Steel Exchange India Limited (SEIL), a prominent integrated steel manufacturer in South India, has successfully secured a ₹350 crore refinancing facility from a consortium of financial institutions, including Kotak Mahindra Investments Limited, Oxyzo Financial Services Limited, and Kotak Credit Opportunities Fund. This strategic move aims to reduce the company's high-interest debt, enhance liquidity, and support future growth initiatives.
Strategic Refinancing to Strengthen Financial Position
On September 30, 2025, SEIL received ₹150 crore of the sanctioned ₹350 crore refinancing facility. The initial disbursement was utilized to prepay a ₹25 crore term loan and redeem ₹116.65 crore worth of non-convertible debentures (NCDs). The remaining ₹200 crore is expected to be disbursed by October 10, 2025, to acquire outstanding NCDs, subject to requisite approvals.
This refinancing initiative is part of SEIL's ongoing efforts to optimize its capital structure and reduce financing costs. By replacing high-interest debt with more favorable terms, the company aims to achieve substantial savings in interest expenses and improve cash flow.
Financial Benefits and Long-Term Impact
The new financing arrangement offers several advantages:
Lower Interest Rates: The refinancing reduces the company's borrowing cost by approximately 5.50%, compared to the previous rate of 18.75% per annum.
Extended Repayment Tenure: The repayment period has been extended to five years, providing greater financial flexibility.
Improved Cash Flow: The company anticipates cumulative savings of around ₹130 crore by FY2028 due to reduced interest payments.
These improvements are expected to enhance SEIL's liquidity position and support its long-term business objectives.
Commitment to Shareholder Value and Growth
Suresh Kumar Bandi, Joint Managing Director of SEIL, emphasized that the refinancing aligns with the company's commitment to prudent financial management and value creation for shareholders. He stated, "The sanctioned refinance facilities will ease our interest burden, improve cash flows, and provide us the flexibility to support growth."
SEIL's proactive approach to debt management and its focus on strengthening its financial foundation position the company well to navigate future challenges and capitalize on growth opportunities in the competitive steel industry.
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