Steel Authority of India Ltd (SAIL) informed exchanges on September 3, 2026, through a BSE filing that India Ratings and Research had upgraded its long-term issuer rating and debt instruments to IND AA+/Stable from IND AA. The rating agency also affirmed the steelmaker's commercial paper rating at IND A1+.

The rating actions cover SAIL's bank loan facilities of INR220 billion, commercial paper of INR80 billion and public deposits of INR10 billion. The long-term rating on the bank facilities was upgraded while the short-term rating was affirmed. Ratings on bonds that had been paid in full were withdrawn.

Operating performance and debt reduction support upgrade

India Ratings said the upgrade reflects improved operating performance during FY26 and the first quarter of FY27, supported by higher sales volumes and lower production costs. Better raw-material consumption, coke rate, blast-furnace productivity and captive iron-ore consumption contributed to the improvement.

SAIL's sales volume rose to about 19.9 million tonnes in FY26 from 17.9 million tonnes in FY25. Revenue increased 8% to INR1,108 billion, while absolute EBITDA rose 13% to INR120 billion. In the first quarter of FY27, EBITDA stood at INR42 billion with a margin of 15.8%.

Consolidated net adjusted debt declined to INR357 billion in FY26 from INR414 billion in FY25, aided by lower inventory and receivables. Net adjusted leverage consequently fell to 2.97 times from 3.89 times.

Capex and steel-cycle risks remain under watch

The agency said SAIL's ratings continue to reflect its strong business profile, government support and moderate credit profile. The Government of India held a 65% stake in the Maharatna public-sector company as of March 2026.

India Ratings identified several factors that will remain under review:

  • SAIL plans capital expenditure and debottlenecking projects of around INR1,000 billion over FY27-FY31.
  • Net adjusted leverage could rise to 3.5-4.0 times during the peak capex phase spanning FY28-FY30.
  • Delays in capacity ramp-up, weaker-than-expected EBITDA per tonne or a longer working-capital cycle could pressure credit ratios.
  • Steel-industry cyclicality, volatile coking-coal prices and mining-related regulatory changes remain risks.

Liquidity was assessed as adequate. India Ratings expects operating cash flow to remain positive in FY27 and said liquidity should be sufficient to meet funding requirements over FY27-FY28.

Source: BSE corporate announcement.