Poonawalla Fincorp Ltd, formerly known as Magma Fincorp Ltd, on Tuesday informed that ratings agency CRISIL Ltd. has upgraded the non-banking finance company’s long-term rating.

Share Market Live

NSE

CRISIL Ratings has upgraded its rating on the long-term bank facilities and non-convertible debentures of Poonawalla Fincorp to ‘CRISIL AAA/Stable’ from ‘CRISIL AA+/Stable’. The rating on commercial paper has been reaffirmed at CRISIL A1+.

CRISIL Ratings said that the rating action is driven by the increased strategic importance of Poonawalla Fincorp to the Cyrus Poonawalla Group.

The ratings agency noted that the group’s focus on domestic consumption has emerged as a key theme in its growth philosophy.

“Post the divestment of Poonawalla Housing Finance Ltd, Poonawalla Fincorp will play a key role through which this strategy will be implemented in the areas of interest of the group i.e., consumer and MSME (micro, small and medium enterprises) financing through tech-driven lending,” Crisil said in its ‘Rating Rationale’ note on Poonawalla Fincorp.

The agency said that the rating action also reflects the improvement in the company’s standalone profile marked by steady scale-up of its loan book.

As per Poonawalla Fincorp's March quarter business update, the NBFC’s assets under management (AUM) increased by 16 percent quarter-on-quarter and 37 percent year-on-year to reach Rs 16,120 crore as on March 31, 2023.

CRISIL Ratings also noted that the company has improved its resource profile and funding costs as evidenced by borrowings from the market/banks at competitive interest rates after its acquisition by the Cyrus Poonawalla Group.

Adar Poonawalla-led Rising Sun Holdings had acquired a controlling stake in Magma Fincorp for Rs 3,456 crore in February 2021. After the acquisition, the new management revised its product strategy, targeting good quality, credit-tested, mass-affluent retail consumers, and small businesses in semi-urban/urban locations.

Shares of Poonawalla Fincorp are trading 0.5 percent higher at Rs 316.40.