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| Product | Quantum (Rs. Cr) | Long Term Rating | Short Term Rating |
| Bank Loan Ratings | 50.00 | ACUITE BBB | Stable | Assigned | - |
| Bank Loan Ratings | 80.00 | ACUITE BBB | Stable | Upgraded | - |
| Non Convertible Debentures (NCD) | 100.00 | ACUITE BBB | Stable | Assigned | - |
| Non Convertible Debentures (NCD) | 80.00 | ACUITE BBB | Stable | Upgraded | - |
| Total Outstanding | 310.00 | - | - |
| Total Withdrawn | 0.00 | - | - |
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Rating Rationale |
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Acuité has upgraded the long-term rating of ‘ACUITE BBB-’ (read as ACUITE triple B minus) to ‘ACUITE BBB’ (read as ACUITE triple B) on the Rs. 80.00 Crore bank facilities of Branch International Financial Services Private Limited (BIFSPL). The outlook is ‘Stable'.
Acuité has assigned the long-term rating of ‘ACUITE BBB’ (read as ACUITE triple B) on the Rs. 50.00 Crore bank facilities of Branch International Financial Services Private Limited (BIFSPL). The outlook is ‘Stable'. Acuité has upgraded the long-term rating of ‘ACUITE BBB-’ (read as ACUITE triple B minus) to ‘ACUITE BBB’ (read as ACUITE triple B) on the Rs. 80.00 Crore Non-Convertible Debentures of Branch International Financial Services Private Limited (BIFSPL). The outlook is ‘Stable'. Acuité has assigned the long-term rating of ‘ACUITE BBB’ (read as ACUITE triple B) on the Rs. 100.00 Crore on Non-Convertible Debentures of Branch International Financial Services Private Limited (BIFSPL). The outlook is ‘Stable'. Rationale for rating The upgrade in the rating factors the company’s experienced promoters, growth in AUM and business performance and comfortable capitalisation. The promoters of the company have helped build a scalable business model with technology driven digital lending platform which has aided the company to grow it’s scale of operations where the company made disbursements of Rs 5128.44 Cr. in FY25 (provisional) as against Rs 2066.20 Cr. in FY24. This has fueled the AUM to grow from Rs. 400.30 Cr. as on March 31, 2024 to Rs. 908.72 Cr. as on March 31, 2025 (provisional). The company reported PAT of ~Rs. 103.91 Cr. during FY25 (provisional) as against ~Rs.71.02 Cr. during FY24. The rating also factors in the regular capital infusion by the promoters with Rs 36.25 Cr. received in FY25 and expected capital infusion of ~Rs. 120 Cr. in FY26. The company has comfortable capital structure marked with net worth of Rs 262.26 Cr. and total debt of Rs 482.41 Cr. resulting in gearing of 1.84 times as on March 31, 2025 (provisional) .
These strengths are partially offset by high credit costs and short-term unsecured nature of loan portfolio. The credit cost (write-off and provision) during FY25 (provisional) increased to Rs. 398.18 Cr. as against Rs. 139.68 Cr. during FY24. However for FY25, the net write-off remained contained at ~5% of disbursements. Acuité believes the ability of BIFSPL to profitably scale up its portfolio while maintaining robustness of its technology platform given the evolving nature of FinTech model and containing credit costs is a key monitorable. |
| About the company |
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Mumbai based Branch International Financial Services Private Limited was incorporated in the year 2017 and is engaged in the business of providing unsecured personal loans through mobile based application. Mr. Matthew Joseph Flannery and Mr. Neeraj Gupta are the directors of the company.
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| Unsupported Rating |
| Not applicable |
| Analytical Approach |
| Acuité has taken Standalone approach to assess the BIFSPL. |
| Key Rating Drivers |
| Strength |
| Comfortable Capitalization and Gearing
BIFSPL is a wholly owned subsidiary of Branch International Inc, USA. which has been able to raise more than 100 million dollars from global investors since 2015. BIFSPL has received capital infusion in regular intervals from its parent company with the infusion amounting to Rs 36.27 Cr. received in FY25 and expected capital infusion of ~Rs. 120 Cr. in FY26. The company has comfortable capital structure marked with net worth of Rs 262.26 Cr. and total debt of Rs 482.41 Cr. resulting in gearing of 1.84 times as on March 31, 2025 (provisional). Capital adequacy profile of the company remains comfortable with the overall capital adequacy ratio (CAR) of 41.57% as on March 31, 2025 (provisional).
Acuité expects BIFSPL's capital structure and business to continue to benefit from fund raising ability from investors. Technology driven scalable business model BIFSPL follows digital lending model with majority of credit underwriting process performed digitally over in-house technology platform “Branch”, owned by parent company, Branch International which leverages self-learning algorithm. This enables the company to achieve scalability in business at a faster pace with well-defined risk and rule engines continuously monitoring asset quality metrics.
Growth in scale of operations and improving profitability The company made disbursements of Rs 5128.44 Cr. in FY25 (provisional) as against Rs 2066.20 Cr. in FY24. This has fuelled the AUM to grow from Rs. 400.30 Cr. as on March 31, 2024 to Rs. 908.72 Cr. as on March 31, 2025 (provisional). The company reported PAT of ~Rs. 103.91 Cr. during FY25 (provisional) as against ~Rs.71.02 Cr. during FY24. The total income (net of interest expense) increased from Rs. 335.86 Cr. during FY24 to Rs. 769.53 Cr. during FY25 (provisional).
Going forward the company's ability to scale the business while improving its financial metrics will be a key monitorable. |
| Weakness |
| Moderate asset quality and High credit costs
BIFSPL reported NIL GNPA and NNPA as on March 2025 largely on account of write offs. However, the slippages in softer buckets 1+dpd upto 90 dpd remain moderate accounting to 10.32 percent of the AUM as on March 31, 2025 (provisional). As the company writes off the loans that slip into the 90+dpd bucket, the headline asset quality metrics remain healthy but due to the write offs, the credit costs remain on the higher side for the company. Hence, any slippages from the softer buckets could impact the credit profile of the company. The credit cost (write-off and provision) during FY25 (provisional) increased to Rs. 398.18 Cr. as against Rs. 139.86 Cr. during FY24. However for FY25, the net write-off remained contained at ~5% of disbursements.
Acuite believes the ability of BIFSPL to contain asset quality risks through efficient underwriting and collection given the inherent nature of the portfolio and evolving data analytics and machine learning will be crucial. Evolving nature of fintech business model; technology and regulatory risks Given that the digital lending particularly in B2C segment is evolving and innovative technology is the backbone of fintech business model, the company is exposed to technology risks encompassing data security, privacy and technology failure. Since all the business functions including data storage, disbursals and collections is done digitally, any breach shall expose the company to cyber events and liabilities arising thereon. Also, the company is also exposed to evolving regulatory developments given that the fintech business model is at nascent stage. |
| Rating Sensitivity |
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| All Covenants |
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For ISIN INE12VA07264, the financial covenants are as under:
1. GNPA to be less than 2% and NNPA to be less than 1% 2. During the period from the Deemed Date of Allotment until the Final Redemption Date, the Company shall maintain, on a standalone basis, that the number of days past due (90 dpd) Affirmative Covenants Negative Covenants plus write off on disbursed twelve-month basis, shall not exceed 8.5%. Amounts, calculated on a trailing 3. No cumulative mismatch of ALM till the tenure of the issuance. Undrawn sanctions loans to be excluded 4. PAT of Branch International India to be positive during the tenor of the issuance 5. Prior approval in case of change in Shareholding resulting the issuer not being wholly owned subsidiary of parent Branch International Inc 6. Networth to be more than 100 crores 7. Maximum leverage ratio (computed as total outstanding borrowings/ net worth less deferred tax) shall be 2.5x 8. PAR 90+ <=20% of TNW 9. Mr Neeraj Gupta shall continue to hold Managing position For INE12VA07348, the financial covenants are as under: 1. Total Debt (excluding ECB from the Parent) to Adjusted Tangible Net Worth (ATNW) ratio shall not exceed 3x during currency of the facility. 2. Maintain the minimum rating of BBB-(Stable) during the tenure of the facility 3. Write offs not to exceed 8% of total disbursement in any quarter 4. Net Advances to remain at least 750 Cr during tenor of the facility 5. No change in Provisioning, Write off & Liquidity Policies during the tenure of facility 6. Current monthly collection efficiency* not to drop below 85% [*Current Collection Efficiency (%) = (EMI Collected in current month for the due month Prepayments of current months EMI)/ Current month EMI demand * 100] 7. The Borrower to remain profitable during the tenure of the facility. This will be tested on quarterly basis 8. No loans/Advances to any related party/entity, by Borrower 9. Cumulative mismatch in ALM should be positive for all the buckets 10. No change in shareholding and control by Branch International Inc 11. Dividends to be paid only out of the distributable profits and free reserves relating to that year and after setting off accumulated losses (if any) and after making al due and necessary provisions, provided that there have been no defaults in repayments under seek the prior written consent of the Lender before declaring dividends. 12. Always maintain all security cover with assets in the form of loan receivables 13. Borrowers loan book must have par 30 of less than 12% as a portion of Principal Outstanding during the current of facility For INE12VA07389, the financial covenants are as under: 1. GNPA to be less than 2% and NNPA to be less than 1%
2. During the period from the Deemed Date of Allotment until the Final Redemption Date, the Company shall maintain, on a standalone basis, that the number of days past due (90 dpd) Affirmative Covenants Negative Covenants plus write off on disbursed twelve-month basis, shall not exceed 8.5%. Amounts, calculated on a trailing
3. No cumulative mismatch of ALM till the tenure of the issuance. Undrawn sanctions loans to be excluded
4. Operating Profit (PBT + Depreciation) of Branch International India (BIFSPL)to be maintained minimum 15 Crore on a quarterly
5. Prior approval in case of change in Shareholding resulting the issuer not being wholly owned subsidiary of parent Branch International Inc
6. Networth to be more than 100 crores
7. Maximum leverage ratio (computed as total outstanding borrowings/ net worth less deferred tax) shall be 2.5x
8. Maintain Tier 1 capital ratio >=15% during the tenor of the issuance
9. Maintain a Capital Adequacy Ratio (CRAR) >= 30% during the tenor of the issuance (While calculation of Tier 2 Capital, 100% of general provisions are to be allowed)
10. PAR 90+ <=20% of TNW
11. Mr Neeraj Gupta shall continue to hold Managing position
12. LTV <=75% where LTV= Total Debt/(Cash+ Loan Receivables)
13. The Company shall maintain an average monthly free cash balance of Rs 12 Crore (including cash balance & loan related receivables from payment gateways if any.)
For INE12VA07371, the financial covenants are as under: 1. GNPA to be less than 2% and NNPA to be less than 1%
2. During the period from the Deemed Date of Allotment until the Final Redemption Date, the Company shall maintain, on a standalone basis, that the number of days past due (90 dpd). Affirmative Covenants Negative Covenants plus write off on disbursed twelve-month basis, shall not exceed 8.5%. Amounts, calculated on a trailing
3. No cumulative mismatch of ALM till the tenure of the issuance. Undrawn sanctions loans to be excluded
4. PAT of Branch International India to be positive during the tenor of the issuance
5. Prior approval in case of change in Shareholding resulting the issuer not being wholly owned subsidiary of parent Branch International Inc
6. Networth to be more than 100 crores
7. Maximum leverage ratio (computed as total outstanding borrowings/ net worth less deferred tax) shall be 2.5x
8. Tier 1 capital ratio >=15%
9. Maintain a Capital Adequacy Ratio (CRAR) >= 30% during the tenor of the issuance (While calculation of Tier 2 Capital, 100% of general provisions are to be allowed)
10. PAR 90+ <=20% of TNW
11. Mr Neeraj Gupta shall continue to hold Managing position
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| Liquidity Position |
| Adequate |
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BIFSPL reported adequate liquidity profile as on March 31, 2025 with no negative cumulative mismatches in near to medium term. BIFSPL’s cash and cash equivalents stood at Rs. 65.94 crore as on March 31, 2025 (provisional). The company additionally has unutilised limits of Rs. 113 Cr. as on March 31, 2025.
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| 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 |
| 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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