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CARE Ratings has upgraded ratings on various debt instruments of Muthoottu Mini Financiers Ltd to BBB+ (Stable) from (BBB Stable).
Muthoottu Mini registered a growth of 18 per cent for the financial year 2020-21. The company, during FY 20-21, mopped up ₹700 crore through listed public non-convertible debenture issues. Further, it posted excellent organic growth, adding four more lending banks during the period. As many as 23 branches and five zonal offices were added during the financial year.
Mathew Muthoottu, Managing Director, Muthoottu Mini, said, “We at Muthoottu Mini Financiers consider this upgrade in ratings as an indication that the company is growing in the right direction. This could not have been possible without the unstinted support of our customers. This upgrade will further enable us in widening our reach both in corporate and retail sectors. We believe that our commitment is to provide support to fulfil the financial needs of our customers.”
Muthoottu Mini Financiers eyes 100 new branches, increasing booksize by ₹1,500 cr this FY
The total CAR and Tier I CAR of the company stood at 25.75 per cent and 22.38 per cent respectively, as on March 31, with a noted increase in the scale of operations during the period.
Improvement in resource profile
The group has been maintaining a ROTA above 2.50 per cent on a sustained basis along with improvement in scale of operations and improvement in resource profile, with a good mix of borrowings from diversified sources. MMFL has registered improvement in interest spread of 0.82 per cent in FY21 as compared to previous year, by reducing the cost of borrowings and operating expenses with increased AUM per branch.
CARE Ratings incorporates ‘Association of Indian Rating Agencies’
Backed by one of the safest securities around i.e. gold, the loans are secure with good asset quality, according to the company. The proportion of gold loans having tenure up to six months increased from 1 per cent as on March 31, 2020, to 81 per cent as on March 31, 2021, which allows the company to keep price volatility in check. Gross NPA and Net NPA have been reduced to 0.86 per cent and 0.75 per cent as on March 31, 2021 as against 1.89 per cent and 1.34 per cent as on March 31, 2020.
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