The agency upgraded HLF’s long-term rating to “CARE AA (Double A), Stable.” This rating embraces long-term bank loans, non-convertible debentures, market-linked debentures and subordinated debt.
The rating action factors in HLF’s experienced management team, improved capitalisation levels and the firm’s demonstrated ability to raise funds to support business growth, the company said in a statement. CARE also considered the firm’s diversified product profile, geographically-diversified loan portfolio, and relatively diversified funding profile, the statement added.
The rating upgrade also considers the significant increase in the scale of operations and the improvement in asset quality and profitability parameters on a sustained basis.
“The current rating upgrade by CARE to AA (Double A) signifies our ability to navigate the business through challenging times based on a deep understanding of the asset classes we have a presence in. The rating upgrade reaffirms the organization’s strength, leadership, and financial & operational excellence,” said Sachin Pillai, managing director and chief executive officer of Hinduja Leyland Finance.
HLF is undergoing a reverse merger, which will help it get listed in the near future. The company also mobilised Rs 910 crore of fresh capital from Qualified Institutional Buyers (QIBs) in October 2022, and improved its capital adequacy. With the equity infusion, the tier-I capital adequacy is expected to rise by about 5 per cent.” Going forward, consequent to the merger, the firm’s net worth is expected to improve further. The recent capital infusion supports AUM growth over the medium term in the existing business segments,” it said.