CRISIL, the largest Credit Rating Agency in the Country, has upgraded its rating of Muthoot FinCorp Ltd from ‘ A’ (Stable) to ‘A+ (Stable)’. Muthoot FinCorp is part of the Muthoot Pappachan Group. This rating upgrade is the reflection of the Company’s healthy performance in core Gold Loan portfolio, its established position in the Country’s gold loan business; its strong fundamentals; its healthy performance manifested by steady growth in assets under management (AUM), sound asset quality and increased earnings profile. The CRISIL rating upgrade also underscores a high degree of safety regarding the timely servicing of the Company’s NCDs; they carry very low credit risk.
The Company’s gold loan business AUM grew 24% during the last three-quarters of the current fiscal. It is expected to grow by 28% for the FY 2020-21. The Company has maintained healthy asset quality over the years, as reflected in gross non-performing assets (GNPAs) of 1.0 -1.8% under the Gold Loan portfolio being maintained during the last five fiscals. As of the end of December 2020, the Company’s GNPA and credit cost stood at 1.3 % and 0.2% (annualised), respectively.
The Gold Loan portfolio of the Company accounts for about 67% of the Group’s overall AUM as of December 31, 2020, Rs 27,000 Crs, and 87% of its profits. The company’s profitability has steadily improved in the past 2-3 fiscals as evidenced by standalone return on managed assets (RoMA) of 1.7% (annualised) during the last three-quarters of the current fiscal. This improvement is backed by improving the branch productivity, steady reduction in operating costs while maintaining overall low credit costs. The CRISIL Rating evidences that the Company has adequate liquidity on a standalone basis.
The four NBFC’s under the Muthoot Pappachan Group are Muthoot FinCorp, Muthoot Capital, Muthoot Microfin, and Muthoot Housing Finance, and are primarily into Gold Loans, 2 Wheeler Loans, Used Car Loans, Housing Loans, Small Business Loans, and Micro Enterprise Loans.
In the current financial year, MFL has disbursed about Rs. 38000 Crs to 7.5 million customers, of which 4.5 million customers are the Nano, Micro, and Small Enterprises. Various gold loan schemes like the Super Value, Restart India Pradhan, Samudra Gold Loan, Ashwas Dinam Gold Loan for Traders were introduced during the year. The latest product launched was the AtmaNirbhar Mahila Gold Loan, a gold loan product exclusively designed for Women, providing maximum permissible value for their gold with minimal interest rate.
The CRISIL Rating signals that Muthoot FinCorp’s business profile will continue to be supported by its established market position in the gold loan segment strengthened by the promoters’ extensive experience in the gold loan industry, healthy asset quality, and improving earnings profile in the gold loan portfolio.
Thomas John Muthoot, Chairman & Managing Director, said, “The rating upgrade by CRISIL is very significant in strengthening the confidence of our lenders and retail investors. The upgrade will also enable the company to widen its retail and corporate investor base.”
During the Financial year, the company, through three Public Issues, raised NCDs to the tune of Rs. 1,138.59 Crs. In addition, the company issued NCDs via private placement to Banks amounting to Rs. 1,750 Crs and raised Market Linked Debentures (MLD) Rs. 997 Crs.
Muthoot Pappachan Group (MPG) also known as Muthoot Blue, the much-diversified business conglomerate has been providing solutions, services, and expertise to millions of customers across the country in various domains like multiple NBFCs with multiple products within Retail Financial Services, wide-spectrum Sports initiatives, powerful CSR initiatives, Automotive, Realty, Hospitality, IT and Alternate energy.
Over the years, Muthoot Pappachan Group has grown to become a significant entity in the Indian business landscape. Muthoot Pappachan Group is one of the largest employers in the country, across industries, providing employment to close to 27,000 people and endeavoring to give them a family-like work environment. The Group’s customer-centric approach and innovation in terms of new products that cater to changing customer needs have helped in gaining the loyalty of innumerable customers, as well as attracting new ones. The Group adopts the latest technology and new ways of catering to the needs of customers, coupled with an uncompromising stand on values, principles, and ethics.
Muthoot FinCorp Ltd, the flagship Company of Muthoot Pappachan Group, Muthoot Blue, is one of the largest NBFCs in India with around 3600 branches pan India. Muthoot FinCorp is a provider of retail finance, predominantly in the form of secured and unsecured loans to middle and low-income customers. Decades of customer-centricity, dedicated research, and experience with the customers and their families have enabled the Company to provide quick and customized financing options & investment schemes for millions of customers. Currently, it has an Active Customer Base of around two million happy customers. Muthoot FinCorp Ltd is one of the largest Gold Loan companies in India. At the same time, the Muthoot FinCorp branches offer and/or service products of Muthoot Blue Group company, for the fulfillment of all lifecycle & life-stage needs of the common man and so, act as a one-stop-shop for the financial needs of the common man.
The diverse mix of retail offerings includes, apart from Gold Loan, Small Business Loan products, Affordable Housing Loan, Two-wheeler Loan, Used car loan, Domestic &International Money Transfer, Chits, Foreign exchange, Insurance products & services, Wealth Management services, Affordable Gold Jewellery and so on. Close to 1,50,000 people walk into these branches, day after day, for the fulfillment of their financial needs & desires in terms of Loans, Savings, Protection requirements, and other Financial transactional/day-to-day needs.
