“Brickwork Ratings (BWR) reaffirmed the long-term ratings for bank loan facilities of Rs1150cr and bonds of Rs791.24cr of TFCI at BWR A+ while maintaining the rating outlook as Negative. BWR has withdrawn the ratings of the bond issues of Rs50cr of TFCI on account of complete redemption. The rating is withdrawn based on the request of the company and confirmation from the Debenture Trustee towards redemption, and the same is in line with BWR’s withdrawal policy,” the company shared Brickwork Ratings rationale on Tuesday.
It further said, the rating continues to draw comfort from the experienced management, healthy capitalisation and comfortable liquidity. The rating is, however, constrained on account of the average asset quality with the GNPA (Gross Net Performing Assets) levels increasing from 2.50% in FY20 to 3.51% in FY21, current level of provisioning (overall provisions are at 1.58% at the end of FY21 vis-a-vis 1.71% at the end of FY20) especially in view of a possible further deterioration in asset quality and borrower concentration risk with top 20 borrowers constituting 59.66% of the portfolio at the end of FY21.
The Negative outlook reflects the risk of delay in collections and the consequent impact on asset quality due to the second wave of the Covid-19 pandemic, especially considering that 64.40% of the company’s portfolio at the end of FY21 comes from the tourism and travel segment, which has been severely impacted by Covid-19. Any deterioration in asset quality, credit costs on account of provisioning and write-offs, and the consequent impact on profitability will be key rating monitorables.
At around 1.20 PM, Tourism Finance Corporation of India Ltd was trading flat at Rs75.95 on the BSE.