CRISIL has upgraded its long-term rating on the bank facilities and debt instruments of Muthoot FinCorp to ‘CRISIL AA-.
It has also upgraded the ratings of Muthoot Microfin Ltd, Muthoot Capital Services Ltd and Muthoot Housing Finance Company Ltd, to A+.
Thomas John Muthoot, Chairman of Muthoot Pappachan Group, said these upgrades are driven by improvement in the capitalisation profile and expected improvement in the earnings profile of MPG.
The capital infusion supported the capitalisation profile at both Muthoot FinCorp and Muthoot Microfinance. Consequently, the net worth at the consolidated level increased to an estimated ₹4,393 crore in Q1 2022 as compared to ₹3,595 crore in fiscal 2021.
MFL’s standalone profitability has steadily improved in the past 2-3 fiscal, as evidenced by the standalone return on managed assets. This improvement is backed by increasing branch productivity and a steady reduction in operating costs while maintaining overall low credit costs.
The rating continues to reflect MFL’s healthy performance and strong market position in the core gold loan portfolio, as indicated by steady growth in assets under management and sound asset quality, despite the challenges created by the Covid pandemic.
Thomas John Muthoot also said all these are attributed to the continued trust of the growing number of customers in the group companies’ capability to offer a variety of quality products and services at competitive costs with the backup of advanced technologies. Considering this, he said that the group companies look forward to improved growth prospects in the coming quarters.