According to reports from ICRA Limited, the rating agency has assigned credit ratings of [ICRA]A+ and [ICRA]A1 to Tega Industries Limited, placing the company on Rating Watch with Developing Implications. This action follows the company's strategic plan to acquire AIP MC Holdings LLC (Molycop) and reflects the current status of the company's financial position during the acquisition process.
The acquisition, valued at approximately $1.455 billion, is set to be funded through a mix of equity, internal accruals, and a proposed term loan of Rs. 1,500 crore. Tega Industries has entered into a definitive agreement to acquire an 84.18% equity stake in Molycop for approximately $394 million, executed in collaboration with Apollo Funds. Despite the significant capital outlay of Rs. 3,620 crore for the acquisition, the company maintains an adequate liquidity position with estimated cash and cash equivalents of Rs. 2,200–2,250 crore as of March 31, 2026.
The combination of Tega's mill liners and Molycop's grinding media is expected to create a powerful, integrated solution for the global mining industry. The acquisition aims to leverage Molycop's status as a global leader in grinding media and boost global scale and cross-selling capabilities. While the acquisition is viewed as strategic, it has led to a temporary elevation in leverage metrics, with ICRA anticipating that the consolidated debt/OPBDITA ratio will remain elevated over the next two years before gradually improving through earnings accretion, debt repayment, and potential asset monetization.
The company's business remains robust, supported by a healthy order book and a geographically diversified revenue stream, with operations spanning 90+ countries and manufacturing facilities across India, Chile, South Africa, and Australia. The rating watch reflects the pending completion of the acquisition and finalization of debt terms, with ICRA expecting to resolve the watch upon the successful closure of the transaction, which is currently expected by June 2026, and the receipt of all final regulatory approvals.
