ICRA has upgraded its rating on the long-term debt instruments of Aditya Birla Finance Ltd. (ABFL) & Aditya Birla Housing Finance Ltd. (ABHFL), the lending businesses under Aditya Birla Capital Ltd, to ‘ICRA AAA’ from ‘ICRA AA+’. Instruments with this rating are considered to have the highest degree of safety regarding timely servicing of financial obligations. Such instruments carry lowest credit risk. ABFL and ABHFL are already rated AAA by India Ratings.
The rating upgrade of ABFL reflects the strong ultimate parentage of Grasim Industries Limited and the strategic fit and importance of ABFL for the Aditya Birla Group, which is demonstrated in the strong capital, operational and managerial support from the parent. The ratings also consider the improved diversity in the company’s lending book and management’s vast experience in the financial services domain. The ratings factor in the company’s strong risk management systems and processes, its robust profitability indicators, comfortable asset quality indicators, diversified funding profile and adequate capitalization for the current scale of operations.
The rating upgrade of ABHFL considers the company’s ability to expand its portfolio while maintaining healthy asset quality and strong parentage along with robust risk management system and a well-diversified funding profile.
Rakesh Singh, CEO, ABFL; & Director ABHFL commented on the upgrade stating, “ICRA’s highest rating of ‘ICRA AAA’ for ABFL & ABHFL’s long term facilities is a very important milestone for our businesses. It is an affirmation of our track record and systems. With a diversified product base for various customer segments ranging from Retail, MSME, HNIs and Corporates across various geographies, we are well positioned to cater to the needs of many customer segments. This rating upgrade will enable us to optimise cost of borrowings and will further widen our lenders base.”