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| Product | Quantum (Rs. Cr) | Long Term Rating | Short Term Rating |
| Bank Loan Ratings | 75.00 | ACUITE A+ | Stable | Assigned | - |
| Bank Loan Ratings | 375.00 | ACUITE A+ | Stable | Reaffirmed | - |
| Total Outstanding | 450.00 | - | - |
| Total Withdrawn | 0.00 | - | - |
| Rating Rationale |
| Acuité has reaffirmed the long-term rating of 'ACUITE A+' (read as ACUITE A Plus) on Rs. 375.00 Cr. bank facilities of APAC Financial Services Private Limited (APAC). The outlook will remain ‘Stable’. Acuité has assigned the long-term rating of 'ACUITE A+' (read as ACUITE A Plus) on Rs. 75.00 Cr. bank facilities of APAC Financial Services Private Limited (APAC). The outlook will remain ‘Stable’. Rationale for the rating The rating continues to factor in the sustained increase in scale of operations with improvement in earning profile and the healthy capitalization levels in FY25 and Q1FY26. APAC's AUM grew ~ 33 % to Rs. 2108.20 Cr. as on March 31, 2025 from Rs. 1588.38 Cr. as on March 31, 2024. The AUM for Q1FY26 stood at Rs 2168.79 Cr.The earning profile also saw an improvement with PAT levels at Rs. 110.03 Cr. for FY 25 as compared to Rs. 61.72 Cr. for FY 24. The company further reported a PAT of Rs. 33.23 Cr. during Q1FY26. The asset quality saw slight deterioration GNPA and NNPA levels at 1.17% and 0.69% as on March 31, 2025 as against 0.81 % and 0.53 % as on March 31, 2024 respectively. The GNPA and NNPA levels as on June 30, 2025 stood at 1.52% and 0.90% respectively. The rating continues to factor in the experienced management team supported by presence of seasoned investors/funds. The rating continues to factor in comfortable gearing levels of APAC at 1.17 times as on March 31,2025 as against 1.13 times as on March 31,2024. The rating further factors in the comfortable liquidity profile for the medium term and the increase in the granularity of portfolio through a planned expansion of APAC branches within the chosen geographies. The rating, however, continues to be constrained by limited track record in building and managing a retail portfolio. Acuité believes that the ability of the company to deploy the funds across various asset classes while maintaining an optimal risk return trade-off will remain key monitorable. |
| About the company |
| Mumbai based , APAC started business operations in 2018 with the vision of servicing the financial needs of underbanked and underserved micro enterprises, self-employed and salaried in semi-urban and rural areas in Bharat. The Company’s business model is built on strong ESG principles with balance amongst its core mantras of G.Q.P. (Growth, Quality & Profitability). The Company's loan portfolio comprises primarily of term loans, secured by property. APAC primarily serves borrowers who typically have limited access to banks or large financial institutions. The Company employees 2000+ people across 200+ branches in 6 states, and sources customers via an in-house sales team, which is additionally powered by the Company’s proprietary origination & underwriting technology platform “Alpha.” This feet-on-street business model helps APAC build strong relationships with customers, understand each customer’s unique financial needs as well enables on ground verification of the collateral; while technology helps to improve efficiency and customer TATs. On ground presence of Company's employees across each of its 200+ branches for loan origination and collection also strengthens Company's fair practice w.r.t. its customers. APAC’s loans are primarily secured against property with an average ticket size of 5-6 lakhs. APAC conducts thorough underwriting based on the borrower's assessed income, credit history, business vintage, collateral value and reference checks, among other aspects. The Company is deepening its use of technology and alternate data to improve the quality of its credit approval processes. Credit underwriting is as per board approved credit risk policy and related policies & programs. APAC has strong risk management systems, processes, policies and reviews, with a high degree of independent oversight. Senior management has deep domain expertise and experience (semi-urban/rural and MSMEs) across business cycles. The risk team is further supported by the fraud control unit (FCU), to build a robust credit platform. By focusing on these aspects as being core to its business model, APAC effectively serves its customer target market with a strong product-market fit, maintains strong financial health (G.Q.P.), and contributes to the broader financial inclusion in India. |
| Unsupported Rating |
| Not Applicable |
| Analytical Approach |
| Acuite has considered a standalone approach to the business and the financial profile of APAC Financial Services Pvt. Ltd. to arrive at the rating. |
| Key Rating Drivers |
| Strength |
| Seasoned Management Team supported by reputed investors: APAC commenced its operation in FY2018. As on March 31, 2025, Mr. Gunit Chadha, the founder promoter, held 41.74% of the stake in AFSPL. Multiples Private Equity Fund & Plenty Private Equity Fund collectively hold 20.04% in AFSPL and investors such as Norwest Capital LLC and Rajamahendra Chola Limited both own 16.40% each as on March 31, 2025. AFSPL currently has its board of directors comprising of Mr. Gunit Chadha who has occupied top positions such as CEO of Deutsche Bank (Asia Pacific region) and CEO of IDBI Bank. The other members of the board include Mr. Shankar Dey, a seasoned banking and finance professional with over four decades experience in BFSI sector. The board also has Ms. Nithya Easwaran, who has over two decades experience in financial services and is also the Managing Director of Multiples Alternate Asset Management Company Limited (Multiples). The board also has Mr. Sanjay Maliah, Mr Ajit Raikar all having more than two decades of experience in BFSI and other industries and Mr Robin Agarwal having over a decade of experience across Private Equity and Consulting. Comfortable Capitalization Profile and improved profitability metrics APAC's gearing levels are low at 1.17 times as on March 31, 2025 (1.13 times as on March 31,2024) since the operations are largely funded by equity. The CAR on levels stood at 38.98% as on March 31, 2025. The networth stood at Rs. 1079.55 Cr. as on March 31,2025 (Rs. 948.73 Cr. as on March 31,2024), while the debt stood at Rs. 1268.19 Cr. as on March 31,2025 (Rs. 1069.99 Cr. as on March 31,2024). The PAT for FY24 stood at Rs. 61.72 Cr. which grew to Rs. 110.03 Cr. in FY25 and further reported a PAT of Rs. 33.23 Cr. during Q1FY26. The RoAA and NIM for FY 25 stood at 5.01% and 14.53% respectively as against 3.84% and 12.35% for FY24. Acuité believes that APAC will continue to benefit from its experienced management and continued support from its investors. AFSPL focuses on business loan segment which extend credit to micro enterprises, self-employed and salaried in semi-urban and rural areas which are secured in nature. Moreover the asset quality is healthy and the portfolio is granular. |
| Weakness |
| Limited seasoning of the new portfolio and risk inherent to MSME Sector: The portfolio grew by ~33% Y-o-Y and healthy disbursements of Rs 969.65 Cr. were done in FY2025. APAC's AUM stands at Rs. 2168.79 Cr. as on June 30, 2025 as compared to Rs. 2108.20 Cr. as on March 31, 2025 and Rs 1588.38 Cr. as on March 31,2024. The portfolio has less seasoning and the performance of the new portfolio created has to be monitored. APAC is fairly diversified with presence in 6 states with major focuses on business loan segment which extend credit to micro enterprises, self-employed and salaried in semi-urban and rural areas which are secured in nature. Occurrence of events such as slowdown in economic activity or shifting of activity to other geographies could impact the cash flows of the borrowers, thereby impacting credit profile of APAC. Acuité believes that the company’s ability to maintain its asset quality given the low seasoned loan book and increased presence in the newer geographies will remain a key rating monitorables. |
| ESG Factors Relevant for Rating |
| APAC has significant Institutional ownership with policies and processes in place to ensure transparent, fair & ethical conduct with its Customers and other stakeholders. Empowerment, Innovation & Excellence, Governance, Respect & Integrity and Collaboration are part of APAC’s core values. APAC has two independent directors in its Board & constituted board committees such as Risk Management Committee, Audit Committee, Nomination and Remuneration Committee, IT Strategy Committee and CSR Committee to ensure high governance standards. Also, APAC’s credit committee has two independent members with more than two decades of experience across financial services. |
| Rating Sensitivity |
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| Liquidity Position |
| Adequate |
| APAC’s liquidity profile remains adequate with positive cumulative mismatches in all the buckets as on March 31, 2025.The company had borrowings outstanding of Rs.1,268.19 crore as on March 31, 2025. It had an unencumbered cash and bank balance of Rs. 83.51 crore and liquid investments in the form of mutual funds of Rs. 105.54 crore as on that date. Further, APAC had undrawn working capital limits of Rs. 37 crore as on March 31, 2025. The monthly collection efficiency from the portfolio provides additional comfort. APAC had ~24 lender relationships as on March 31, 2025 as compared to ~21 as on March 31, 2024. |
| Outlook: Stable |
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| Other Factors affecting Rating |
| None |
| Key Financials - Standalone / Originator | ||||||||||||||||||||||||||||||||||||||||
**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 • 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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