The agency has also upgraded the company’s short-term rating to 'IND A1+’ from ‘IND A1’.
In its rating rationale, India Ratings said that the upgrade reflects a notable improvement in the consolidated credit profile, following a qualified institutional placement (QIP) in October 2024.
The company raised Rs 500.79 crore in equity, with an aim to strengthen its financial position and operational capabilities. A majority of these funds have been used to prepay long-term debt obligations of HTPL and its subsidiaries, as well as to reduce working capital borrowings, resulting in a robust liquidity position. The remaining proceeds are designated for capex purpose.
Operationally, HTPL demonstrated healthy volume growth, supported by healthy offtake from its Sanand unit-II (phase-I).
The upgrade also factors in a likely improvement in HTPL’s business profile over the medium term, driven by sustained demand for its existing products, consistent offtake from the recently completed capex and likely volume growth following the completion of ongoing projects.
India Ratings expects the profitability to improve over the medium term, aided by a growing share of value-added products, economies of scale, and cost-efficiency measures; although, remain range bound.
The ratings are further bolstered by company’s diversified product portfolio and low customer concentration risk. However, the ratings are constrained by HTPL’s susceptibility to raw material price volatility and intense market competition.
Hi-Tech Pipes manufactures steel tubes and pipes, galvanised and corrugated sheets, cold-rolled products, and colour-coated sheets. It has an installed capacity of a total of 7,40,000 MT across its manufacturing plants.