Press Release

Press Release

November 05, 2025

JKB FINANCIAL SERVICES LIMITED
Rating Assigned and Reaffirmed

Product	Quantum (Rs. Cr)	Long Term Rating	Short Term Rating
Bank Loan Ratings	10.00	-	ACUITE A1 \| Assigned
Bank Loan Ratings	15.00	-	ACUITE A1 \| Reaffirmed
Total Outstanding	25.00	-	-
Total Withdrawn	0.00	-	-

Rating Rationale

Acuité has assigned the short-term rating to ‘ACUITE A1’ (read as ACUITE A one) on the Rs.10.00 Cr. bank facility of JKB Financial Services Limited.

Acuité has reaffirmed the short-term rating of ‘ACUITE A1’ (read as ACUITE A one) on the Rs.15.00 Cr. bank facility of JKB Financial Services Limited.

Rationale for rating

The rating factors in JKBFSL’s strong parentage (J&K Bank held 100% as on March 31, 2025) and expectation of capital backing at regular intervals. Acuite also takes cognizance of J&K Bank’s intent to continue to maintain majority ownership in JKBFSL. J&K bank has shared brand name which provides financial flexibility to JKBFSL.
The rating factors in JKB Financial Services Limited’s experienced management, resourceful promoters, and established position in its segment. JKBFSL has comfortable capitalization with a tangible networth of Rs. 46.99 Cr. as on March 31, 2025 . The networth is aided by healthy internal accruals. The rating also takes into account the improvement in JKBFSL’s profitability metrics. JKBFSL reported a PAT of Rs. 3.79 Cr. for FY2025 as compared to Rs. 2.64 Cr. for FY2024. The company saw an increase in volumes traded in retail client base. The improvement in financial risk profile of the company is expected to continue to improve in FY2025 on the back of a revival in the domestic capital markets. The rating is, however, constrained on account of JKBFSL’s susceptibility to the level of volatility in the capital markets as well as highly competitive landscape in broking business. For the past couple of years, most of the broking companies have witnessed significant traction in broking volumes on account of sharp rebound and volatility in capital/ commodity markets which may not be sustainable. Going forward, continued linkages with the promoters, and ability of the company to improve its operating performance, are key monitorables.

About the company

Srinagar, Jammu & Kashmir based JKB Financial Services Limited (JKBFSL) was incorporated on August 27, 2008, as a wholly owned subsidiary of J&K Bank. JKB Financial Services Limited offers a wide range of financial services, including stock broking, depository services, third-party product distribution and initial public offering (IPO) facilitation. The company is a member of the National Stock Exchange (NSE), Bombay Stock Exchange (BSE), National Securities Depository Limited (NSDL), Central Depository Services (India) Limited (CDSL) and the Association of Mutual Funds in India (AMFI) enabling it to provide a comprehensive suite of broking, demat, and mutual fund services. Mr. Baldev Prakash, Mr. Mohd Muzzafar Wani, Mr. Nisar Ahmad Zargar, Ms. Nishi Sharma, Mr. Syed Rais Maqbool and Mr. Syed Aadil Bashir Andrabi are the directors of the company.

About the Group

Jammu and Kashmir Bank (J&K Bank) is a Scheduled Commercial Bank and one of the oldest private sector Bank in India, incorporated in 1938. Bank is listed on the NSE and the BSE and has its Corporate Headquarters at Srinagar. Bank functions as a leading bank in the Union Territories of Jammu & Kashmir and Ladakh and is designated by Reserve Bank of India as its exclusive agent for carrying out banking business for the Government of Jammu & Kashmir and Ladakh.

Unsupported Rating

Not Applicable.

Analytical Approach

Acuite Ratings has assessed the standalone credit risk profile of JKB Financial Services Limited and continues to factor in financial linkages with the parent, J&K Bank. The parent will continue to provide strong backing to JKBFSL, considering the strategic importance of the entity and the high moral obligation on account of 100% shareholding and shared name.

Key Rating Drivers

Strength

Strong Parent Linkages
J&K Bank is the parent company and holds 100 percent stake in JKBFSL. Acuite also takes cognizance of J&K Bank’s intent to continue to maintain majority ownership in JKBFSL. J&K Bank has a shared brand name, which provides financial flexibility to JKBFSL.

Experience in the capital markets
The company has been engaged in capital markets for around more than a decade, having presence in almost all segments such as equity capital and derivatives across the major domestic exchanges. The Company has Trading & Clearing membership of NSE & BSE, and is a depository participant of NSDL & CDSL.

Established Business Model based on Diversified Revenue Streams
The company has active operations in Debt and Equity Markets, both in Cash and F&O. The major revenue contributing segments are Broking Income and Trading Income. As on March 31, 2025, of the total revenue, Broking Income contributed ~59.04%. Besides roking revenue, the company is active in Trading in Debt and Equity Market. With the expected buoyancy in the debt market segment, Acuité believes that JKBFSL will benefit from its relations with institutional clientele and its expertise in Debt Market.

Weakness

Susceptibility of operating performance to volume and level of activity in capital markets
The overall trading volumes of most retail brokers have been adversely affected due to stringent market regulations related to margin requirements. This impact is particularly pronounced for JKBFSL, which faces additional challenges due to its limited operational scope, primarily serving a targeted region and relying heavily on customers from its holding company. These factors, coupled with technological impairments, present significant
Weaknesses that could hinder the company's competitive positioning and growth potential in the broader market. The nature of the business exposes the company to certain credit and market risk. The risk assumed by JKBFSL depends on the nature of the security, volatility in the price of the security, and the holding period. The timely churning of the portfolio also becomes important. Such events could also trigger demands for accelerated payments by lenders in case of pledge-based borrowings. The company has revenue streams from the broking business, which is a highly volatile and cyclical business, with the presence of a large number of established players who provide significant competition to the other fragmented and small players. The company's operating performance is linked to the capital markets, which are inherently volatile as they are driven by economic and political factors, as well as investor sentiments. Trading volume and earnings depend heavily on the level of trading activity in the capital market.

Acuité believes that the ability to manage the trade-off between various risks such as credit risk, market risk, and operational risk, and the returns, is critical to the maintenance of a stable credit risk profile.

Rating Sensitivity

Changes in Credit Quality of any securities in the investment portfolio
Changes in Regulatory environment

Liquidity Position

Adequate

JKBFSL had unencumbered cash and cash equivalents of Rs. 9.98 Cr. as on March 31, 2025.

Outlook:

Not Applicable

Other Factors affecting Rating

None.

Key Financials - Standalone / Originator

Particulars	Unit	FY25 (Actual)	FY24 (Actual)
Total Assets	Rs. Cr.	78.03	81.89
Opreating Income*	Rs. Cr.	16.60	13.27
PAT	Rs. Cr.	3.79	2.64
Net Worth	Rs. Cr.	46.99	43.51
Return on Capital Employed (RoCE)	(%)	11.56	7.55
Debt/Equity	Times	0.32	0.14
Gross NPA	(%)	NA	NA
Net NPA	(%)	NA	NA

*Total income equals to Net Interest Income plus other income.

Status of non-cooperation with previous CRA (if applicable):

Not Applicable

Any other information

None.

Applicable Criteria

• Application Of Financial Ratios And Adjustments: https://www.acuite.in/view-rating-criteria-53.htm
• Banks And Financial Institutions: https://www.acuite.in/view-rating-criteria-45.htm
• Default Recognition: https://www.acuite.in/view-rating-criteria-52.htm

Note on complexity levels of the rated instrument

In order to inform the investors about complexity of instruments, Acuité has categorized such instruments in three levels: Simple, Complex and Highly Complex. Acuite’s categorisation of the instruments across the three categories is based on factors like variability of the returns to the investors, uncertainty in cash flow patterns, number of counterparties and general understanding of the instrument by the market. It has to be understood that complexity is different from credit risk and even an instrument categorized as 'Simple' can carry high levels of risk. For more details, please refer Rating Criteria “Complexity Level Of Financial Instruments” on www.acuite.in.

Rating History

Date	Name of Instruments/Facilities	Term	Amount (Rs. Cr)	Rating/Outlook
12 Aug 2024	Letter of Credit	Short Term	15.00	ACUITE A1 (Assigned)

Annexure - Details of instruments rated

Lender’s Name	ISIN	Facilities	Date Of Issuance	Coupon Rate	Maturity Date	Quantum (Rs. Cr.)	Complexity Level	Rating
THE JAMMU AND KASHMIR BANK LIMITED	Not avl. / Not appl.	Line of Credit	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	15.00	Simple	ACUITE A1 \| Reaffirmed
THE JAMMU AND KASHMIR BANK LIMITED	Not avl. / Not appl.	Line of Credit	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	10.00	Simple	ACUITE A1 \| Assigned

Contacts

Mohit Jain
Chief Analytical Officer - Rating Operations

Tejas Chaugule
Analyst - Rating Operations

Contact details exclusively for investors and lenders

Mob: +91 8591310146
Email ID: analyticalsupport@acuite.in

About Acuité Ratings & Research

Acuité is a full-service Credit Rating Agency registered with the Securities & Exchange Board of India (SEBI). The company received RBI Accreditation as an External Credit Assessment Institution (ECAI) for Bank Loan Ratings under BASEL-II norms in the year 2012. Acuité has assigned ratings to various securities, debt instruments and bank facilities of entities spread across the country and across a wide cross section of industries. It has its Registered and Head Office in Kanjurmarg, Mumbai.

Disclaimer: An Acuité rating does not constitute an audit of the rated entity and should not be treated as a recommendation or opinion that is intended to substitute for a financial adviser's or investor's independent assessment of whether to buy, sell or hold any security. Ratings assigned by Acuité are based on the data and information provided by the issuer and obtained from other reliable sources. Although reasonable care has been taken to ensure that the data and information is true, Acuité, in particular, makes no representation or warranty, expressed or implied with respect to the adequacy, accuracy or completeness of the information relied upon. Acuité is not responsible for any errors or omissions and especially states that it has no financial liability whatsoever for any direct, indirect or consequential loss of any kind, arising from the use of its ratings. Ratings assigned by Acuité are subject to a process of surveillance which may lead to a revision in ratings as and when the circumstances so warrant. Please visit our website (www.acuite.in) for the latest information on any instrument rated by Acuité. Please visit https://www.acuite.in/faqs.htm to refer FAQs on Credit Rating.

Note: None of the Directors on the Board of Acuité Ratings & Research Limited are members of any rating committee and therefore do not participate in discussions regarding the rating of any entity.