ICRA Affirms BBB Credit Rating with Stable Outlook to CASHe Owned NBFC
India’s leading credit-led, AI-driven financial wellness platform, CASHe, today announced that its wholly-owned NBFC, Bhanix Finance & Investment Ltd. (BFIL) has been assigned a [ICRA] BBB (Stable) credit rating from ICRA. The rating covers NCD / MLD / CP and bank facilities and is for an amount of Rs. 1025 crores. Instruments with [ICRA] BBB are considered to have a moderate degree of safety regarding the timely servicing of financial obligations. The company stated that it considers these investment-grade ratings from ICRA as supportive of its financing strategy and is committed to maintaining an investment-grade rating.
To arrive at the ratings, ICRA has taken a consolidated view of the credit profiles of BFIL and its holding company, Aeries Financial Technologies Private Limited (AFTPL), given their business linkages, common management, and operational synergies. BFIL provides short-term unsecured personal loans to salaried individuals through the technology platform, CASHe, with its competence reflected in the low turnaround time and the fully digitised process.
Adequate capitalisation: The rating factor in BFIL’s adequate capitalisation for the current scale of operations. Over the last five years till FY2022, BFIL has received equity of Rs. 260 crores from AFTPL with the last equity infusion of Rs. 142 crores in FY2022. AFTPL has received equity funding from the promoters/promoter-owned entities. Further, it has reported a consolidated net profit over the last three years till FY2022 that has added to its capital buffer.
Profitability supported by higher yields – At the consolidated level, AFTPL reported a net profit during the last three years (FY2020-FY2022). With the improved scale of operations and the moderation in credit costs, the return on average managed assets (RoMA) and return on equity (RoE) have improved. ICRA noted in its report that BFIL’s profitability is supported by higher lending yields and net interest margins (NIMs), which remained adequate to cover the operating expenses and credit costs.
Liquidity position – BFIL’s liquidity position is adequate with no negative cumulative mismatches in the asset-liability management (ALM) statement as on September 30, 2022, owing to the short tenure of the loan book. BFIL’s borrowing is largely dominated by non-banks with a share of 49% of the total borrowings. The share of banks stood at 25% while debentures accounted for 24% of the total borrowings as on September 30, 2022. BFIL has increased its funding relationships to more than 30 lenders as on September 30, 2022, from 7 as on March 31, 2018.
Mr. Dhruv Jain, Chief Executive Office, BFIL, said, “ICRA’s rating is an important milestone for CASHe. In addition, this investment grade rating from ICRA demonstrates a reaffirmation of a unanimous vote of confidence in the company’s diversified business model, positive credit profile, and high standards of corporate governance practices. ICRA’s investment grade rating provides assurance in double measure to the stakeholders of the company who have always reposed faith in our conservative and robust financial policies. The rating will greatly assist in our fundraising plans and enable us to enhance BFIL’s prestige in the capital markets. The investment grade rating is a validation of our vision and essential for us in our continued commitment to the path of excellence,” he concluded.
A detailed release on the rating can be found here.
Bhanix Finance and Investment Limited (BFIL) was incorporated in 1996 as a non-banking financial company (NBFC) registered with the Reserve Bank of India (RBI). Aeries Financial Technologies Private Limited (AFTPL) acquired a 100% stake in BFIL in 2017. TSLC Pte Ltd. (TSLC), a Singapore-based company, had a 51% stake in AFTPL as on March 31, 2022, while the balance was held by other promoter-owned entities and other investors. TSLC developed a digital lending platform called CASHe in 2017 and owns all the intellectual property and technology related to CASHe. TSLC has digital lending operations through different operating entities in India, Bangladesh, and Dubai. Through its digital lending platform, CASHe, BFIL provides a wide variety of credit products such as short-term unsecured personal loans, credit lines and BNPL to salaried individuals Its competence lies in the low turnaround time and the fully digitised loan process. BFIL focuses on new-to-credit borrowers and borrowers not getting loans from banks.