government of India (GOI) held 89.93% stake in the company as on March 31, 2024. MMTC deals in multiple products and
markets. The business operations of the company span across six major divisions i.e. minerals, metals, precious metals, agro
products, fertilizers & chemicals and coal & hydrocarbons.
272.55 5.34
Total operating income
-121.54 -162.55
PBILDT
1,076.07 68.21
PAT
0.04 0.00
Overall gearing (times)
-1.08 -232.21
Interest coverage (times)
A: Audited UA: Unaudited; Note: ‘the above results are latest financial results available’
3)CARE D (CW
with Positive
Implications)
(06-Apr-22)
1)CARE D;
ISSUER NOT
COOPERATING
CARE D;
Fund-based - ST- * 1)CARE D
ISSUER NOT
2 Working Capital ST 1760.00 - - (16-Mar-23) (05-Apr-
COOPERATING
Demand loan 21)
*
2)CARE D
(RWP)
(27-Dec-22)
3)CARE D (CW
with Positive
Implications)
(06-Apr-22)
1)CARE D /
CARE D;
ISSUER NOT
COOPERATING
*
(16-Mar-23)
CARE D / CARE
D; ISSUER 1)CARE D
Non-fund-based - LT/S 2)CARE D /
3 5323.00 NOT - - (05-Apr-
LT/ ST-BG/LC T CARE D (RWP)
COOPERATING 21)
(27-Dec-22)
*
3)CARE D /
CARE D (CW
with Positive
Implications)
(06-Apr-22)
1)CARE D;
ISSUER NOT
COOPERATING
*
(16-Mar-23)
CARE D;
Fund-based - ST- 1)CARE D
ISSUER NOT 2)CARE D
4 Working Capital ST 740.00 - - (05-Apr-
COOPERATING (RWP)
Demand loan 21)
* (27-Dec-22)
3)CARE D (CW
with Positive
Implications)
(06-Apr-22)
1)CARE D;
ISSUER NOT
COOPERATING
*
(16-Mar-23)
CARE D;
1)CARE D
Fund-based - LT- ISSUER NOT 2)CARE D
5 LT 200.00 - - (05-Apr-
Term Loan COOPERATING (RWP)
21)
* (27-Dec-22)
3)CARE D (CW
with Positive
Implications)
(06-Apr-22)
*Issuer did not cooperate; based on best available information.
LT: Long term; ST: Short term; LT/ST: Long term/Short term
Note on the complexity levels of the rated instruments: CARE Ratings has classified instruments rated by it on the basis
of complexity. Investors/market intermediaries/regulators or others are welcome to write to [email protected] for any
clarifications.
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Established in 1993, CARE Ratings is one of the leading credit rating agencies in India. Registered under the Securities and
Exchange Board of India, it has been acknowledged as an External Credit Assessment Institution by the RBI. With an equitable
position in the Indian capital market, CARE Ratings provides a wide array of credit rating services that help corporates raise capital
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and capital market instruments, including commercial papers, corporate bonds and debentures, and structured credit.
Disclaimer:
The ratings issued by CARE Ratings are opinions on the likelihood of timely payment of the obligations under the rated instrument and are not recommendations to
sanction, renew, disburse, or recall the concerned bank facilities or to buy, sell, or hold any security. These ratings do not convey suitability or price for the investor.
The agency does not constitute an audit on the rated entity. CARE Ratings has based its ratings/outlook based on information obtained from reliable and credible
sources. CARE Ratings does not, however, guarantee the accuracy, adequacy, or completeness of any information and is not responsible for any errors or omissions
and the results obtained from the use of such information. Most entities whose bank facilities/instruments are rated by CARE Ratings have paid a credit rating fee,
based on the amount and type of bank facilities/instruments. CARE Ratings or its subsidiaries/associates may also be involved with other commercial transactions with
the entity. In case of partnership/proprietary concerns, the rating/outlook assigned by CARE Ratings is, inter-alia, based on the capital deployed by the
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in by the partners/proprietors in addition to the financial performance and other relevant factors. CARE Ratings is not responsible for any errors and states that it has
no financial liability whatsoever to the users of the ratings of CARE Ratings. The ratings of CARE Ratings do not factor in any rating-related trigger clauses as per the
terms of the facilities/instruments, which may involve acceleration of payments in case of rating downgrades. However, if any such clauses are introduced and
triggered, the ratings may see volatility and sharp downgrades.