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| Product | Quantum (Rs. Cr) | Long Term Rating | Short Term Rating |
| Bank Loan Ratings | 450.00 | ACUITE A | Stable | Reaffirmed | - |
| Total Outstanding | 450.00 | - | - |
| Total Withdrawn | 0.00 | - | - |
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Rating Rationale |
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Acuité has reaffirmed its long-term rating of ‘ACUITE A’ (read as ACUITE A) on the Rs. 450.00 Cr. bank facilities of KERALA STATE INDUSTRIAL DEVELOPMENT CORPORATION LIMITED (KSIDC). The outlook is 'Stable' Rationale for the rating The rating reaffirmation factors in KSIDC’s growth in AUM which stood at Rs. 1882.26 Cr. as on March 31, 2025 (Prov) from Rs. 1667.24 Cr. as on March 31, 2024 and healthy capitalization levels marked by net worth of Rs. 1348.24 Cr. as on March 31, 2025 (Prov) from Rs. 1225.13 Cr. as on March 31, 2024. The rating continues to factor in Government of Kerala’s (GoK) support and KSIDC’s strategic importance in the development of physical and social infrastructure required for industrial growth in the state. The rating factors in KSIDC’s role as a nodal agency for foreign and domestic investments in Kerala. The rating also factors in the healthy PAT levels of KSIDC which stood at Rs. 58.26 Cr. in FY2025 (Prov) as compared to Rs. 71.83 Cr. in FY2024. KSIDC also have maintained significant cash reserves in the form of fixed deposits amounting to Rs. 115.00 Cr. in FY25 (Prov). The rating is however constrained with high levels of GNPA’s of KSIDC. The corporation’s GNPA as on March 31, 2025 (Prov) stood at 14.61 percent as compared to 12.50 percent as on March 31, 2024. KSIDC’s ability to continue to demonstrate growth in loan assets while containing asset quality risks will be key credit monitorable. |
| About the company |
| KSIDC was incorporated in 1961, by Government of Kerala (GoK) with the objective of facilitating and financing medium to large scale industries in the State. KSIDC offers financial assistance and support to service sectors like tourism, star category hotels, resorts, hospitals, infrastructure projects etc. In addition to project financing, KSIDC is also involved in creation of infrastructure facilities and investment promotion activities in the State. At present, KSIDC has 3 Industrial Growth Centres and 2 industrial parks in various parts of the State. Government of Kerala has 100 per cent holding in KSIDC. The head office of the Corporation is at Thiruvananthapuram and the Branch office is operated at Cochin and Calicut. KSIDC provides services across all districts in Kerala. KSIDC is categorized as a Systemically Important Non-Deposit taking NBFC (NBFC-ND-SI) as per the norms of the RBI. Moreover, KSIDC falls under the Middle Layer NBFC category as per the Scale-Based Regulation (SBR) framework of RBI. The managing director of the company is Mr. Mir Mohammed Ali (IAS). |
| Unsupported Rating |
| ACUITE BB+/Stable |
| Analytical Approach |
| Acuité has considered a standalone approach while assessing the business and financial risk profile of KSIDC and has factored in financial, operational and managerial support it receives from Government of Kerala by virtue of being a state owned entity. The rating factors in the high degree of State Government holding in KSIDC along with the systemically important role played by the corporation in implementing the key financial and developmental objectives of the state. |
| Key Rating Drivers |
| Strength |
| Ownership and Support from Government of Kerala KSIDC is a state owned corporation incorporated in 1961. The board of KSIDC includes representation from Government of Kerala (GoK). The Board of Directors comprises of bureaucrats appointed by the Government of Kerala. This indicates a strong level of managerial support from the Government of Kerala. KSIDC’s funding profile is supported by the State Government’s moral obligation to support the capitalisation levels both on an ongoing basis and in the event of distress. The Government of Kerala is a 100 percent stakeholder in the corporation as on March 31, 2025 and is expected to support the corporation given its systemic importance in the government’s efforts to step up industrial and economic activity in the state. KSIDC’s capitalisation levels remained adequate marked by Capital Adequacy Ratio (CAR) at 60.24 percent as March 31, 2025 (Prov) . KSIDC is a Nodal Agency for several policy initiatives by the State Government of Kerala and is responsible to implement the policies announced in the annual state budget. The corporation in the past has operationalised various policy initiatives by GoK such as Kerala State Entrepreneurship Development/Startup Mission and Women Entrepreneur Development Mission. KSIDC reported growth in its AUM which stood at Rs. 1882.26 Cr. as on Mar 31, 2025 (Prov) as compared to Rs. 1667.24 Cr. as on March 31, 2024.The growth in AUM of KSIDC has been as a result of the Corporation’s approach towards diversifying the loan portfolio as well as enlarging the clientele base. The earning profile albeit declining in FY25 remains to be healthy as KSIDC has registered a PAT of Rs 58.26 Cr. in FY25 (Prov). The support from GoK is critical to the rating and therefore the credit profile of the state is of key importance. Acuité believes that KSIDC will continue to benefit from strong financial and managerial support from the State Government on an ongoing basis over the medium term. |
| Weakness |
| Weak asset quality, albeit improving KSIDC’s loan portfolio is concentrated towards the hospitality and the manufacturing segment which exposes KSIDC’s performance to risks associated with the said sectors. The asset quality of KSIDC remains weak as reflected in elevated Gross NPA of 14.61 percent as on March 31, 2025 (Prov.) which declined from 12.50 percent as on March 31, 2024. This is mainly due to operating challenges in these segments which has impacted the cash flows of the borrowers. KSIDC has done provisioning against NPAs as the Net NPA stood at 4.96% as on March 31, 2025 (Prov.) as against 2.70% on March 31, 2024. While the asset quality continues to be weak, the Return on Average Assets (RoAA) declined to 2.94 percent in FY2025 (Prov.) as against 4.18 percent in FY2024. The corporation is also taking efforts to reduce the NPA levels by offering one time settlement to the delinquent borrowers. Additionally, the corporation is focusing on improving collection and recovery mechanism. Acuité believes the ability of the corporation to control slippages and increase the loan portfolio will be one of the key rating drivers. |
| Assessment of Adequacy of Credit Enhancement under various scenarios including stress scenarios (applicable for ratings factoring specified support considerations with or without the “CE” suffix) |
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KSIDC has been supported by Government of Kerala (GOKe) through 100 percent holding and regular support in the form of timely disbursals of subsidies, grants and guarantees including in stress scenarios. |
| Rating Sensitivity |
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| Liquidity Position |
| Adequate |
| The company had a gearing level of 0.24 times as on March 31, 2025 (Prov). As on March 31, 2025 (Prov), the total borrowings stood at ~Rs. 327.21 Cr. and cash and bank balances stood at ~Rs. 122.06 Cr. The networth during the same period stood at Rs. 1348.24 Cr. There were no negative cumulative balances in any bucket as per the ALM statement, submitted by KSIDC, as on March 31, 2025 (Prov). |
| Outlook: |
| Stable |
| Other Factors affecting Rating |
| None |
| Key Financials - Standalone / Originator | ||||||||||||||||||||||||||||||||||||||||
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| Status of non-cooperation with previous CRA (if applicable): |
| Not Applicable |
| Any other information |
| None |
| Applicable Criteria |
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• Application Of Financial Ratios And Adjustments: https://www.acuite.in/view-rating-criteria-53.htm • Default Recognition: https://www.acuite.in/view-rating-criteria-52.htm • Non-Banking Financing Entities: https://www.acuite.in/view-rating-criteria-44.htm • State Government Ratings : https://www.acuite.in/view-rating-criteria-26.htm |
| Note on complexity levels of the rated instrument |
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| *Annexure 2 - List of Entities (applicable for Consolidation or Parent / Group / Govt. Support) | ||||||
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