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| Product | Quantum (Rs. Cr) | Long Term Rating | Short Term Rating |
| Bank Loan Ratings | 33.52 | ACUITE BBB- | Stable | Reaffirmed | - |
| Non Convertible Debentures (NCD) | 10.00 | ACUITE BBB- | Stable | Reaffirmed | - |
| Total Outstanding | 43.52 | - | - |
| Total Withdrawn | 0.00 | - | - |
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Rating Rationale |
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Acuité has reaffirmed the long term rating of ‘ACUITE BBB-’ (read as ACUITE triple B minus) to the Rs. 33.52 Cr. bank loan facilities of AARSH FINCON LIMITED (ERSTWHILE AKME FINCON LIMITED) (AFL). The outlook is 'Stable'. Acuité has reaffirmed the long term rating of ‘ACUITE BBB-’ (read as ACUITE triple B minus) to the Rs. 10.00 Cr. Non-Convertible Debentures of AARSH FINCON LIMITED (ERSTWHILE AKME FINCON LIMITED) (AFL). The outlook is 'Stable'. Rationale for the Rating The rating reaffirmation is primarily driven by experienced management, established presence in its areas of operation and adequate capitalization level. The rating takes into account the ability of the company to raise funds through equity infusion at regular intervals (Rs 5.78 Cr. during FY2025 (Prov)) and expectations of further equity infusion in near to medium term. Moreover, the rating also takes into account the growth in business performance such as AUM, Disbursements and Net Interest Income where all 3 facets have grown in FY25. The rating is, however, constrained by modest scale of operations coupled with modest financial performance and geographic concentration . The company’s PAT moderated to Rs 2.19 Cr. as on March 31,2025 (Prov) from Rs 2.24 Cr. as on March 31,2024 owing to significant increase interest expenses and operational costs relating to the expansion in FY25. The company had a GNPA of 2.17 percent as of March 31, 2025 (Prov). AFL’s portfolio is exposed to a medium to high geographical concentration risk, as 99.99% percent of the total disbursements is concentrated in the states of Rajasthan, Delhi and Orissa as of March 31 2025 (Prov). |
| About the company |
| Udaipur based; AARSH Fincon Limited (ERSTWHILE AKME FINCON LIMITED) was incorporated in 1996 as a non-deposit taking non-banking finance company (NBFC). The company is engaged in financing of two wheelers, three/four wheelers, commercial vehicles and loan against property (LAP) towards SME borrower base. AFL is promoted and managed by Mr. Anil Kumar Jain. The company presently operates through a network of 57 branches spread across Rajasthan, Delhi, Orissa and Gujarat. |
| Unsupported Rating |
| Not Applicable |
| Analytical Approach |
| Acuité has considered the standalone business and financial risk profile of AARSH FINCON LIMITED to arrive at the rating |
| Key Rating Drivers |
| Strength |
| Experienced Management:- AARSH FINCON LIMITED (AFL), a Non-Deposit accepting Non-Banking Financial Company, commenced its operations in 1996. The operations of the company are manged by Mr. Anil Kumar Jain (Managing Director). He has over two decade of experience in non-banking and financial services. Mrs. Shilpa Jain (Executive Director) and Mrs Vimal Jain (Executive Director) actively manage and supervise the day to day operations of the company. Mr Praveen Kumar (Additional Director) is responsible for corporate administration & relationship management. Further, AFL has long track record of operations in the vehicle financing segment. The company’s AUM stood at Rs 132.92 Cr. as on March 31, 2025 (Prov.) and Rs 96.13 Cr. as on March 31,2024. The company’s disbursements stood at Rs.69.93 Cr. in FY2025 (Prov) as against Rs.49.18 Cr. in FY2024. Acuité believes that AFL will continue to benefit from its established presence in the financial services industry along with the experienced promoters. Healthy Capitalization levels: The company’s AUM stood at Rs 132.92 Cr. as on March 31, 2025 (Prov) and Rs 96.13 Cr. as on March 31,2024. The networth stood at Rs 50.52 Cr. as on March 31,2025 (Prov) as against Rs 42.61 Cr. as on March 31,2024. AFL’s Capital Adequacy Ratio (CAR) stood at 31.84 percent as on March 31, 2025 (Prov), which marginally deteriorated from 38.19 percent as on March 31, 2024 owing to increase in risk weighted assets. Acuite believes that AFL will benefit from continued support of Management going forward. |
| Weakness |
| Moderate asset quality and financial performance GNPA and NNPA levels stood at 2.17 percent and 1.69 percent as on March 31, 2025 (Prov) as against 2.26 percent and 1.93 percent as on March 31, 2024. AFL registered operating income of Rs. 9.87 Cr. in FY2025 (Prov) as against Rs.8.79 Cr. in FY2024. NIM and ROAA stood at 9.32 per cent and 1.55 per cent for FY2025(Prov) as compared to 10.65 per cent and 2.13 per cent for FY2024, respectively. Company's PAT has reduced marginally to Rs 2.19 Cr. as on March 31,2025 (Prov) compared to Rs. 2.24 Cr. as on March 31, 2024. Acuite believes that going forward ability of the company to grow its loan portfolio while improving its profitability will be key monitorable. Modest scale of operations coupled with geographic concentration risk The company has modest scale of operations with an AUM of Rs. 132.92 Cr. as on March 31, 2025 (Prov), as compared to Rs 96.13 Cr. as on March 31, 2024. AFL’s portfolio is exposed to high geographical concentration risk, as 99.99 per cent of the total portfolio is concentrated in only the states of Rajasthan, Orissa and Delhi. However, AFL has expanded to the state of Gujarat to minimize the geographic concentration risk. Generally, the risk profile of NBFCs with a geographically diversified portfolio is more resilient compared to that of entity with a geographically concentrated portfolio. Acuité believes that modest scale of operations coupled with geographic concentration in its portfolio will continue to weigh on the company’s credit profile over the near to medium term. |
| Rating Sensitivity |
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| All Covenants |
| Covenants are not available as it is a Proposed NCD |
| Liquidity Position |
| Adequate |
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AFL’s ALM statement as on March 31, 2025 (Prov) shows positive cumulative mismatch in all the buckets and its liquidity position is adequate marked by monthly collections efficiency of approximately 98%. AFL has Rs.35.10 Cr. of repayment towards borrowings within one year and Rs 37.02 Cr. of principal collections come due within one year, which seems to be a managed liquidity situation. AFL has cash and cash equivalents of Rs.4.50 Cr. Acuité believes that the ability of the company to raise long term funding and improve collections will be critical to maintaining liquidity profile at adequate levels. |
| 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 |
| Note on complexity levels of the rated instrument |
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