Kotak Mahindra Finance's rating upgraded

The AA (Double A) rating assigned to the non-convertible debenture issues of Kotak Mahindra Finance (KMFL) has been upgraded to AA plus (double A plus). The FAA plus (F Double A plus) rating assigned to the fixed deposit programme of KMFL has also been upgraded to FAAA (pronounced F Triple A). A P1 plus rating has been assigned to the Rs. 550 crore short-term debt programme (enhanced from Rs. 250 crores) of KMFL.

The upgradations reflect the improved risk profile of KMFL arising from the increased diversity of its business mix and the drag arising from the old non performing loans in its corporate lease and hire purchase exposures having been addressed. KMFL's ratings continue to reflect the company's conservative financial profile characterised by low gearing levels, strengths in resource mobilisation and the inherent value of its strategic investments These strengths are partly offset by the inherent risks associated with some of the company's activities like capital market financing and consumer financing.

As on March 31, 2000 KMFL had an asset base of Rs. 1,180 crores and the company reported a profit after tax of Rs. 61.10 crores for 1999-2000. The business mix of the company is well diversified and includes commercial vehicle financing, consumer finance, corporate finance, capital market financing and the asset reconstruction division. As at March 31, 2000 the net worth of KMFL stood at Rs. 475 crores and the gearing was 1.27 times.

Send this article to Friends by E-Mail

Section  : Business
Previous : Finolex's NCB gets AA minus
Next     : AAA for BHEL