Crisil assigns high safety stable grade to Muthoot Finance

Ratings firm Crisil has upgraded Muthoot Finance's long-term debt rating to a high safety grade of AA/stable from AA-/stable earlier.
Under Crisil scale, AA rating will fall under high safety category and carries very low credit risk.
Long-term debt rating covers debt instruments of above one year whereas short term-debt rating is for debt instruments of up to one year.
"The upgrade reflects the resilient business risk profile of Muthoot Finance as demonstrated in the past few years during which the gold loan sector went through challenging times and the company's strong earnings profile", Crisil was quoted in the Muthoot Finance release.

The rating upgrade also factors in a stable operating environment with an established regulatory regime, according to Crisil's rationale behind the improvement.
"The rating upgrade is a reflection of the improved FY16 performance and the consistent performance in spite of industry going through turbulent times in the last four years", said George Alexander Muthoot, Managing Director, Muthoot Finance.

"We hope this upgrade will enable us to get better rates from financial institutions and banks enabling us to reduce our cost of borrowings", he added.
Kerala-based non-deposit taking NBFC, Muthoot Finance, is one of the leading gold financing companies in India in terms of loan portfolio.

Muthoot Finance stock closed 1.32 per cent lower at Rs 288.50 on BSE.