44016 - RKF COVID Response

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Summary of Investment Information

Project Number

44016

Company Name

RAMKRISHNA FORGINGS LIMITED

Date SPI Disclosed

Sep 21, 2020

Country

India

Region

South Asia

Projected Board Date

Jul 2, 2020

Environmental Category

B - Limited

Status

Active

Last Updated Date

Oct 8, 2020

Department

Regional Industry - MAS Asia & Pac

Industry

Manufacturing

Previous Events

Approved : Jul 2, 2020
Signed : Sep 12, 2020
Invested : Oct 5, 2020

Sector

Iron and Steel Forging

Project Description

The proposed investment is by way of (a) subscription to unlisted, secured non-convertible debentures (NCDs) up to INR1,100 million (equivalent to US$14.6 million) issued by Ramkrishna Forgings Limited (“RKFL” or the “Company”), and (b) at IFC’s option, subscription to NCDs and/or an equity/quasi equity instrument, aggregating up to INR400 million (equivalent to US$5.3 million), issued by the Company (the “Project”). The Project will finance the Company’s long-term working capital requirements, maintenance capex and other general corporate purposes at its existing facilities in India and provide a much-needed liquidity during the COVID-19 crisis, which will enable a swift recovery once operations ramp up.

RKFL, an existing IFC client, was established in 1981 and is one of the leading forged component manufacturers in India supplying to major manufacturers of commercial vehicles and to the railway sectors. The Company operates six manufacturing plants in the states of Jharkhand and West Bengal.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	19.84
Equity

Development Impact

Stakeholder effects: IFC's financing will sustain the Company's ability to maintain operations and be in a better position to deliver goods and services to the commercial vehicles and railways segments during the recovery period as the crisis abates. IFC's financing will also help to preserve more than 1,700 direct jobs as well as indirect jobs across the supply chain during crisis. Resilience: The proposed investment promotes the resilience of the Company through supporting the sustainability of domestic manufacturing of forging components at competitive prices, supplying the essential products to the economy-critical industries such as commercial vehicles and railways.

IFC's additionality stems mainly from its countercyclical role during crises which in this instance comprises IFC's long-standing experience with rapid crisis response efforts, liquidity for working capital, its ability to support real sector clients to address liquidity constraints in response to COVID-19 and to provide critical goods, equipment and supplies, its ability to help clients re-direct supply chains and its support to continued employment in countries of operations.

E&S Category Rationale / Risks and Mitigation

This is a category B project according to IFC’s Policy on Environment and Social Sustainability. Based on information reviewed by IFC, the proposed project will have limited adverse environmental and social (E&S) impacts that are few, site specific, largely reversible and readily addressed through existing mitigation measures and good international industry practices (GIIP). Key E&S risks and issues associated with the project include: the Company’s capacity to manage its EHS performance, and engage with local communities; assurance of fair, safe and healthy working conditions; including special mitigation measures in response to COVID-19 pandemic; utilization of equipment and operational practices that maximizes conservation of energy, water and process materials including recycling and reuse initiatives; management of wastes, emissions and discharges; handling and management of hazardous materials and wastes; and the impacts of operations on nearby communities and local ambient environment.

Contacts

For Inquiries About the Project, Contact

Ramkrishna Forgings Limited
Rajesh Mundhra
Company Secretary & Senior General Manager of Finance
033-4082 0900/ 7122 0900
rajesh@ramkrishnaforgings.com
23, Circus Avenue, Kolkata – 700017, West Bengal, India
www.ramkrishnaforgings.com/

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2121 Pennsylvania Avenue, NW
Washington DC 20433
Telephone: 202-473-3800
Fax: 202-974-4384

Local Access of Project Documentation

RKFL Headquarter: 9th Floor, 23 Circus Avenue, , Kolkata - 700017, West Bengal, India

This Summary of Investment Information (SII) is prepared by IFC to disclose a factual summary of the main elements of the potential investment. Its purpose is to enhance the transparency of IFC’s activities. For any project documentation or data included or attached herein, whether prepared by the project sponsor or otherwise, authorization has been given for public release by the project sponsor. IFC considers that this SII is of adequate quality for release to the public, but has not necessarily independently verified all of the project information therein. It is distributed in advance of IFC Board of Directors’ consideration and may be periodically updated thereafter. Board dates are estimates only and this document should not be construed as presuming the outcome of the Board Directors’ decision. The following SII is disclosed in accordance with IFC's Access to Information Policy (AIP) that went into effect on January 1, 2012.

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