NMDC Steel Limited SBI term-loan rate cut to 8.40% a year

NMDC Steel Limited said State Bank of India revised the interest rate on its rupee term loan to 8.40% a year as at September 30, 2026, from 12.45% effective March 1, 2025. NSL had repaid Rs 1,410.64 crore, leaving Rs 3,065.17 crore outstanding under the loan.

Why did NSL's SBI term-loan interest rate change?

NSL said SBI revised the rupee term-loan rate to 8.40% per annum after the company requested a repositioning of the interest rate. The revised rate was based on the three-month marginal cost of funds-based lending rate, or MCLR, as at September 30, 2026. This replaced the 12.45% annual rate that had applied from March 1, 2025.

The stated change is a reduction of 4.05 percentage points from the earlier reset rate. Before commercial operations commenced, the loan interest was fixed at 7.1% per annum and linked to the six-month MCLR. Under the sanction terms, pricing moved to a grid-based structure after the date of commencement of commercial operations, or DCCO, leading to the 12.45% reset in March 2025.

The filing does not quantify the rupee interest saving from the revised rate. NSL recorded finance costs of Rs 262.99 crore in the half year ended September 30, 2026, compared with Rs 262.11 crore in the corresponding half year a year earlier. The filing does not separately identify the interest cost of the SBI term loan or other borrowing components.

How much of NSL's SBI term loan remains after repayments?

NSL reported an outstanding rupee term loan of Rs 3,065.17 crore as at September 30, 2026, after repayment of Rs 1,410.64 crore. The company said it had drawn Rs 4,475.81 crore under the sanctioned rupee term loan. The reported repayment equals about 31.5% of the drawn amount, based on those disclosed figures.

The company said principal repayment instalments began in March 2024 and are scheduled through June 2031. Interest is payable monthly. The Rs 3,065.17 crore balance remains subject to future scheduled instalments and the 8.40% rate disclosed as at September 30, 2026.

NSL's total borrowings in its financial-results table were Rs 4,836.92 crore at September 30, 2026, down from Rs 5,298.63 crore at September 30, 2025 but above Rs 4,601.94 crore at March 31, 2026. The rupee term-loan balance is not the same measure as total borrowings, which include current and non-current borrowing classifications in the balance sheet.

The balance sheet classified Rs 2,561.58 crore as non-current borrowings and Rs 2,275.34 crore as current borrowings at September 30, 2026. These amounts total Rs 4,836.92 crore, matching total borrowings in the results table. The filing does not provide a direct mapping of the Rs 3,065.17 crore SBI term-loan balance between those two classifications.

What security supports NSL's borrowings?

NSL said it hypothecated its entire fixed assets, including plant and machinery, as security for the rupee term loan. The filing also refers to an equitable mortgage of land excluding forest land under the sanction terms. The term-loan security is distinct from the current-asset charge disclosed for working-capital borrowings.

The September 30, 2026 balance sheet reported property, plant and equipment of Rs 19,029.16 crore and capital work-in-progress of Rs 551.01 crore. Property, plant and equipment had declined from Rs 19,406.00 crore at March 31, 2026 and Rs 19,716.01 crore a year earlier.

NSL had a sanctioned working-capital limit of Rs 4,100 crore, comprising Rs 2,600 crore of fund-based limits and Rs 1,500 crore of non-fund-based limits. Utilisation at September 30, 2026 was Rs 1,762.63 crore of fund-based limits and Rs 666.45 crore of non-fund-based limits, while the working-capital loan rate was also 8.40% per annum based on the three-month MCLR.

Working-capital borrowings are secured by a first-ranking pari passu charge on all current assets, present and future. Pari passu means secured lenders share the charge on an equal-ranking basis. At September 30, 2026, NSL reported current assets of Rs 6,957.25 crore, including inventories of Rs 4,510.85 crore and bank balances other than cash equivalents of Rs 810.15 crore.

What do NSL's latest results show about debt servicing?

NSL reported no default in repayment of borrowings or interest as at the September 30, 2026 reporting date. It also marked the disclosure of outstanding loan and debt-security defaults as not applicable in its integrated filing. This status disclosure does not change the repayment period running through June 2031.

For the September 2026 quarter, finance cost was Rs 136.61 crore, compared with Rs 126.38 crore in the June 2026 quarter and Rs 128.43 crore in the September 2025 quarter. Profit after tax was Rs 61.03 crore in the September 2026 quarter, compared with Rs 50.51 crore sequentially and a loss of Rs 114.78 crore a year earlier.

Debt-service coverage ratio, or DSCR, was 0.19 for the September 2026 quarter, versus 0.17 in the preceding quarter and 0.13 a year earlier. Interest-service coverage ratio, or ISCO, was 1.75, compared with 1.59 in the June 2026 quarter and negative 0.42 in the September 2025 quarter. NSL labels quarterly ratios as not annualised, so they are not full-year measures.

For the half year ended September 30, 2026, cash flow from operating activities was Rs 162.04 crore, down from Rs 847.40 crore a year earlier. The change followed a Rs 613.47 crore increase in inventories during the latest half year, compared with a Rs 128.23 crore reduction in the prior-year period. Finance costs paid were Rs 260.37 crore, against Rs 292.19 crore in the prior-year half year.

Conclusion

NSL's disclosed repricing takes the SBI rupee term-loan rate from the 12.45% level set in March 2025 to 8.40% as at September 30, 2026. The company simultaneously reported Rs 1,410.64 crore of repayments and a Rs 3,065.17 crore term-loan balance, while total borrowings were Rs 4,836.92 crore. The filing identifies fixed assets and land-related mortgage arrangements for the term loan, with current assets charged for working-capital borrowings.

The next disclosed financing milestone is the repayment schedule running through June 2031, with monthly interest payments continuing. Readers can watch future disclosures for changes in the three-month MCLR-linked 8.40% rate, movement in the Rs 3,065.17 crore term-loan balance, and operating cash flow, which was Rs 162.04 crore in the half year ended September 30, 2026.