ICRA has upgraded the long-term rating assigned to the Rs 4,000-crore non-convertible debentures of Indiabulls Housing Finance Ltd (IBHFL) to “AA+ with stable outlook” from “AA with stable outlook.”

The rating revision reflects a steady improvement in IBHFL’s operational and financial indicators over the past few years amidst tight control over asset quality indicators, the credit rating agency said in a statement.

The rating also factors in the comfortable capitalisation and demonstrated ability to raise capital, well-diversified resource profile, and sound liquidity position with the policy of maintaining adequate liquid funds in the company, it added.

IBHFL’s assets under management increased by around 20 per cent during FY14 to Rs 41,169 crore. The share of the mortgage book was marginally higher at 74 per cent as in March 2014 from 72 per cent as in March 13.

ICRA said the company has stopped disbursement in its commercial vehicles segment, which accounted for 5 per cent of the portfolio as in March 2014 (7 per cent as in March 2013). The balance 21 per cent of the portfolio pertains to commercial credit (CC) comprised of lease rental discounting (LRD) loans to builders (69 per cent of CC), construction finance (25 per cent of CC) and other loans (mainly working capital loans) forming 6 per cent of the CC book.

The company’s asset quality indicators remained stable with Gross NPA of 0.83 per cent as in March 2014 (0.79 per cent as in March 2013).

During FY14, the company faced stress in its commercial vehicle portfolio in line with the experience of the entire CV financing industry. However, the impact on IBHFL was limited as the commercial vehicles portfolio accounted for just about 5 per cent of the total AUM.

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