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

February 16, 2021 4:41 p.m. STI

Ernakulam (Kerala) [India]Feb. 16 (ANI): Crisil Ratings upgraded its ratings on Muthoot Finance’s long-term debt facilities to AA positive with a stable outlook of AA.
The upgrade is driven by Muthoot Finance’s demonstrated ability to profitably grow its core gold lending business while maintaining its strong financial risk profile.
The rating rationale indicates that an established track record and brand in the gold finance industry, strong market capitalization and industry-leading profitability that is expected to remain healthy are Muthoot Finance’s strengths.

Moving from AA to positive AA means reaching the highest rating in the category and the rating is just one level below the AAA rating, which is the highest rating for long-term debt instruments.
Muthoot Finance said the rating upgrade will allow it to raise more long-term debt funds and attract a wider range of investors. In addition, the company will be able to raise funds at much more competitive rates.
“This upgrade may attract more investment from retail investors in the public issuance of non-convertible debentures in which the company has a track record of 24 issuances generating Rs 17,392 crore cumulatively.”
In FY20, the country’s largest gold finance company by loan book recorded a 53% year-on-year increase in net profit to Rs 3,018 crore.
“With this rating upgrade, Muthoot Finance has become one of the few non-bank financial companies to have reached this rating level on its own without any parental support considered,” Chief Executive George Alexander Muthoot said. (ANI)

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