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| Product | Quantum (Rs. Cr) | Long Term Rating | Short Term Rating |
| Bank Loan Ratings | 922.10 | ACUITE AA- | Stable | Reaffirmed | - |
| Total Outstanding | 922.10 | - | - |
| Total Withdrawn | 0.00 | - | - |
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Rating Rationale |
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Acuité has reaffirmed the long-term rating of ‘ACUITE AA-’ (read as ACUITE double A minus) on the Rs. 922.10 Cr. bank facilities of A.K. Capital Services Limited (AKCSL). The outlook is 'Stable'.
Rationale for the rating The rating continues to factor in the established presence & track record of A K Capital Services Limited (AKCSL) as a merchant banker in the debt capital market, experienced management, strong risk management systems and diverse base of institutional clients. The rating further factors in comfortable capital structure of AKCSL (on a consolidated basis) marked by net worth and gearing of Rs.1011.22 Cr. and 3.11 times as on March 31, 2025. The lending arm of the Group, AKCFL too exhibited healthy capitalization levels with CAR of 31.64 percent as on March 31, 2025. The rating also reflects the sound asset quality and prudent risk management practices of AKCFL (subsidiary of AKCSL). As on March 31, 2025, AKCFL reported no slippages and the gross non-performing assets was nil. The rating also factors in the demonstrated ability of the group to raise funds from banks and capital markets across various maturities at competitive rate, which has enabled them to optimise the cost of funding. These strengths are partly offset by economic cyclicality and other macroeconomic factors in the debt market which can result in volatility in overall earnings profile. On the lending front, AKCFL’s top ten exposures accounted for 45.96 percent of its total exposures as on March 31, 2025 and 46.81 percent of its total exposures as on June 30, 2025. Further, the Group’s performance is also susceptible to the economic cyclicality and other macroeconomic risks inherent in the debt capital market as reflected in consolidated total income of about Rs. 260.59 Cr. during FY2025 which has seen a reduction from Rs. 323.15 Cr. during FY2024. |
| About the Company |
| Incorporated in 1993, Mumbai based AKCSL, a SEBI registered Category I Merchant Banker, is promoted by Mr. A K Mittal. The company is engaged in merchant banking, investment and financial advisor related activities in the fixed income market is a leading player in the corporate debt market segment through management of private placements as well as public issues. The merchant banking activities conducted by AKCSL involves corporate debt raising through private placement of fixed income securities and initial public issue of bonds and debentures. |
| About the Group |
| A.K.Capital Finace Limited(AKCFL), incorporated in 2006, is a subsidiary of A.K.Capital Services Limited., a leading SEBI registered Category 1 Merchant Banker in India. Incorporated in 2006, A. K. Stockmart Private Limited (AKSMPL) is a full service brokerage house with membership of India’s two key stock exchanges viz,–NSE and BSE. Incorporated in November 2006, A. K. Wealth Management Private Limited (AKWMPL) is a SEBI registered portfolio management company which is a wholly owned subsidiary of A. K. Capital Services Limited. Incorporated in July 2013 and domiciled in Singapore, A. K. Capital Singapore Pte. Ltd. (AKCSP) is registered with Monetary Authority of Singapore as a financial services company. Family Home Finance Private Limited (FHFPL) is wholly owned subsidiary of A. K. Capital Finance Limited and step down subsidiary of A. K. Capital Services Limited. FHFPL is registered with National Housing Bank as a Non-Deposit taking Housing Finance Institution. The A. K. Group is a financial conglomerate offering a comprehensive range of services and solutions spanning the financial markets of the country. Through its various arms, the group offers services to the corporate and retail segments spanning wealth management, debt advisory, retirement solutions, broking and distribution, project financing and venture capital. |
| Unsupported Rating |
| Not Applicable |
| Analytical Approach |
| Extent of Consolidation |
| •Full Consolidation |
| Rationale for Consolidation or Parent / Group / Govt. Support |
| Acuité has taken consolidated view on the business and financial risk profile of A.K. Capital Services Limited (AKCSL) and its subsidiaries, A.K. Capital Finance Ltd (AKCFL), A.K. Stockmart Pvt. Ltd, Family Home Finance Pvt Ltd, A.K. Capital Corporation Pvt ltd, A.K. Capital (Sinagpore) Pte. Ltd, A.K. Wealth Management Pvt. Ltd and A.K. Alternative Asset Managers Pvt. Ltd for analysing AKCFL’s credit profile. This consolidation is in the view of the common promoters, shared brand name and strong financial and operation synergies. |
| Key Rating Drivers |
| Strength |
| Established presence in debt market
Incorporated in 1993, A.K. Capital Services Limited (AKCSL) is a SEBI registered Category-I Merchant Banker engaged in management of private placements as well as public issues and is one of the leading players in the corporate debt market segment. The merchant banking activities conducted by AKCSL involves corporate debt raising through private placement of fixed income securities and initial public issue of bonds and debentures. AKCSL managed direct assignments of Rs. 3,85,639 Cr. translating to a market share of 46.10 percent in FY2025 as against debt assignments of Rs. 2,98,917 Cr. translating to a market share of 43.40 percent in FY2024. AKCSL has established strong relationship with diverse base of institutional clients including Indian Corporates, Banks, NBFCs, FIs, Provident & Pension Funds, Insurance Companies, Mutual Funds, AIFs and various fund houses. AKCSL along with its subsidiaries which are engaged in lending, investment and financial advisory services have demonstrated progressive presence in undertaking and executing transactions in debt market segments like Structure Financing & Corporate Debt Restructuring, Debt Portfolio & Private Wealth Management Services and Investment advisory & Retirement Trust Solutions. Comfortable capitalization and gearing; diversified funding mix On consolidated basis, AKCSL has healthy capitalisation levels marked by networth of Rs. 1011.22 Cr. as on March 31, 2025 (Rs. 948.07 Cr. as on March 31, 2024). The Group has demonstrated ability of the group to raise funds from banks and capital markets across various maturities at competitive rate, which has enabled them to optimise the cost of funding. The gearing ratio is comfortable at 3.11 times as on March 31, 2025, 2.90 times as on March 31, 2024. On standalone basis, AKCSL reported networth and gearing of Rs 499.78 Cr. and 1.51 times respectively as on March 31, 2025 as compared to a networth and gearing of Rs. 488.04 Cr. and 1.39 times respectively as on March 31, 2024. Acuité believes that the current capital levels along with internal accruals for the Group provide sufficient room for medium-term growth of its multiple businesses along with the requirement of buffers for any asset quality shocks at AKCFL level. Healthy asset quality; sound risk management practices Incorporated in 2006, AKCFL, lending arm of the Group, is a Mumbai based systemically important non-deposit taking nonbanking financial company (NBFC-ND-SI) engaged in the business of lending to or investing in bonds of corporate borrowers with high credit quality and lending against highly rated securities. Since FY2022, AKCFL increased exposure to private sector entities (mostly high investment grade entities) in the form of loans and advances and NCDs primarily driving up the AUM (AUM; including current investments, non-current investment, loans & advances and inventory of debt securities) to Rs. 3040.03 Cr. as on March 31, 2025 from Rs. 2727.52 Cr. as on March 31, 2024. As on June 30, 2025, the AUM stood at Rs 3111.32 Cr. The shift in the lending and investment strategy was mostly driven in response to the buoyant debt/credit market. Nonetheless, Acuite notes the Group’s philosophy to not aggressively grow its investments instead churn it to reduce the concentration risk. While AKCFL has been following prudent risk management practices with respect to lending, collateral events like deterioration in the credit quality of borrowers and decline in security prices can impact its performance with regard to its asset quality and earnings profile. AKCFL has demonstrated the ability to identify any potential weakening of credit quality and accordingly unwind its exposure in a timely manner. Its market intelligence and its established presence as an intermediary in the fund raising segment help in maintaining the balance between yields and asset quality. Acuité believes that AKCFL’s prudent lending policies, robust risk management practices and strong market intelligence derived from its longstanding experience in the debt market will support its ability to scale up its operations and maintain healthy asset quality. |
| Weakness |
| Susceptibility of performance to the debt segment of capital markets
The group is susceptible to the economic cyclicality and other macroeconomic risks inherent in the debt capital market can result in volatility in overall earnings profile of AKCSL as reflected in consolidated total income of about Rs. 260.59 Cr. during FY2025 as compared to Rs. 323.15 Cr. during FY2024. The revenue profile during FY2025 resulted in a consolidated Profit after Tax (PAT) of about Rs. 87.13 Cr. during FY2025 which saw a reduction from Rs 92.52 Cr. during FY2024. Further, adverse events such as a sharp spike in inflationary pressures or hardening of interest rates could translate into muted credit off take. The Group has traditionally focused on low risk segments such as quality corporate papers, government securities and fully collateralized loans. On a standalone basis, AKCFL reported marginally higher profitability as reflected in profit after tax (PAT) of about Rs. 67.82 Cr. during FY2025 as compared to Rs. 63.07 Cr. during FY2024. On a standalone basis, AKCSL reported a profit after tax (PAT) of about Rs. 32.85 Cr. during FY2025 as compared to Rs. 31.80 Cr. during FY2024. Client concentration in merchant banking & corporate lending businesses In term of the lending business front, AKCFL has primarily focused on the corporate lending segment (mainly financial services and real estate focused HFCs) and hence the loans are relatively chunkier in nature, ticket size range between Rs.5 - 50 Cr. The performance of the borrowers is subject to the vulnerabilities in the underlying sectors. The key risks inherent in such corporate lending activities is that slippages in one or two large accounts may impact the operating performance of the company for that period. While AKCFL has in the past successfully exited risky exposures and curtailed its overall exposure to private sector corporates, occurrence of the future credit events can have a bearing on the performance and profitability of the company. AKCFL’s top ten exposures accounted for 45.96 percent of its total exposures as on March 31, 2025 and 46.81 percent of its total exposures as on June 30, 2025. Given the strong presence in the debt capital market, AKCFL also regularly churns its investments to reduce the concentration risk in the portfolio. While AKCFL has been following prudent risk management practices with respect to lending, collateral events like deterioration in the credit quality of borrowers and decline in security prices can impact its performance with regard to its asset quality and earnings profile. Acuité, believes that AKCFL’s future credit profile will be influenced by its ability to optimise the balance between high yields (i.e. more risky exposures) on one hand and healthy asset quality (i.e. low risk exposures) on the other. The ability to optimise its earnings while maintaining asset quality shall be critical. The maintenance of a healthy liquid profile on an ongoing basis (in the form of unencumbered cash or unutilised bank lines) will also be a key monitorable considering the corporate lending of the business. |
| ESG Factors Relevant for Rating |
| A K Group has a diversified revenue stream with a majority portion accruing from the financial services sector. Adoption and upkeep of strong business ethics is a sensitive material issue for the financial services business linked to debt capital market to avoid fraud, insider trading and other anti-competitive behavior. Other important governance issues relevant for the industry include management and board compensation, board independence as well as diversity, shareholder rights and role of audit committee. As regards the social factors, product or service quality has high materiality so as to minimise misinformation about the products to the customers and reduce reputational risks. For the industry, retention, and development of skilled manpower along with equal opportunity for employees is crucial. While data security is highly relevant due to company’s access to confidential client information, social initiatives such as enhancing financial literacy and improving financial inclusion are fairly important for the financial services sector. The material of environmental factors is low for this industry. AKCSL’s board comprises of a total of seven directors out of which three are independent directors and one woman director. The Group maintains adequate disclosures with respect to the various board level committees mainly Audit Committee, Nomination and Remuneration Committee along with Risk Management Committee. The Group also maintains adequate level of transparency with regards to business ethics issues which can be inferred from its policies relating to code of conduct, whistle blower protection and related party transactions. In terms of its social impact, the Group is making contributions to funds working towards socio economic development, environmental sustainability, eradicating poverty and promoting sanitation. |
| Rating Sensitivity |
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| Liquidity Position |
| Adequate |
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The Group has cash of Rs. 29.08 Cr. and quoted stock of debt securities of ~Rs. 529.24 Cr. as on March 31, 2025 as against ~Rs. 24.72 Cr. and quoted stock of debt securities of ~Rs. 286.92 Cr. , respectively as on March 31, 2024.
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| Outlook: Stable |
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| Other Factors affecting Rating |
| None |
| Key Financials - Standalone / Originator | ||||||||||||||||||||||||||||||||||||||||
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| Key Financials (Consolidated) | ||||||||||||||||||||||||||||||||||||||||
Ratios as per Acuité calculations |
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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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• Non-Banking Financing Entities: https://www.acuite.in/view-rating-criteria-44.htm • Default Recognition: https://www.acuite.in/view-rating-criteria-52.htm • Application Of Financial Ratios And Adjustments: https://www.acuite.in/view-rating-criteria-53.htm • Consolidation Of Companies: https://www.acuite.in/view-rating-criteria-60.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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