CRISIL has reaffirmed the highest rating, A1+ to Piramal Capital and Housing Finance Ltd. (PCHFL) for Commercial Paper Programme worth Rs.10,500 Crores. CRISIL has evaluated the business and financial risk profile of the overall financial services business, and also factored the managerial and financial risk profile of the holding company, Piramal Enterprises Limited’s (PEL) lending book.
PCHFL welcomes these topmost ratings as it reaffirms the Company’s robust business portfolio, diversified revenue streams and established a presence across the spectrum of real estate financing along with increased product offerings. Over the last nine months, in line with our efforts to improve the asset-liability profile, ever since the first signs of liquidity strain emerged in the Indian market, the Company has raised funds of INR 23,700 Crores.
CRISIL in its report stated that “the company has put in place adequate credit appraisal, strong risk management, and processes, which has supported the reported asset quality metrics. The management too has taken steps in order to reduce concentration risk in the portfolio with a focus on growing the individual housing loan portfolio. But, what has really supported the asset quality metrics in the past, has been the ability of the entity to get timely repayments/exits via refinancing. In fiscal 2019, in addition to a regular Rs 3,601 crores of collections, the Group has also received prepayments to the tune of Rs 13,483 crores. For some of the loan accounts, the group has received prepayments covering the scheduled repayments over the next 12-24 months.
The report stated that on a standalone basis, the resource profile for PCHFL is well diversified across instruments with bank and financial institutions loans at 61%, NCDs constituting around 24% and Commercial Papers at 16% as on March 31, 2019. The management is also taking proactive steps to improve the resource profile mix through increasing long-term funding sources. The Company has managed a sanction of Rs 1,050 crores (USD 150 million) of ECBs in the first quarter of fiscal 2020 and also plans to raise additional long term funds in the current fiscal, which would support the diversification into longer-term funding sources.”
CRISIL has recently also assigned the highest rating A1+ to PEL for the short-term non-convertible debentures amounting to Rs 1500 crores and the commercial paper program amounting to Rs. 12,000 crores by (PEL).
The Company reiterates its commitment towards maintaining adequate capital and liquidity, further diversifying its loan book, tapping additional sources of long-term funds and maintaining robust asset quality.