Credit Rating- Revision

No. S/BC/1(18-5)/2025/139 October 13, 2026 National Stock Exchange of India Limited Scrip Code: KIOCL Through: NEAPS BSE Limited Scrip Code: 540680, Scrip Name: KIOCL Through: BSE Listing Centre Metropolitan Stock Exchange of India Limited Scrip Code: KIOCL Through: mylisting Dear Sir / Madam, Sub: Intimation of Credit Rating Pursuant to Regulation 30 read with Schedule III of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, we hereby inform that CARE Ratings Limited, vide its press release dated October 12, 2026, has assigned ratings for the Bank Loan Facilities aggregating to ₹1,050.00 Crores, comprising both fund-based and non-fund-based facilities. The details of the ratings assigned are given below: Name of Agency Facilities Amount Rating Remarks (₹ in Crores) CARE Ratings Limited Long-term / 1,050.00 CARE BBB+; Stable Reaffirmed; Short-term / CARE A2 Outlook bank facilities revised from Negative A copy of the communication received from CARE Ratings Limited is attached below. This is submitted for information and record. Thanking You, Yours faithfully, For KIOCL Limited, (Clafton Siddharth) Company Secretary & Compliance Officer Email id: cs@kioclltd.in Press Release KIOCL Limited October 12, 2026 Name of the Amount Facilities/Instruments Rating2 Rating Action Regulator1 (₹ crore) Long-term / Short-term bank CARE BBB+; Stable / Reaffirmed; Outlook revised RBI 1,050.00 facilities CARE A2 from Negative Details of instruments/facilities in Annexure-1. Rationale and key rating drivers Revision in outlook from ‘Negative’ to ‘Stable’ for the long-term rating of KIOCL Limited (KIOCL) reflects significant improvement in the company’s operating performance in FY26 (FY refers to April 01 to March 31), which remained better than envisaged. Pellet production increased to 2.70 million tonnes in FY26 from 0.93 million tonnes in FY25, while total dispatch increased to 2.81 million tonnes from 0.89 million tonnes in the same period. Consequently, capacity utilisation improved to ~77% from 27%, supported by the ramp-up in conversion volumes under the arrangement with NMDC Limited (NMDC). Higher sales volume led to a significant reduction in operating losses in FY26 leading to net profit of ₹17 crore compared to net loss of ₹205 crore in FY25. Improvement in profitability was also supported by manpower deployment and other operating income. Reaffirmation of ratings assigned to bank facilities of KIOCL continues to derive strength from its majority ownership by the Government of India, its status as a ‘Mini Ratna’ Central Public Sector Enterprise (CPSE) under administrative control of Ministry of Steel and its operating arrangements with other public-sector entities (PSU). Financial risk profile remains comfortable, supported by the sizeable net worth of ₹1,731 crore and a low overall gearing of 0.13x as on March 31, 2026. Liquidity is supported by cash and liquid investments of ~₹826 crore as on March 31, 2026. The company had no external term loan and continues to maintain a net cash position, providing substantial financial flexibility to fund near-term capex and working capital requirements. Existing operations of KIOCL currently comprises a 3.5 million tonnes per annum (MTPA) pellet plant. Despite increase in capacity utilisation, the pellet plant continues to face occasional shutdowns owing to the unavailability of iron ore fines. The Devadari Iron Ore Mine remains strategically important for enhancing raw-material security and reducing the company’s exposure to high-cost external procurement and logistics. Execution and registration of the Forest Lease Agreement in FY26 was a key progress; however, physical handover of the forest land, receipt of working permission and completion of certain residual compliances remain pending. Timeline for commencement of mineral production and dispatch has been extended to January 01, 2028. Timely completion of remaining approvals and operationalisation of the mine remains a key rating monitorable. Ratings remain constrained by subdued operating profitability despite improvement, presence in the highly competitive and fragmented steel industry, marked by cyclicality and sensitivity to demand-supply dynamics, volatility in pellet realisations, and exposure to fluctuations in iron ore, furnace-oil and freight costs. The company’s operating performance also depends on availability of raw material from NMDC, continuity of the tolling arrangement and timely evacuation of pellets. Rating sensitivities: Factors likely to lead to rating actions Positive factors • Timely execution and commissioning of capex plan (development and operationalisation of Devadari mines), leading to significant improvement in the company’s operational performance on a sustained basis. • Sustained operating break-even and positive cash accruals, supported by adequate conversion volumes, improved own-pellet sales and better absorption of fixed costs. Negative factors • Adjusted overall gearing deteriorating to beyond 0.75x, going forward. • New capex undertaken either through internal accruals or a mix of debt and internal accruals, stretching existing liquidity position and impacting capital structure. • Significant delay in operationalisation of Devadari Mines than envisaged, which may adversely impact company’s operating performance. Analytical approach: Standalone 1SEBI: Securities and Exchange Board of India; RBI: Reserve Bank of India; MCA: Ministry of Corporate Affairs; IRDAI: Insurance Regulatory and Development Authority of India; PFRDA: Pension Fund Regulatory and Development Authority. 2Complete definitions of ratings assigned are available at www.careratings.com and in other CARE Ratings Limited’s publications. 1 CARE Ratings Ltd. Press Release CARE Ratings Limited (CareEdge Ratings) has considered the standalone approach, factoring in the government notching per CareEdge Ratings’ criteria on ‘Factoring linkages-government support’. Outlook: Stable The Stable outlook reflects the expectation that KIOCL will sustain higher capacity utilisation, supported by the conversion arrangement with NMDC, while maintaining its strong liquidity and comfortable capital structure. albeit Detailed description of key rating drivers Key strengths Majority ownership of Government of India Incorporated in April 1976, KIOCL is a Schedule ‘A’ Mini Ratna CPSE under the Ministry of Steel, Government of India, which held 99.03% stake in company as of March 31, 2026. The company operates a 3.5-MTPA pellet plant at Mangaluru, while its 0.216- MTPA blast furnace facility is currently non-operational. Historically, an export-oriented pellet producer, KIOCL exited the export- oriented unit (EOU) scheme in FY26, enabling domestic sales/conversion of pellets. Significant improvement in operational performance, despite continued subdued profitability KIOCL reported a significant improvement in operational performance in FY26, supported by the ramp-up of pellet conversion volumes under the NMDC arrangement. Total pellet sales volume increased to ~2.81 million tonnes in FY26 from 0.89 million tonnes in FY25, driven by an increase in NMDC conversion volume to 2.77 million tonnes from 0.39 million tonnes in the same period. Consequently, income from operations increased by 7.0% to ₹632 crore. The higher sales volume led to a significant reduction in operating losses in FY26 leading to net profit of ₹17 crore compared to net loss of ₹205 crore in FY25. Improvement in profitability was also supported by manpower deployment and other operating income. However, increase in sales volume did not result in a commensurate improvement in revenue and profitability, as the operating profile remained dominated by lower-margin conversion operations. Tolling realisation declined by 23.5% to ~₹2,059 per tonne from ₹2,692 per tonne, while own-pellet sales volume declined by 92.6% to 0.037 million tonnes. In current financial year, KIOCL increased share of own-pe [Showing first 8,000 characters — download PDF for full document]