Crisil Ratings assigns 'A1+' rating to commercial paper of Muthoot Microfin

The rating on the long-term bank loan facilities and non convertible debentures has been reaffirmed at 'Crisil A+/Stable'.

Crisil Ratings stated that the ratings continue to factor in expectation of continued support from the parent, Muthoot Fincorp (MFL). It also takes into consideration MML?s adequate capital position and its diversified resource profile.

These strengths are partially offset by geographical concentration in the loan portfolio, moderate asset quality and susceptibility of the microfinance sector to regulatory and legislative changes.

MML?s portfolio quality has been affected in line with several issues faced by the sector over the last 3-4 quarters. However, overall asset quality (in terms of collections) has started showing some stability, particularly during the fourth quarter of fiscal 2025. Crisil Ratings believes that despite some early signs of improvement in collections, the company?s ability to show substantial improvement in portfolio quality will be closely monitored.

The company remained well-capitalised, as reflected by networth of Rs 2,632 crore and gearing of 3.0 times as on 31 March 2025 (Rs 2,804 crore and 3.0 times, respectively, as on 31 March 2024). Capital position of the company also benefits from its strong parentage, which enables it to raise funds in a timely manner.

Muthoot Microfin (MML), a part of Muthoot Pappachan Group (MPG), provides microfinance loans to women. MML had AUM of Rs 12,356 crore and networth of Rs 2,632 crore as on 31 March 2025. Operations of the microfinance division are spread across Kerala, Tamil Nadu, Puducherry, Karnataka, Maharashtra, Gujarat, Haryana, Rajasthan, Uttarakhand, Madhya Pradesh, Uttar Pradesh, Odisha, West Bengal, Punjab, Chhattisgarh, Jharkhand, Bihar, Himachal Pradesh and Telangana.

The scrip rose 0.83% to trade at Rs 127.4 on the BSE today.

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