Bhagyanagar India Ltd

Rating action and key details

• ICRA has placed Bhagyanagar Copper Private Limited on Rating Watch with Developing Implications.
• Long-term fund-based - Others rated Rs 595 crore on [ICRA]A- Rating Watch.
• Long-term fund-based - Term loan Rs 59 crore rated on [ICRA]A- Rating Watch.
• Demerger-related execution of copper business into Bhagyanagar Copper Private Limited under Tieramet; completion expected by Oct 2026.
• BCPL's financial profile improving, with revenue growth and higher value-added product mix.
• Strengthened market position, diversified customers, and prudent hedging practices; promoter experience cited.
• Risks include working capital intensity, copper price volatility, scrap availability, and raw-material sensitivity.
• Liquidity appears adequate; cash accrual expected > Rs 90 crore, covering ~Rs 7 crore debt in FY2027.
• Rating sensitivities: upgrade if earnings and net worth rise; downgrade if interest coverage falls below 4x.
• Status: Surveillance under Rating Watch with Developing Implications; conclusion expected within roughly one year.

Bhagyanagar India Ltd – Closure of Trading Window

Record Date and Action

• Record date fixed at 8 October 2026 to determine entitlement.
• One new equity share issued for each demerged share (1:1).
• New shares issued in demat form; physical holders must share demat details.
• If details are not provided, shares may be held in trust for the shareholder.

Record date for equity exchange

• Record date fixed Oct 8, 2026 for 1:1 equity exchange under Composite Scheme among BCPL, BIL, Tieramet.

Trading approvals and listing

• Trading approval received from NSE and BSE for 1,501,434 preferential shares.
• Issue price Rs 348 per share, including Rs 346 premium.
• Distinctive numbers range 31,995,001 to 33,496,434.
• Listing effective from Sep 15, 2026 on NSE and BSE.
• Total issue value approx Rs 522.5 million.
• Shares allotted to non-promoters on preferential basis.
• ISIN INE458B01036.
• Lock-in till 15 March 2027 for the issued shares.

Transaction overview

• Composite scheme combines transferor, transferee, and resulting entity via amalgamation and demerger.
• Three-party arrangement binds shareholders and creditors in going-concern restructuring.

Rationale and objectives

• Restructuring aims to unlock value and attract growth capital.
• Creates ESG-focused entity and improves operational efficiency.

Structure and key terms

• Appointed Date: 01.04.2025; scheme effective upon Tribunal sanction.
• Transferor dissolved; its share capital extinguished.
• Demerger of identified business into the Resulting Company.
• Share exchange ratio: 1 for 1.
• Issue size: 31,995,000 new equity shares of Rs 2.
• Authorized capital to be increased to accommodate issuance.
• Public listing planned on NSE and BSE within sixty days of sanction.
• Record Date to be fixed mutually.
• Tax liabilities allocated to respective surviving entities.
• No further issue of Transferor shares; extinguishment completed.

Financial impact

• Post-issue paid-up capital increases to Rs 6.69 crore.
• New shares issued to Transferee's shareholders: 31,995,000.
• Transferor's equity and investments cancelled.
• In-principle listing approvals obtained; listing within 60 days subject to compliance.
• Tax and statutory dues allocated to respective entities per scheme.

Stakeholder impact

• Employees of Transferor become employees of Transferee with protections.
• Public shareholders receive shares in Resulting Company on a 1:1 basis.
• Creditors' claims pursued by Transferee; liabilities allocated per scheme.
• Post-scheme listing and regulatory compliance expected to be maintained.

Status and next steps

• NCLT Hyderabad sanction order dated 07.09.2026; binding on all stakeholders.
• Appointed Date issue acknowledged; potential modification to reflect incorporation date.
• Orders require compliance with statutory observations; tax undertakings included.
• In-principle approvals from stock exchanges obtained; final approvals pending.
• Post-approval filing with ROC for INC-28; registration actions.

Financial highlights

• Consolidated revenue ₹2,37,782.83 Lakhs, up 46% YoY.
• Consolidated EBITDA ₹10,613.74 Lakhs, up 186% YoY.
• Consolidated PAT ₹5,017.15 Lakhs, up 257% YoY.
• EPS ₹15.68 per share (basic/diluted).
• Net profit margin 2.10% in FY26.
• ROCE 18.58% in FY26.
• Net debt ₹37,932.45 Lakhs; gearing 0.60x.
• Net cash from operating activities ₹5,899.76 Lakhs.
• Capex plan FY27-FY28: ₹40 Crore.
• Preferential issue: ₹52.25 Crore; listing approvals sought.

Capital structure & liquidity

• Net debt of ₹37,932.45 Lakhs versus equity+quasi-equity of ₹61,046.22 Lakhs.
• Gearing ratio reported at 0.60x; no covenant breaches seen.
• Consolidated cash and equivalents modest; operating cash flow positive.

Strategic restructuring & capital allocation

• Composite Scheme of Arrangement approved: BCPL merges into Bhagyanagar India Limited; copper business to Tieramet.
• Copper business to be demerged into Tieramet Limited; NSE/BSE listing planned.
• Post- FY26, 15,01,434 equity shares issued at ₹348; proceeds ~₹52.25 Crore.
• Identical shareholding across post-restructuring entities; focus on two focused platforms.

Operational performance & capacity

• Copper-focused portfolio with value-added products; volumes 24,655 MT in FY26.
• Two Hyderabad units operate ~70% capacity; total capacity ~35,000 MTPA.
• ISO 9001/14001/45001 certifications attained; heat recovery and Upcast/Conform tech in use.
• Capex plan ₹40 Crore for FY27-FY28 to expand capacity and upgrade tech.

Governance & management changes

• KMP changes: Ritika Tandon (CS) resigned 30-07-2025; Sanjay Singh Rathore appointed 30-03-2026.
• Board and Audit Committee operate under SEBI LODR; no material audit qualifications reported.

Risk factors & regulatory matters

• Ongoing GST dispute; ₹10,335.12 Lakhs demand with protest; appeal in progress.
• Income tax assessments resolved in some cases; others under appeal.
• Copper price volatility and FX exposure risk; hedging and inventory management in place.

ESG, circularity & sustainability

• Circularity: recycle-focused; scrap sourcing relationships and energy-intensity improvements.
• Heat recovery systems; emphasis on energy efficiency and resource-optimal production.

Audit, internal controls & disclosures

• Independent auditors: Luharuka & Associates; no qualifications; internal controls deemed adequate.
• Secretarial audit: no material qualifications; governance disclosures aligned with SEBI LODR.