| Seamec Limited | ||||
| Rating continues on 'Watch Developing'; Rated amount enhanced for Bank Debt | ||||
| Rating Action | ||||
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| Note: None of the Directors on Crisil Ratings Limited’s Board are members of rating committee and thus do not participate in discussion or assignment of any ratings. The Board of Directors also does not discuss any ratings at its meetings. | ||||
| 1 crore = 10 million | ||||
| Refer to Annexure for Details of Instruments & Bank Facilities |
Detailed Rationale Crisil Ratings continues its ratings on the bank facilities of Seamec Ltd (Seamec) on ‘Rating Watch with Developing Implications’.
The rating watch continues to factor in the ongoing restructuring initiatives of Seamec’s parent entity, Hal Offshore Ltd (HAL, 'Crisil A+/Watch Negative/Crisil A1/Watch Negative’, holding 70.77% stake in the company) and transfer of vessel, Seamec Anant, from HAL to Seamec.
The company has completed the acquisition of the vessel, Seamec Agastya (erstwhile vessel Nusantara), in August 2025 at a consideration of USD 23 million (~Rs 200 crore), funded through a term loan of Rs 150 crore and internal accrual. The acquisition of the vessel, Seamec Anant, is expected to be completed by the third quarter of fiscal 2026 at a consideration of ~USD 70 million which will be partly funded by debt.
Meanwhile, HAL has concluded a creditors' meeting on September 19, 2025, as directed by the National Company Law Tribunal (NCLT), to seek approval for its restructuring plan. The proposed scheme involves demerging the vessel and marine business into MMG Marine Engineering Pvt Ltd and the securities investment business (including investment in Seamec) into Rinkpi Finance & Consultants Pvt Ltd, with HAL retaining its engineering, procurement and construction (EPC) business. Both resulting companies, MMG Marine Engineering Pvt Ltd and Rinkpi Finance & Consultants Pvt Ltd, are completely owned by the promoter group. The voting results are being compiled and will be submitted to NCLT for final sanction of the scheme.
Crisil Ratings will monitor the timely transfer of the vessel, Seamec Anant, to Seamec, which could improve the business risk profile of the company. Also, the progress on the structural change at HAL would be assessed while resolving the developing watch.
The rating continues to take comfort from the healthy business risk profile of Seamec, backed by its established market position in providing multi-support vessels (MSVs) on charter-hire basis under long-term contracts to offshore exploration and production (E&P) players in India. Revenue from operations has continued to grow at healthy compound annual growth rate (CAGR) of 21% over fiscals 2021-2025, but there was ~11% degrowth on-year of Rs 682 crore in fiscal 2025, primarily due to unexpected breakdown leading to lower deployment. Revenue in the first quarter of fiscal 2026 was Rs 211 crore. Operating margin is expected to remain healthy at over 30%.
Revenue growth is expected to be supported by vessel additions and higher deployment rates of owned vessels over the medium term, as business prospects remain healthy amid continued focus on oil E&P activity in India. Furthermore, the previous mandate from the Directorate General of Shipping requiring the replacement of aged vessels have been put on hold as per revised draft order of May 2025. Hence, three of the older vessels which were planned to be sold will continue to operate over the medium term, leading to higher revenue and better overall deployment.
The financial risk profile remains strong, supported by healthy cash accrual, despite capital investments to replace the aged fleet. In the near term, the company’s planned acquisition is estimated to require capex of approximately Rs 800 crore, to be funded through a mix of debt and internal accrual. Despite capex, the gearing is expected to remain comfortable at below 0.5 time in the near term, from 0.21 time as on March 31, 2025. These strengths are partially offset by modest scale of operations and exposure to client concentration risks. |
Analytical Approach Crisil Ratings has combined the business and financial risk profiles of Seamec and its subsidiaries, as these entities are in a similar line of business with strong operational, managerial and financial linkages. Furthermore, it has applied the parent notch up framework to factor in support from HAL considering its criticality to the parent.
Please refer Annexure - List of Entities Consolidated, which captures the list of entities considered and their analytical treatment of consolidation. |
Key Rating Drivers - Strengths Established market presence in the vessel hire business: Seamec has established market position in providing multipurpose support vessels (MSVs) on charter hire basis to offshore E&P players in India, namely Oil & Natural Gas Corporation Ltd (ONGC). These services continue to be of importance to E&P players, given the increased focus on enhancing output from domestic oilfields and their own ageing assets. While there could be continued requirement for the existing vessels to be owned, future growth opportunities could be limited. With the addition of the vessels, Seamec Agastya, in August 2025 and Seamec Anant planned for the third quarter of fiscal 2026, the risks related to breakdown and redeployment would reduce, further strengthening the company’ s position in this industry.
Comfortable operating performance: Long-term contracts spanning 3 to 5 years, that were executed to charter MSVs, offer medium-term visibility for revenue expected from this segment. A healthy gross margin of 50-60% is earned on the MSV fleet. While the company has secured long-term contracts for its MSV fleet and diving support vessel (DSV), barge and bulk carriers are on a short-term/spot basis. Seamec has added the vessel, Seamec Agastya, in August 2025 and is in the process of adding Seamec Anant, which would further reduce the redeployment risk associated with these vessels. The operating margin is susceptible to redeployment risk associated with vessels that are deployed on a spot basis.
Moderate financial risk profile: The financial risk profile remains strong, supported by healthy cash accrual and is expected to remain healthy over the medium term, despite planned capital investments to acquire new vessels. In the near term, the company plans to purchase two new vessels, requiring capex of approximately Rs 800 crore this fiscal, to be funded through a mix of debt and internal accrual. However, the financial metrics are expected to remain comfortable as these vessels are already deployed under long-term contracts providing revenue visibility in the near to medium term. Gearing is expected to remain comfortable at below 5 times in the near term, from 0.21 time as on March 31, 2025, despite increased debt this fiscal. |
Key Rating Drivers - Weaknesses Susceptibility of operating performance to redeployment risk, on account of ageing fleet: As on August 31, 2025, Seamec owns seven vessels and one barge, among which three vessels are more than 40 years old. Out of the three, the company had already replaced one of its vessels with a younger vessel, added another vessel, Seamec Agastya, in August 2025 and is planning acquisition of Seamec Anant this fiscal. Further, with new guidance from the DSG, older vessels are not planned to be immediately replaced. That said continued deployment would continue to remain a key monitorable. Also, the addition of new vessels this fiscal should help improve the overall fleet life.
Exposure to client and segmental concentration risk: MSV services are provided to offshore oilfields in India, for which E&P rights are majorly owned by ONGC. This exposes Seamec to client concentration risk. However, the company does benefit from having a strong client in terms of receiving timely payments. Furthermore, the company has also started deploying vessels to overseas clients which would help mitigate the risk. However, since revenue is entirely dependent on offshore E&P activities, the company remains exposed to segmental concentration risk.
Susceptibility of charter rates to inherent volatility in crude oil prices: Profitability and cash flow in the offshore business depend on charter rates, which are influenced by offshore and deepwater expenditure by oil and gas majors. Offshore and deep-water block investments, which are larger than those in onshore blocks, are highly sensitive to crude oil prices. In the past, slowdown in global oil and gas E&P capex had led to decline in demand for offshore equipment, resulting in a sharp fall in charter rates for offshore vessels and rigs.
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Liquidity - StrongSeamec maintained cash and cash equivalent of more than Rs 140 crore as on March 31, 2025. The company is expected to generate cash accrual of Rs 200-300 crore over fiscals 2026 to 2028. The annual accrual would be sufficient to meet its near-term annual debt obligation of Rs 140 crore for fiscals 2027 to 2028. The company has not utilised any bank limit for the 12 months ended August 31, 2025, which will act as buffer for exigencies. |
Rating sensitivity factors Upward factors:
Downward factors:
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About the Company Seamec (a part of the MM Agarwal group) was incorporated in 1986. It operates in two distinct verticals of the shipping business - offshore support vessels and services and bulk carrier charter business. The company owns seven vessels including one barge in the offshore support business wherein the vessels are deployed in the domestic and international markets. Through its international subsidiary–Seamec International FZE and its joint venture–Seamate Shipping FZC, the company has also diversified its presence in the bulk carrier charter business wherein it owns two dry bulk carriers. |
About the Parent Incorporated in 1996, as part of the MM Agarwal group, HAL is an end-to-end solutions provider of underwater and EPC services to the Indian oil and gas industry. Over the years, it has developed a diversified portfolio which includes turnkey projects involving sub-sea and marine services and EPC contracts. Services offered by HAL are certified by independent agencies such as the American Bureau of Shipping (ABS), Det Norske Veritas (DNV) and Lloyd’s Register (LR) as per requirements of the client.
HAL currently holds a 70.77% stake in Seamec, with the balance held by the public. |
Key Financial Indicators (Crisil Ratings-adjusted)
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Any other information: Not applicable |
Note on complexity levels of the rated instrument: |
Annexure - Details of Instrument(s)
*Interchangeable with letter of credit (LC) limit of Rs 10 crore, cash credit (CC) limit of Rs 1 crore and working capital demand loan (WCDL) of Rs 1 crore. |
Annexure – List of entities consolidated
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| Annexure - Rating History for last 3 Years | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Annexure - Details of Bank Lenders & Facilities | ||||||||||||||||||||||||||||
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Criteria Details
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