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MUMBAI : S&P Global Ratings has affirmed its issuer and issue credit ratings on four Indian non-bank finance companies: Bajaj Finance Ltd, Hero FinCorp Ltd, Manappuram Finance Ltd and Muthoot Finance Ltd.
The rating outlooks on these companies remain unchanged, it said.
“The affirmations follow a revision to our criteria for rating banks and non-bank financial institutions and for determining a Banking Industry Country Risk Assessment (BICRA). Our assessments of economic risk and industry risk in India remain unchanged at '7' and '5', respectively. These scores determine the BICRA and the anchor, or starting point, for our ratings on financial institutions that operate primarily in India," the rating agency said.
The starting point--or anchor--for its ratings on non-bank financial institutions in India remains 'bb-'. The anchor is two notches below the 'bb+' anchor for India banks to reflect its view that Indian finance companies face greater industry risk than banks because the finance companies generally have no access to central bank funding.
“While regulations for finance companies are tightening, the sector remains subject to less-onerous regulations than banks, notwithstanding some requirements on capital adequacy, liquidity, and asset quality management. Several finance companies in India have created strong niches, domain expertise, and economies of scale to support revenue stability and mitigate competitive pressure," it said.
In addition, the stand-alone credit profiles (SACPs) of the four finance companies and its assessment of the likelihood of extraordinary external support remain unchanged under our revised criteria, it said.
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