Crisil has reaffirmed Chaitanya India Fin Credit Pvt Ltd’s (CIFCPL) ‘A-/Stable’ rating on its bank loan facilities of ₹500 crore (enhanced from ₹250 crore). The credit rating agency said the rating is driven by the strong capital position of Chaitanya Group post the acquisition of a majority stake in CIFCPL by Sachin Bansal in October 2019 through CIFCPL’s holding entity, Chaitanya Rural Intermediation Development Services Private Limited (CRIDS).
Bengaluru-headquartered CIFCPL is registered with the RBI as an NBFC-microfinance institution. Bansal, who holds 96 per cent stake in Chaitanya Group (CIFCPL and CRIDS together), will be maintaining this investment through his venture, Navi Technologies Pvt Ltd (Navi), in which he holds 100 per cent stake, it added.
Bansal has infused ₹900 crore of equity capital in Chaitanya Group till date; of this, ₹300 crore has been infused in March 2020. This equity infusion has strengthened Chaitanya Group’s overall capital position considerably, with consolidated networth estimated at over ₹1000 crore as on March 31, 2020, Crisil said in a statement.
Furthermore, the additional funding commitment given by Navi would aid Chaitanya Group’s growth plans over the medium term.
“The rating also factors in the long track record of CIFCPL and experience of the promoters in the microfinance business, stable asset quality in microfinance segment post-demonetisation, and improving resource profile.
“These strengths are offset by moderate, though improving profitability, constrained by high operating expenses, heightened susceptibility to local socio-political issues due to regional concentration in operations, and limited vintage in the overall non-microfinance segment,” the agency said.
Having been operational for more than 13 years now, Crisil said Chaitanya Group had consolidated Assets Under Management (AUM) of ₹894 crore as on January 31, 2020, of which, over 90 per cent comprises microfinance loans.