Crisil revises Indiabulls HF's outlook to stable
Apr 02, 2021
Mumbai (Maharashtra) [India], Apr 2 : Crisil has revised its rating outlook on long-term debt instruments and bank facilities of Indiabulls Housing Finance Ltd (IBHFL) to stable from negative while reaffirming the rating at AA.
The rating on commercial paper programme and short-term non-convertible debenture programme has been reaffirmed at A1-plus.
The current revision reflects IBHFL's strengthened capital position and expected further capital mobilisation in the medium term, continued fund raising which has benefitted from various schemes announced by Reserve Bank of India (RBI) and the government of India, and the lower than expected inching up in IBHFL's non-performing assets (NPAs) in retail book.
The last year or so have also seen some correction in the share price of IBHFL, said Crisil.
From an asset quality perspective, while there is an uptick in gross NPA, it is lower than what was earlier envisaged. The reported and pro-forma gross NPA stood at 1.75 per cent and 2.44 per cent respectively as on December 31, 2020 (1.84 per cent as of March 31, 2020).
Furthermore, gross NPA in the housing loans and loans against property (LAP) segment together constituting 87 per cent of assets under management (AUMs) as on December 31, 2020 continues to remain at comfortable levels.
The collections have also picked up pace with overall collection efficiency at 98.8 per cent for the month of February which has almost reached pre-Covid levels. Crisil said the extent of one-time debt restructuring under the Covid-19 relief scheme has been also limited and was around 1 per cent of the AUM.
However, asset quality in commercial credit comprising of construction finance and lease rental discounting based loans to real estate developers continues to remain vulnerable with any slippages negatively impacting overall asset quality given the chunky nature of this segment.
While proportion of commercial credit exposures in total AUM has reduced to 13 pr cent as on December 31, 2020 from 21 per cent as on March 31, 2018, its performance will remain a key monitorable.
During fiscal 2021, said Crisil, IBHFL further strengthened its capital position. It raised Rs 683 crore equity via qualified institutional placement and also accrued Rs 1,988 crore by selling bulk of its investment in OakNorth Bank.
With this, the overall capital adequacy ratio for the company increased to 30.5 per cent as on December 31, 2020 from 27.1 per cent as on March 31, 2020.
Adjusted gearing has also come down to 5 times as on December 31, 2020 from 6.2 times as on March 31, 2020. It is also expected that there will be further capital raise of at least 300 million dollars over the medium term.
