### **Overview** Sarda Energy & Minerals Ltd (SEML), founded in 1973, has evolved from a traditional steel manufacturer into an **integrated industrial conglomerate** with strategic vertical integration across **Minerals, Energy, and Metals**. Headquartered in Raipur, Chhattisgarh, and part of the Sarda Group, the company has repositioned itself as a **low-cost, resilient producer** by leveraging captive resources, diversifying revenue streams, and building annuity-like income from renewable energy. The transformation has been driven by a clear strategy: **resource security through mining, energy self-sufficiency, and value-added manufacturing**, creating operational synergies and reducing exposure to commodity cycles. --- ### **Strategic Pillars** 1. **Minerals** – Secure raw material supply via captive and commercial coal and iron ore mines. 2. **Energy** – Generate stable, high-margin power through thermal, hydro, and solar assets. 3. **Metals** – Manufacture long steel products and ferro alloys using captive inputs to reduce costs and improve margins. This integrated model ensures **cost efficiency, supply chain resilience, and sustainability**. --- ### **Business Segments** #### **1. Energy: A Growing Annuity Engine** - **Thermal Power: 761.5 MW** - 600 MW at Binjkot, Chhattisgarh (acquired from SKS Power in August 2024) - 81.5 MW captive plant at Siltara, Chhattisgarh - 80 MW at Visakhapatnam - Strategically located near the **Gare Palma IV/7 coal mine**, enabling fuel cost advantages and high efficiency. - **Hydropower: 167 MW (Operational)** - 113 MW plant in Sikkim (commissioned June 2021) - 24 MW + 24.9 MW in Chhattisgarh (Rehar plant commenced trial in Jan 2025, commercial operation as of July 8, 2025) - 4.8 MW in Uttarakhand with a proposed 3 MW expansion - All projects (excluding Sikkim) operate under **30–35-year PPAs** with state discoms, ensuring long-term revenue visibility. - High EBITDA margin of **72% in FY25**, driven by low variable costs and stable offtake. - **Solar Power: 50 MW (Under Development)** - Under construction in Chhattisgarh, targeted for commissioning in Q1 FY26 for captive use. > **Energy now contributes 59% of EBIT** (up from 20% previously), driven by the SKS Power acquisition. #### **2. Minerals: Resource Security & Value Addition** - **Coal Mining** - **Gare Palma IV/7 (Chhattisgarh)**: 39.09 million MT high-grade coal reserves, production capacity: **1.1 million MT/year** (achieved 1.68 million MT production in FY25). - **Shahpur West (MP)**: 13.4 million MT reserves, capacity: 0.6 million MT/year; initial operating consent received, production expected by end of FY26. - **Sahapur Underground Mine (MP)**: Initial consent obtained; will meet high-grade coal needs. - **Gare Palma IV/5**: Acquired from Hindalco; regulatory approvals underway. - **Kalyani & Bartunga Mines**: Operated under MDO contracts with SECL (4.5% and 18% revenue share); commercial flexibility. - **Iron Ore Mining** - Owned mine in Rajnandgaon, Chhattisgarh: supplies ~40% of iron ore needs (capacity: 1.5 million MT/year). - **Surjagad-1 Iron Ore Block (Maharashtra)**: Letter of Intent received; preferred bidder status awarded in 2023. Will enhance long-term resource security. > **Vertical integration ensures 100% captive coal supply and reduced reliance on imports**, with surplus available for commercial sale. #### **3. Metals: Vertically Integrated Steel & Ferro Alloys** - **Steel Manufacturing (Siltara, Chhattisgarh)** - Full value chain: Iron ore → Pellets → Sponge Iron → Billets → Wire Rods → HB Wires - Annual Capacities: - Iron Ore Pellets: 900,000 MT (35% captive, 65% sold) - Sponge Iron: 360,000 MT (60% captive) - Billets: 300,000 MT (85% captive) - Wire Rods: 250,000 MT (20% captive) - HB Wires: 45,000 MT (cold-drawn from wire rods) - **Ferro Alloys** - **Total Capacity: 147 MVA** - Siltara, Chhattisgarh: 45 MVA (domestic focus) - Visakhapatnam (SMAL): 102 MVA (export focus) - SMAL is a **Three-Star Export House**; SEML is a Two-Star Export House. > Despite declining revenue share in recent years, metals remain a core competency with **strong captive consumption**, driving cost efficiency. --- ### **Revenue Mix (FY25)** | Segment | Revenue Contribution (2024–25) | Trend vs. Prior Year | |-----------------------|-------------------------------|-----------------------| | **Power Generation** | **30.85%** | ↑↑↑ (from 9.35%) | | **Ferro Alloys** | 30.13% | ↓ (from 38.03%) | | **Steel Products** | 18.78% | ↓ (from 26.38%) | | **Iron Ore Pellets** | 10.06% | ↓ | | **Sponge Iron** | 6.53% | ↓ | | **Others** | 3.65% | ↓ | > The shift confirms the **strategic pivot towards energy** as a high-margin, stable contributor. --- ### **Recent Developments & Operational Highlights (2024–25)** - ✅ **Acquisition of SKS Power (600 MW)** completed in August 2024 for ₹1,950 crore under IBC process. - ✅ Rehar 24.9 MW hydro plant (Chhattisgarh) achieved **commercial operation on July 8, 2025**. - ✅ Binjkot thermal plant achieved **6th highest PLF nationally** by April 2025, despite initial stabilization issues. - ✅ **Record production in FY25**: - 1.68 million MT coal - 8.19 lakh MT iron ore pellets - 113.45 TPH waste heat generation - ✅ **Digital transformation** implemented across sites: automated monitoring, centralized controls, real-time process optimization. - ✅ **Free cash flow generation strong**, with hydro assets self-funding future greenfield projects. --- ### **Strategic Advantages** - **Vertical Integration**: From mine to metals to megawatts, enabling cost control, supply security, and margin resilience. - **Logistical Efficiency**: Mines within 140–200 km of manufacturing sites; port access at Visakhapatnam. - **Annuity-Like Revenues**: 95%+ of hydropower revenues under long-term PPAs; thermal power supports captive load and trading. - **Captive Power**: 761.5 MW thermal + 167 MW hydro + 50 MW solar (soon) meet ~100% internal needs. - **Domestic Focus**: 88% revenue from India; 95% procurement domestic; low forex exposure. --- ### **Financial & Operational Strength** - **Strong Balance Sheet**: TOL/NW ratio improved over the years (as low as 0.58x in FY23), indicating healthy leverage. - **Credit Ratings**: CRISIL A/Stable (SEML), A1 (SMAL); India Ratings A+/Stable for hydro SPVs. - **Export Strength**: Ferro alloys exported globally; natural hedge against forex due to export earnings matching import costs. - **Sustainability Focus**: 142+ MW renewable capacity; future projects aligned with India’s net-zero goals. --- ### **Challenges** - Initial integration complexity post-SKS Power acquisition. - Regulatory approvals for new mining blocks (e.g., Gare Palma IV/5) pending. - Execution risk in new hydro and solar projects, though mitigated by proven track record in challenging terrains. ---