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Crisil has assigned its “A+/stable” credit rating to the long-term bank loan facility of Manappuram Home Finance Pvt Ltd (MHF). The rating reflects managerial and financial support received from the parent Manappuram Finance Ltd and adequate capitalisation.
According to the rating agency, MHF is adequately capitalised for the expected scale of business following infusion of capital of ₹55 crore in 2016 fiscal, taking its total paid up capital to ₹100 crore.
Additional infusions are expected to support capital adequacy and keep the gearing at around five 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.
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