Financial Daily from THE HINDU group of publications
Tuesday, May 03, 2005
Financial Daily from THE HINDU group of publications Tuesday, May 03, 2005 |
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Money & Banking
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Fixed Deposits ICRA retains MA- rating for FDs of Sakthi Finance Our Bureau
Chennai , May 2 ICRA has retained its MA- rating for Sakthi Finance Ltd's fixed deposit and non-convertible debenture programmes. The rating implies "average credit risk". In a release, ICRA has cited "steady quality of assets and the ability to grow profitably in its target segment (truck financing)" as reasons for retaining the rating. The rating considers Sakthi Finance's high exposure to group companies and pressure on profitability due to high cost of funds and high operating cost. Sakthi Finance had an asset base of Rs 217.40 crore as on March 31, 2004. It reported net profit of Rs 66 lakh on a total income of Rs 15.03 crore in 2004-05. Sakthi Finance's asset origination capabilities in the sub-prime retail segment continued to aid steady renewals in its fixed deposit portfolio as well as an improved financial risk profile on account of equity infusion, the ICRA release said. Sakthi Finance has traditionally been present in truck financing, deriving exposure from its parent group's dealership businesses as well as its experience in the transport sector. The company has a network of 21 branches, concentrated mainly in southern India.
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