Poonawalla Fincorp sees rating upgrade

Mumbai: Poonawalla Fincorp’s (PFL’s) long-term ratings have been upgraded to AAA from AA+. The upgrade takes into account increased strategic importance of PFL to Cyrus Poonawalla Group, whose flagship company Serum Institute also has a triple-A rating.

The group has been focusing on domestic consumption as a key theme in its growth philosophy, and after the divestment of Poonawalla Housing Finance (PHFL), PFL will play a key role in implementing this strategy.

The rating upgrade also reflects the improvement in the standalone profile of the company, marked by a steady scale-up of the loan book with a diversified product offering, healthy capitalisation metrics, improving earnings profile, and a healthy resource profile marked by competitive cost of funds, Crisil said.

“The rating upgrade testaments our business model and relentless focus on executing the stated strategy to build a strong foundation for a long-term sustainable leadership position in the industry. The upgrade would help strengthen our liability franchise, optimise borrowing cost, and accelerate our growth journey,” said PFL MD Abhay Bhutada.

Last year, Magma Fincorp (MFL) was acquired by Cyrus Poonawalla Group, which rechristened the company. The new management revised its product strategy, targeting good quality, credit-tested, mass-affluent retail consumers and small businesses in semi-urban/urban locations.

As of December 31, 2022, the company reported an assets under management (AUM) of Rs 13,929 crore, which increased to around Rs 16,120 crore as of March 31, 2023.