
Team members search for the human remains or any other clue in the debris pertaining to the Pashamylaram blast at Sigachi Industries in Sangareddy District.
| Photo Credit: Mohd. Arif
Care Ratings has revised the banking facilities of Sigachi Industries to ‘Rating Watch with Negative Implications’ (RWN) in the backdrop of the June 30 fire incident at the company’s factory in Hyderabad.
It has changed the rating for long term bank facilities from Care A- Stable to Care A- RWN; and for long term/short term bank facilities from Care A- Stable/Care A2 to Care A-/Care A2 (RWN), the company informed the stock exchange on Thursday.
The agency said it would continue to monitor the impact of the incident on revenue, profitability and cash flows and long-term impact, if any, of outcome from ongoing investigations. A review will be undertaken once greater clarity emerges. The fire incident resulted in destruction of the manufacturing unit and significant number of casualties and injuries to the employees or workers, it said.
Care Ratings said it believes the incident will likely have notable impact on Sigachi Industries’ overall operations as the Hyderabad unit contributes around 20% of the total revenue with balance coming from the units in Dahej and Jhagadia, both in Gujarat. The company expects to partially offset loss of production at Hyderabad unit through increased capacity utilisation at existing operational units in Gujarat.
Sigachi has also indicated the possibility of expanding capacity by 3,300 MTPA at its Gujarat facilities with minimum time and capital outlay. If the company is able to implement the plans, the impact on the revenue could be limited, the ratings agency said.
Care Ratings said profitability and free cash flows are expected to be impacted led by one-time expenses the company will have to incur in terms of compensation to the deceased, fixed overheads towards the affected unit.
The company has committed to an ex gratia compensation of ₹1 crore to the families of the deceased along with full medical and rehabilitation support for the injured, which could be funded partially through insurance, staggered payments and available liquidity. Sigachi has a free cash balance of around ₹40 crore as on March 31 and unutilised working capital limits of about ₹30 crore.
The company has insurance in place which fully covers the structural damage, inventory and production loss for a period of 90 days, the rating agency said.
Published – July 11, 2025 09:00 am IST