Moody's Investors Service, Fitch Ratings give stable outlook to IIFL

Moody's Investors Service and Fitch Ratings have given a stable outlook to the credit ratings of India Infoline Finance Ltd (IIFL), according to a regulatory filing on Tuesday.

The agencies have assigned ratings to the company.

Moody's Investors Service has assigned a first-time Ba3 corporate family rating to India Infoline Finance Ltd.

Moody's Corporate Family Ratings (CFR) are opinions on a corporate family's ability to honour all of its financial obligations.

The global ratings firm has also assigned (P)Ba3 long-term foreign and local currency senior secured ratings to the company's USD 1 billion Euro Medium-Term Note (EMTN) programme, according to the regulatory filing. It added that the outlook is stable.

On the ratings rationale, Moody's said it is driven by the company's stable and healthy solvency profile, including its asset quality, profitability and capital.

Meanwhile, Fitch Ratings has assigned long-term issuer default rating (IDR) of 'BB-' to IIFL. It also kept the the outlook stable.

'BB-' denotes elevated vulnerability to default risk.

The agency has also assigned a 'BB-' rating to IIFL's USD 1-billion medium-term note (MTN) programme

IIFL reported a 78 per cent rise in its consolidated net profit to Rs 193 crore for the December 2019 quarter.

Incorporated in 2004, the mid-sized retail finance company targets low-ticket retail loans such as home, business, gold and micro finance in semi-urban and rural areas of the country. Such assets represented 86 per cent of its total assets under management (AUM) at 31 December 2019.

Moody's Investors Service said about 14 per cent of IIFL's loans are exposed to riskier segments, including small and mid-corporate segments, in the form of loans to developers (13 per cent) and loans for capital market activities (1 per cent).

"Despite the tight funding conditions, India Infoline Finance has managed to proactively diversify its funding to more stable and long-dated funding sources, such as term loans from banks and non-convertible debentures," Moody's said.