CRISIL Ratings stated in its rating statement: “The upgrade is driven by Muthoot Finance’s proven ability to profitably grow its core gold credit business while maintaining its strong financial risk profile.”
The rating justification also states that “An established track record and brand name in the gold finance industry, strong capitalization and profitability among the best in the industry that is expected to stay healthy are the strengths of Muthoot Finance Ltd.
Switching from ‘AA’ to ‘AA +’ means reaching the highest rank in the category and that rating is only one notch below the ‘AAA’ rating, the highest rating for long-term debt. The rating stands for “high security” and “instruments with this rating are given a high degree of security with regard to the timely servicing of financial obligations. Such instruments have very little credit risk. ‘
This rating upgrade will allow the company to raise more long-term debt capital and attract a greater number of investors. This upgrade may attract further retail investment in the public issue of NCDs, where the company has a track record of 24 issues with a cumulative Rs 17,392 crore. In addition, the company will be able to raise funds at much more competitive prices.
George Alexander Muthoot, Managing Director, “That’s someone else
A golden pen in Muthoot Finance’s cap and recognition of its leading and long-standing track record in the gold lending business. With this rating upgrade
has become one of the few NBFCs to have achieved this level of assessment on their own without parental assistance in the assessment