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| Product | Quantum (Rs. Cr) | Long Term Rating | Short Term Rating |
| Bank Loan Ratings | 13.00 | ACUITE BB+ | Downgraded | Issuer not co-operating* | - |
| Total Outstanding | 13.00 | - | - |
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Rating Rationale |
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Acuité has downgraded the long term rating to ‘ACUITE BB+’ (read as ACUITE double B plus) from ‘ACUITE BBB+ (CE)’ (read as ACUITE triple B plus (Credit Enhancement) on the Rs.13.00 Cr. bank facilities of Mahaveer Finance India Limited (MFIL). It is now flagged as Issuer Not Cooperating,and ratings are based on best available information,
The rating has been downgraded on account of information risk. |
| About the Company |
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Chennai based, Mahaveer Finance India Limited (MFIL) was incorporated in 1981. MFIL was registered with Reserve Bank of India (RBI) as a deposit taking Non-Banking Finance Company. In 2015, MFIL surrendered its deposit-taking license and also delisted itself from Madras Stock Exchange. MFIL, currently a Non-deposit taking NBFC-asset finance company, is engaged in used commercial vehicle financing in rural and semi-urban areas. The company is promoted by Mr. Mahaveerchand Dugar (Managing Director) and his sons, Mr. Deepak Dugar (Joint Managing Director) and Mr. Praveen Dugar (Executive Director). MFIL operates in 4 states and 1 union territory, namely Tamil Nadu, Andhra Pradesh, Telangana, Karnataka and Puducherry with 53 branches in 47 districts as on September 30, 2022.
MFIL’s AUM as on September 30, 2022 stood at Rs. 479.47 Cr. (Rs. 411.30 Cr. as on March 31, 2022, Rs. 322.92 Cr. as March 31, 2021 and Rs. 278.06 Cr. as on March 31, 2020). The AUM comprised of owned portfolio of Rs. 395 Cr. (82 percent of AUM) and off-book exposure of Rs. 84 Cr. (18 percent of AUM) as on September 30, 2022. The company takes off-book exposure through Direct Assignment and Pass Through Certificates. |
| Non-cooperation by the issuer/borrower |
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Acuité has been requesting for data, information and undertakings from the rated entity for conducting surveillance & review of the rating. However, the issuer/borrower failed to submit such information before the due date.
Acuité believes that information risk is a critical component in such ratings, and non-cooperation by the issuer along with unwillingness to provide information could be a sign of potential deterioration in its overall credit quality. This rating is, therefore, being flagged as “Issuer not-cooperating”, in line with prevailing SEBI regulations and Acuité’s policies. |
| Limitation regarding information availability |
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The rating is based on information available from sources other than the issuer/borrower (in the absence of information provided by the issuer/borrower). Acuité endeavored to gather information about the entity/industry from the public domain. Therefore, Acuité cautions lenders and investors regarding the use of such information, on which the indicative credit rating is based.
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| Rating Sensitivities |
| Not Applicable |
| Liquidity Position |
| Not Applicable |
| Outlook : |
| Not Applicable |
| Other Factors affecting Rating |
| None |
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| Status of non-cooperation with previous CRA |
| 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 • Banks And Financial Institutions: https://www.acuite.in/view-rating-criteria-45.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 |
| 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 |
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