KIOCL Credit Rating Downgraded and Withdrawn by BWR

KIOCL Limited has informed stock exchanges about the downgrade and subsequent withdrawal of its credit ratings by Brickwork Ratings India Private Limited (BWR). The rating agency reviewed the company's bank loan facilities totaling ₹1,050.00 crores and took action based on recent financial performance and the company's request for rating withdrawal following full repayment of facilities.

Rating Action Details

Brickwork Ratings downgraded KIOCL's credit ratings before withdrawing them entirely. The rating action covered both fund-based and non-fund-based bank loan facilities:

Facility Type	Amount (₹ Crores)	Previous Rating	Present Rating	Action
Fund-Based Limits	15.00	BWR A/Negative	BWR A-/Negative	Downgraded and Withdrawn
Non-Fund-Based Limits	1,035.00	BWR A2	BWR A2	Downgraded and Withdrawn
Total Facilities	1,050.00			Withdrawn

The rating withdrawal followed KIOCL's full repayment and closure of its fund-based bank limits, with the company providing a No Due Certificate (NDC) and No Objection Certificate (NOC) from the lender confirming consent for the rating withdrawal.

Financial Performance Deterioration

The rating downgrade reflected significant weakening in KIOCL's operating performance during FY25 and H1 FY26. The company experienced a sharp decline in revenues due to prolonged operational shutdowns lasting 232 days and subdued export demand.

Financial Metric	FY24	FY25	Change
Total Operating Income	₹1,854.07 cr	₹590.46 cr	-68.16%
EBITDA	₹-68.41 cr	₹-200.41 cr	Worsened
Net Loss	₹-83.31 cr	₹-204.58 cr	Widened
Operating Margin	-3.68%	-33.94%	Deteriorated

For H1 FY26, revenue remained low at ₹268.55 crores, with net loss of ₹-54.95 crores, reflecting ongoing operational challenges.

Key Credit Concerns

Brickwork Ratings highlighted several factors contributing to the rating downgrade:

Operational Challenges: Sharp fall in production and sales volumes, with export volumes reducing drastically to 0.15 MTPA in FY25 from 1.59 MTPA in FY24
Cost Structure Issues: High fixed employee expenses of ₹157 crores in FY25 despite lower production, along with elevated power and fuel costs of ₹115 crores
Market Exposure: Vulnerability to pellet price volatility and competitive industry environment, with dependence on tolling arrangements restricting profitability
Regulatory Risks: Exposure to policy changes such as export duty impositions that historically affected operations

Credit Strengths and Liquidity Position

Despite operational challenges, KIOCL maintains certain credit strengths:

Strength Area	Details
Government Support	99.03% Government of India ownership with Mini Ratna status
Debt Position	Remains debt-free with zero external debt in FY25
Liquidity	Strong cash position of ₹730 crores in FY25, ₹690 crores in H1 FY26
Current Ratio	Robust at 3.56 in FY25 indicating comfortable short-term solvency
Tangible Net Worth	₹1,001 crores in FY25 despite losses

Future Outlook and Development Projects

The company is developing the Devadari iron ore mine to secure raw material supply through backward integration. Capital expenditure of approximately ₹530.15 crores has been invested in the project, with regulatory approvals including environmental, forest, and mining clearances already received. Once operational, the mine is expected to lower raw material and freight costs, supporting sustainable profitability improvement.

Regulatory Compliance

KIOCL submitted this rating intimation to stock exchanges pursuant to Regulation 30 read with Schedule III of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The company confirmed that all fund-based limits have been fully repaid and closed, with no outstanding dues to lenders.

1 Day	5 Days	1 Month	6 Months	1 Year	5 Years
+2.46%	-2.62%	-9.47%	+19.03%	-9.34%	+147.22%

KIOCL Limited (formerly known as Kudremukh Iron Ore Company Limited) has reported a substantial improvement in its financial performance for the second quarter, showcasing a remarkable revenue surge despite continued losses.

Financial Highlights

Metric	Q2 Current Year	Q2 Previous Year	Change
Revenue	₹1.42 billion	₹161.40 million	+780.00%
Net Loss	₹171.50 million	₹692.00 million	-75.20%

Revenue Surge

KIOCL witnessed an impressive surge in revenue, reaching ₹1.42 billion in the second quarter. This marks a substantial increase from ₹161.40 million reported in the same quarter of the previous year, representing a staggering growth of approximately 780.00%.

Reduced Losses

While the company continues to operate at a loss, there has been a significant improvement in its bottom line. KIOCL reported a net loss of ₹171.50 million for the quarter, which is a considerable reduction from the ₹692.00 million loss incurred in the corresponding quarter of the previous year. This represents a 75.20% decrease in net losses year-over-year.

Operational Recovery

The dramatic increase in revenue, coupled with the substantial reduction in net losses, indicates a strong operational recovery for KIOCL. These improvements suggest that the company's strategies for enhancing operational efficiency and potentially expanding its market presence may be yielding positive results.

Despite the continued losses, the significant revenue growth and reduced net loss demonstrate KIOCL's resilience and potential for further improvement. Investors and market watchers will likely keep a close eye on the company's performance in subsequent periods to see if this positive trend continues.