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India Ratings upgrades Can Fin Homes to ‘IND AA+’; Outlook Stable; Stock slumps 6.5%

For the Commercial paper programme of the company, IND A1+ rating has been affirmed.

December 17, 2021 3:22 IST | India Infoline News Service
Can Fin Homes
India Ratings has reviewed and upgraded Can Fin Homes Limited's long-term issuer rating to ‘IND AA+’ (from ‘IND AA’) while reaffirming the outlook as ‘Stable’.

The rating on the company’s Non-convertible debentures (NCDs) has been upgraded to IND AA+/Stable. On a subordinated debt of the company, the rating has been upgraded to IND AA+/Stable. For Commercial paper (CP) IND A1+ rating has been affirmed.

“The upgrade reflects the resilient performance exhibited by CFHL despite the pandemic-led disruptions in the operating environment. Furthermore, the company managed to grow its franchisee in spite of the challenging scenario and simultaneously maintained a strong control over its asset quality,” company shared Ind-Ra’s rating rationale.

It further said, Ind-Ra has also factored in CHFL's operational track record of more than three decades and its ability to grow the franchisee in an improved operating environment. CFHL has displayed its strength in raising funds at competitive rates of interest, which helped in appropriate pricing of the loans to stay competitive amid competition from banks and other housing finance companies (MFCs).

Ind-Ra has taken into consideration the moderation in the leverage due to lower growth in the loan book and has also factored in the healthy internal accruals, which could support further portfolio growth. CFHL's operating profit buffers have remained healthy across cycles. The return ratios have remained stable throughout due to steady net interest margin and optimum operational efficiency.

Towards close of trade on Friday, Can Fin Homes Ltd was trading at Rs549.35 per piece down by Rs38.5 or 6.55% from its previous closing of Rs587.85 per piece on the BSE.

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