The credit rating agency has also assigned its 'CRISIL AA+/Stable' to the perpetual debt of Poonawalla Fincorp (PFL). CRISIL Ratings has reaffirmed the ratings on the existing debt instruments and bank facilities of PFL.
CRISIL said that the rating is driven by the strategic importance of PFL to Cyrus Poonawalla Group. This is in line with the group's focus on domestic consumption as a key theme in their growth philosophy. Post the divestment of Poonawalla Housing Finance (PHFL), PFL 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.
The rating also reflects the improvement in the standalone profile of the company marked by steady scale up of the loan book with diversified product offering, healthy capitalization metrics, improving earnings profile and healthy resource profile marked by competitive cost of funds.
Post-acquisition of Magma Fincorp Limited (MFL) by the Cyrus Poonawalla Group, the new management of PFL revised its product strategy, targeting good quality, credit-tested, mass-affluent retail consumers, and small businesses in semi-urban/urban locations. As on 31 March 2023, the company reported an AUM (assets under management) of Rs 16,143 crore, as against Rs 11,765 crore as on 31 March2022, and Rs 10,563 crore as on 31 March 2021.
The total disbursements have gathered momentum in fiscal 2023 towards the new segments and registered a YoY growth of 109% (aggregate Rs 15,751 crores for fiscal 2023).
As on 31 March 2023, GNPA and NNPA remained at 1.44% and 0.78%, respectively. However, given the change in the portfolio strategy, the loan book lacks seasoning and ability to scale up portfolio whilst maintaining asset quality metrics will remain a key monitorable.
Poonawalla Fincorp has a diversified product offering in consumer and MSME finance including personal loans, loans to professionals, business loans, consumer loans, loan against property, pre-owned car loans, supply chain finance, machinery, and medical equipment loans.
The company's consolidated net profit jumped 100.9% to Rs 179.95 crore on 39.9% rise in total income to Rs 599.25 crore in Q4 FY23 over Q4 FY22.
The scrip shed 0.06% to currently trade at Rs 347.10 on the BSE.
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