Crisil upgrades long-term debt rating of Muthoot Finance to AA positive

Ratings has upgraded its ratings on long-term facilities of to AA positive with a stable outlook from AA.

The upgrade is driven by Muthoot Finance’s demonstrated ability to profitably scale up its core gold loan business while maintaining its strong financial risk profile.

The rating rationale said established track record and brand name in gold financing industry, strong capitalisation and profitability among the best in industry which is expected to remain healthy are the strengths of

The change from AA to AA positive signifies reaching the highest standing in the category and the rating is just one level below AAA rating, which is the highest rating for long term instruments.

said the rating upgrade will enable it to raise more long-term funds as well as attract a wider set of investors. Moreover, the company will be able to raise funds at much more competitive rates.

“This upgrade can further attract investments from retail investors in the public issue of non-convertible debentures in which company has a track record of 24 issuances raising Rs 17,392 crore cumulatively.”

In FY20, the country’s largest gold financing company in terms of loan portfolio had reported 53 per cent year-on-year increase in net profit at Rs 3,018 crore.

“With this rating upgrade, Muthoot Finance has become one of the few non-banking finance companies which achieved this rating level on a standalone basis without any parental support factored in,” said Managing Director George Alexander Muthoot.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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