Fitch takes rating action on four Indian NBFIs after pandemic-impact review

Mumbai (Maharashtra) [India], September 22 : Fitch Ratings has taken rating action on the long-term issuer default ratings of four Indian non-bank financial institutions (NBFIs) in light of the companies' performance amid the coronavirus pandemic.
IIFL Finance's B-plus rating has been maintained on rating watch negative. Manappuram Finance has been affirmed at BB-minus with rating watch negative removed and outlook stable.
Muthoot Finance has been affirmed at BB with rating watch negative removed and outlook stable while Shriram Transport Finance Company has been affirmed at BB with rating watch negative removed and outlook negative.
The companies' long-term issuer default ratings were placed on rating watch negative in March as Fitch expected the pandemic to present further macroeconomic and funding challenges for the entities, heightening downside risk to their credit profiles.
Indian NBFI borrowings are typically secured and Fitch believes non-payment of senior secured debt will best reflect an unsecured failure of the entities.
NBFIs can issue unsecured debt in the overseas market but such debt is likely to constitute a small portion of their funding and thus cannot be viewed as their primary financial obligation.