CARE Ratings has upgraded the long-term credit rating of Manappuram Finance (MAFIL) to CARE AA (double A) stable from CARE AA- (double A minus) stable. The revised credit rating applies to the Rs. 56.80 billion long term bank facilities of the company and its NCD issues aggregating to Rs 5.80 billion.

A  press release issued by CARE Ratings said that the revision in the long term rating factors in the significant improvement in financial performance of the company during FY17, primarily supported by its focus on shorter tenure loans leading to lesser under recovery. The profitability in FY17 is also aided by growth in AUM and decline in the cost of borrowings in trend with industry.

The release noted the long track record and the established market position of MAFIL as one of the leading players in the gold loan industry in India, experienced promoters & management team, comfortable capitalization level and liquidity position and adequate risk management & management information systems in place. 

The ratings are, however, constrained by product concentration on a single asset class, exposure to price of gold, geographical concentration of the loan portfolio and moderation in asset quality during FY17 on account of transition from 120 dpd (days past due) to 90 dpd.

Earlier, on July 14, 2017, Brickwork Ratings had upgraded the long-term credit rating of Manappuram (Q,N,C,F)* Finance (MAFIL) to BWR AA (double A) stable from BWR AA- (double A minus) stable. The revised credit rating applies to the Rs 547.0 million NCD issue of the company.

Shares of the company gained Rs 2.95, or 3.44%, to trade at  Rs 88.80.  The total volume of shares traded  was  739,382 at the BSE (3.34 p.m., Monday).