Piramal Capital & Housing Finance Limited (PCHFL), the wholly owned subsidiary of Piramal Enterprises Limited, has received an upgraded rating of AA+ (Stable) from AA (Positive) by ICRA (an affiliate of Moodys) for its Long-Term Bank Lines, Non-Convertible Debentures and Sub-Ordinate (Tier-II) Bonds.
The rating upgrade takes into account the healthy ramp-up in financial services business with increasing diversification of its asset base while maintaining favourable asset quality supported by robust risk management practices at PCHFL. The rating upgrade also factors in the gradual scaling up of the home-loans portfolio which is expected to improve the diversity in the overall loan book which had hitherto comprised of wholesale loans.
This rating also draws comfort from the Group’s expertise in real estate given its presence across the value chain, as well as the strong leadership team, strong systems and processes. ICRA has also reaffirmed the short term rating of A1+ for the commercial paper programme. This reinforces a trend of strong revenue growth coupled with revenue diversification and robust risk management metrics.
Mr. Khushru Jijina, Managing Director, Piramal Capital & Housing Finance said, “Our existing relationships with our counterparts across sectors, the financial flexibility arising out of being a part of the Piramal Group and strong management team with prior experience in retail lending are the key drivers of this rating upgrade. With a goal to increasing diversification and granularity across our lending business, the company will continue to grow profitability, raise funds at competitive rates and maintain healthy asset quality.”
PCHFL’s strong capitalisation profile supported by the sizeable capital infusion by the promoter group, provides it with enhanced financial flexibility and adequate head-room for growth over the near to medium term and the increasing prominence of financial servicing business for the Piramal Group.