Fitch Ratings has today assigned Goldman Sachs (India) Finance Pvt. Ltd. (GIFL) a National Long-term rating of 'AAA(ind)'. The agency has simultaneously assigned GIFL's INR5bn long-term debt programme a National Long-term rating of 'AAA(ind)'. The Outlook is Stable. Fitch has also affirmed GIFL's INR10bn commercial paper programme at 'F1+(ind)'.
GIFL's ratings reflect Fitch's expectation of continued support from and close linkages with its parent company, The Goldman Sachs Group, Inc (GS; 'A+'/Negative/'F1+'). GIFL is 100% owned by GS through an intermediate holding structure. Its operations are integrated with that of GS's global policies, systems and management. GIFL's National rating is entirely dependent on support from its parent as GIFL is a start-up entity.
Given GIFL's low internal accruals - a result of its start-up status and higher loan loss provisions, the company will require further capital infusions in the next two years to scale up its business, particularly with the high concentration risk in its business.
Fitch has been informed that GIFL plans a matched asset and liability profile, with cash outflows being funded in advance.
GIFL was formed after GS acquired Pratham Investments and Trading Private Limited in FY09 for a non-banking finance company licence. Promoter financing (asset backed) and underwriting as well as trading of bonds would form the major part of GIFL's balance sheet. Other services offered by GS in India include investment banking and institutional broking.