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| Product | Quantum (Rs. Cr) (SEBI) | Quantum (Rs. Cr) (Other FSR) | Long Term Rating | Short Term Rating | Regulated By |
| Bank Loan Ratings | 0.00 | 177.52 | ACUITE BBB+ | Stable | Reaffirmed | - | RBI |
| Bank Loan Ratings | 0.00 | 10.00 | Not Applicable | Withdrawn | - | RBI |
| Non Convertible Debentures (NCD) | 27.90 | 0.00 | ACUITE BBB+ | Stable | Reaffirmed | - | SEBI |
| Non Convertible Debentures (NCD) | 44.36 | 0.00 | Not Applicable | Withdrawn | - | SEBI |
| Total Outstanding | 27.90 | 177.52 | - | - | - |
| Total Withdrawn | 44.36 | 10.00 | - | - | - |
| Note:- For activities or ratings of instruments falling under the purview of Financial Sector Regulators other than SEBI, the grievance / dispute redressal mechanisms and investor protection mechanisms provided by SEBI shall not be available. |
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Erratum: “Any Other information” section has been updated. |
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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 plus) on the Rs.27.90 Cr. of Non-Convertible Debentures of Indel Money Limited (Erstwhile Indel Money Private Limited) (IML). The Outlook 'Stable' Acuite’ has reaffirmed the long-term rating of 'ACUITE BBB+' (read as ACUITE triple B plus) on the Rs 177.52 Cr. bank facilities of Indel Money Limited (Erstwhile Indel Money Private Limited) (IML). The Outlook is 'Stable'. Acuité has withdrawn the long-term rating on the Rs. 44.36 crore non-convertible debentures of Indel Money Limited (Erstwhile Indel Money Private Limited)( IML). The rating is withdrawn without assigning any rating as the instrument is fully repaid. The rating is being withdrawn on account of request received from the company and confirmation of maturity of the ISINs received from the debenture trustee. Acuité has withdrawn the long term rating on the Rs. 10.00 crore bank loan rating of Indel Money Limited (Erstwhile Indel Money Private Limited) (IML). The rating is withdrawn without assigning any rating as the instrument is fully repaid. The rating is being withdrawn on account of request received from the company and No Due Certificate received from the banker. The rating withdrawal is in accordance with Acuité's policy on withdrawal of rating as applicable to the respective facility / instrument. Rationale for the rating The rating takes into account the significant improvement in earning profile and healthy growth in the operational performance of the company. IML has reported a PAT of Rs. 23.50 Cr. during H1FY25 as compared to Rs. 39.86 Cr. during FY24. The improvement in earning profile is on the back of growth in disbursements supported by increase in the number of branches and focused business drives conducted by the company. The company’s AUM has increased to Rs. 1533.83 Cr. as on March 31, 2024 as compared to Rs. 1153.89 Cr. as on March 31, 2023. The AUM as on Sep 30, 2024 stood at Rs. 1,825.71 Cr. The company’s disbursements have gained traction as reflected by FY24 disbursements of Rs. 3,263.81 Cr. as against Rs. 2436.55 Cr. in FY23. The Capital Adequacy Ratio (CAR) stood adequate at 26.61 percent as on September 30, 2024 as against 22.60 percent as on March 31, 2024. The company has infused equity at regular intervals to maintain its capital buffers. These strengths are partially offset by relatively higher leverage and geographically concentrated portfolio in the state of Tamil Nadu and Karnataka with ~45.05 percent of the AUM as on September 30, 2024. The rating is also constrained due to highly competitive business of lending against gold. Acuité believes, going forward, the ability of the company to maintain comfortable capitalization levels with regular equity infusion, healthy resource raising ability and further augment its scale of operations while maintaining healthy profitability & asset quality will be a key rating monitorable. |
| About the company |
| Indel Money Limited (IML) is a part of Indel Corporation Private Limited, promoted by Mr. Mahanan Gopalkrishnan, a business group with investments across financial services, automobile, hospitality, infrastructure development, media, communication, and entertainment. Incorporated in 1986, Indel Money Limited, is a Non-Deposit Taking Non- Banking Finance Company (ND-NBFC) based out of Kerala. The company is promoted by Mr. Mahanan Gopalkrishnan (Managing Director) and his son Mr. Umesh Mohanan (CEO). IML provides fund-based services like Gold Loan, MSME Loans, Business Loans (Secured & Unsecured), loans to group companies and a small portion of personal & trader loans. IML also provides fee-based services by way of money transfer facilities. As on December 31, 2024, IML operates in 6 states, namely Tamil Nadu, Karnataka, Andhra and Telangana, Odisha, Kerala and Maharashtra. |
| Unsupported Rating |
| Not Applicable |
| Analytical Approach |
| Acuité has considered a standalone approach to the business and financial risk profile of IML to arrive at the rating. |
| Key Rating Drivers |
| Strength |
| Promoter support and experienced management team The extensive experience of the promoters and senior management team, with the addition of independent directors, should continue to support the business. Mr. Mohanan Gopalakrishnan (chairman and managing director) is a banking professional with more than 30 years of experience in the Gulf Cooperation Council (GCC). He was also the head of trade finance operations of United Arab Bank for a span of 11 years commencing from 2001. Mr Umesh Mohanan (executive director and CEO) handled a Middle Eastern conglomerate, spearheading its global operations for 12 years till 2016. Apart from the promoter directors, the board members of IML consists of prominent independent directors such as Mr N S Venkatesh (CEO of Association of Mutual Funds in India), Mr C R Sasikumar (former Managing Director of State Bank of Travancore), Mr S Ganesh (former principal chief general manager of RBI), Acantharean T R (CA) & Mr. Salilvenu (Admin Professional). Acuite believes that company will continue to benefit from the extensive experience of the promoters and management team along with Independent Director. Healthy growth in AUM AUM grew to Rs. 1533.83 Cr. as on March 31, 2024 as compared to Rs. 1153.89 Cr. as on March 31, 2023 (Rs. 671.57 Cr. as on March 31, 2022). Loan against gold contributes 92.02 percent to the total POS followed as on September 30, 2024. The growth in AUM is supported by growth in number of branches and much focused business drives conducted by the company. Acuité believes that going forward the ability of the company to maintain comfortable asset quality and growth momentum in AUM will be key rating sensitivity. Improvement in financial performance The company’s AUM has increased to Rs. 1533.83 Cr. as on March 31, 2024 from Rs. 1153.89 Cr. as on March 31, 2023. The AUM has further grown to Rs. 1825.71 Cr. as September 30, 2024. Improvement in earnings profile is due to increase in AUM. The company has reported a PAT of Rs 23.50 Cr. during H1FY25 compared to Rs. 39.86 Cr. during FY2024. RoAA of the company stood at 3.55 percent for FY24 as against 2.36 percent for FY23. Acuité believes that IML will be able to sustain its financial performance and any impact on profitability metrics due to higher provisioning requirements would remain key monitorable. |
| Weakness |
| Leveraged capital structure IML is engaged in loans against gold and SME loans secured and unsecured for a period of 12 - 24 months. The company’s networth stood at Rs. 211.18 Cr. and total debt stood at Rs. 907.71 Cr. as on March 31, 2024. The company’s AUM stood at Rs. 1533.83 Cr. as on March 31, 2024 as compared to Rs. 1153.89 Cr. as on March 31,2023 (Rs. 671.57 Cr. as on March 31,2022). IML’s gearing stood at 4.30 times as on March 31, 2024 (4.75 times as on March 31, 2023). To support the growth momentum IML would require further debt and considering the already leveraged capital structure the promoters may be required to infuse additional equity to support any future business growth. Going forward, Acuité believes that the company’s ability to manage its gearing levels will be a key monitorable and infusion of capital would be required for containing gearing levels and to support business growth. Moderate asset quality The company’s asset quality is marked by on time portfolio of 85.96 percent with a GNPA of 4.93 percent as on September 30, 2024. The Gross NPA has stabilized from March 31, 2024 (4.98 percent) on account of provisioning and write-offs in H1FY25. The Net NPA as on September 30, 2024 stood at 3.40 percent. Majority of the NPA's stood towards non-gold loan segment for which the provision cover is higher. The MSME portfolio that is greatly contributing NPA's, is being run down gradually and newer loans towards this segment has not been sanctioned since April, 2024. Going forward, the incremental provisioning requirement against the same will have a bearing on the overall profitability metrics of the company. Geographical concentration risks IML started its operations in the state of Kerala and gradually expanded to the states of Karnataka and Tamil Nadu and has recently expanded to other states like Telangana, Odisha, Andhra Pradesh, thereby reducing the concentration in the state of Kerala. However, major concentration is in the state of Tamil Nadu and Karnataka with exposure of 45.05 percent as on September 30, 2024. Thus, the company's performance is expected to be sensitive to highly competitive business of lending against gold and the occurrence of events such as natural calamities, which may adversely impact the credit profile of the borrowers.The company has plans to expand its operations in newer geographies and portfolio quality is these newer geographies is yet to be tested. Acuite believes that geographical concentration coupled with improved earning profile will continue to weigh on the company’s credit profile. |
| ESG Factors Relevant for Rating |
| Indel Money Limited is a non-banking finance company (NBFC) Some of the material governance issues for the financial services sector are policies and practices with regard to business ethics, board diversity and independence, compensation structure for board and KMPs, role of the audit committee and shareholders’ rights. On the social aspect, some of the critical issues for the sector are the contributions to financial inclusion and community, development, responsible financing including environmentally friendly projects and policies around data privacy. The industry, by nature has a low exposure to environmental risks. The company has a well-structured board consisting of eight directors, in which two of them are executive directors. Out of six non-executive directors, three are independent directors. IML does have one woman director on board. In accordance with the guidelines issued by RBI, the entity has constituted a Risk Management Committee that is responsible for identification, evaluation, and mitigation of operational, strategic, and external environment risks. IML provides fund-based services like Gold Loan, MSME Loans, Business Loans (Secured & Unsecured), loans to group companies and a small portion of personal & trader loans. IML also provides fee-based services by way of money transfer facilities. |
| Rating Sensitivity |
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| All Covenants |
| No financial covenants present in the term sheet. |
| Liquidity Position |
| Adequate |
| IML’s overall liquidity profile remains adequate with no negative cumulative mismatches in near to medium term as per ALM dated March 31, 2024. ALM is comfortable mainly on account of shorter tenor of loans provided by IML with access to longer tenure borrowings. As on March 31, 2024, the company had cash and bank balance of about Rs 95.51 Cr. |
| Outlook: Stable |
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| 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 |
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Indel Money Limited has a common independent director with Acuité Ratings & Research Limited. The common independent director did not participate in the rating process, rating committee meeting, or any meeting of the Board of Directors of Acuité Ratings & Research Limited in which the rating of Indel Money Limited / its securities was discussed.
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| 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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| Note:- For activities or ratings of instruments falling under the purview of Financial Sector Regulators other than SEBI, the grievance / dispute redressal mechanisms and investor protection mechanisms provided by SEBI shall not be available. |
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Contacts |
List of instruments and names of regulators of the instruments |
