Rating reflects the management and financial support from parent Manappuram Finance Ltd.
Chandigarh, October 26, 2016: Leading credit rating agency CRISIL has assignedits “A+/stable” credit rating to the long term bank loan facility of Manappuram Home Finance Private Ltd (MHF). The rating reflects managerial and financial support received from the parent Manappuram Finance Ltd. and adequate capitalisation.
According to CRISIL,Manappuram Home Finance is adequately capitalised for the expected scale of business following infusion of capital of Rs.55 crore in fiscal 2016, taking its total paid up capital to Rs.100 crore. Additional infusions are expected to support capital adequacy and keep the gearing at around 5 times over the medium term.These rating strengths are partially offset by a small scale of operations with a limited track record, a modest earnings profile, and exposure to inherent risks relating to the affordable housing finance segment.
The expectation of support from the parent is driven by the strategic importance of the company to the Manappuram group in diversification of its financial product suite. The business is scalable and is expected to grow materially over the medium term. Manappuram Finance Ltd. holds 100% of the equity in Manappuram Home Finance. The parent has infused growth capital andwill infuse additional capital as and when required. Furthermore, its Managing Director, Mr V. P. Nandakumar, along with another director, is represented on the board of the company. CRISIL believes Manappuram Home Finance will continue to receive strong financial and managerial support from its parent, while maintaining adequate capitalisation, over the medium term.
About Manappuram Finance Ltd.
Manappuram Finance Ltd. is one of India’s leading gold loans NBFCs engaged in providing finance against used household gold ornaments. Incorporated in 1992, the company has been promoted by Mr. V.P. Nandakumar (current MD & CEO) whose family has been involved in gold loans since 1949. It is headquartered at Valapad in the Thrissur District of Kerala. The company went public in August 1995 and its shares are listed on the stock exchanges of Mumbai, Chennai, and Kochi.
As of June 30, 2016, Manappuram Finance Ltd. had 3747 branches across 24 states and 4 UTs with Assets under management (AUM) of Rs.130.14 billion. The company’s net worth stood at Rs.29.18 billion.
About Manappuram Home Finance Pvt. Ltd
MHF, a wholly own subsidiary of Manappuram Finance, was incorporated as Milestone Home Finance Company Pvt.Ltd. (Milestone). The current promoters acquired Milestone in 2014 and renamed it. The company started lending operations in January 2015. It operates in the affordable housing finance segment and is building its network in Tier II and III cities. The loan size generally ranges between Rs. 1.2 and 1.5 million. Portfolio outstanding was Rs. 1.7 billion as on June 30, 2016 Currently, there-are 27 branches across 5 states: Maharashtra, Gujarat, Tamil Nadu, Kerala, and Karnataka.