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| Product | Quantum (Rs. Cr) | Long Term Rating | Short Term Rating |
| Bank Loan Ratings | 29.51 | ACUITE BBB | Stable | Assigned | - |
| Bank Loan Ratings | 90.49 | ACUITE BBB | Stable | Upgraded | - |
| Total Outstanding | 120.00 | - | - |
| Total Withdrawn | 0.00 | - | - |
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Rating Rationale |
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Acuité has assigned the long-term rating of ‘ACUITE BBB’ (read as ACUITE triple B) on the Rs. 29.51 crore bank facilities of Mulamoottil Financiers Limited (MFL). The outlook is 'Stable'. Acuité has upgraded the long-term rating to ‘ACUITE BBB’ (read as ACUITE triple B) from ‘ACUITE BBB-’ (read as ACUITE triple B minus) on the Rs. 90.49 crore bank facilities of Mulamoottil Financiers Limited (MFL). The outlook is ‘Stable’. Rationale for the rating The upgrade in the rating factors in the experienced promoters, healthy asset quality and comfortable capitalization levels. MFL reported a CRAR of 32.63 percent (Tier 1: 25.04 percent) and gearing level stood at 3.07 times as on March 31, 2025. The rating takes into consideration in the company’s lending profile towards liquid gold loans & improvement in disbursal levels. The rating further draws comfort from sound asset quality metrics marked by on time portfolio at 99.75 percent and Gross Non-Performing Assets (GNPA) at nil as on March 31, 2025. Profitability has also improved in FY25 as PAT is Rs 11.03 Cr. and in FY24 it was Rs.9.95 Cr. The rating is, however, constrained by geographical concentration, modest scale of operations and highly competitive business of gold loans. Going forward, the company’s ability to raise capital, profitably scale-up its loan portfolio while maintaining the asset quality will be a key monitorable. |
| About the company |
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Mulamoottil Financiers Limited (Formerly Mulamoottil Leasing and Hire Purchase Ltd) a Non- Banking Financial Company (NBFC) incorporated in February 1994 based out of central Travancore area of Kerala mainly operates in providing gold loan primarily to individuals in rural areas. The company is being promoted by Mr. Jacob Thomas and his family members. The company has expanded its operations in the state of Kerala with a network of 178 branches. MFL is a part of the Mulamoottil Group, the group is also engaged in other businesses like hospitality, finance, retail amongst others. |
| Unsupported Rating |
| Not Applicable. |
| Analytical Approach |
| Acuité has considered the standalone financial and business risk profile of MFL to arrive at the rating. |
| Key Rating Drivers |
| Strength |
| Experienced promoters The promoters have more than two decades of experience and a strong understanding of customer profile in the region they operate. Given the company’s long track record of presence of more than three decades in the state of Kerala, the company has built up good credibility among the borrowers. The company is promoted by Mr. Jacob Thomas and his family members. He holds ~55.62 percent of shares individually of MFL as on March 31, 2025, while rest of the shareholding is held by other family members. Mr. Jacob Thomas, the manging director of the company, has long-standing experience in various business & also in financial services. The day-to-day operation of MFL is led by Dr. Ashly Thomas Jacob who is supported by his team of professionals. Acuité believes that MFL will continue to benefit from its established presence of the Mulamoottil Group and experience of the promoters in the gold loan segment. Healthy Asset Quality Asset quality has shown improvement marked by on time portfolio at 99.75 percent as on March 31, 2025. MFL reported a Gross NPA and Net NPA as nil as on FY25.The improvement was led by the management’s focus on collection toward delinquent assets. Going forward, the company’s ability to maintain asset quality will be key monitorable and risk arising from adverse gold prices would be critical. |
| Weakness |
| Moderate scale of Operations with high geographical concentration. Mulamoottil Financiers limited commenced its operation in 1994 and currently has a loan portfolio of Rs. 231.68 Cr. as on March 31, 2025 as against Rs. 197.37 Cr. as on March 31, 2024, and Rs. 149.97 Cr. in FY2023. MFL is a mid-sized but a stable growing player in gold loans. MFL’s portfolio is currently concentrated in 5 districts of Kerala (i.e Pathanamthitta, Kottayam, Alappuzha, Kollam, Idukki) and has a branch base of 178 branches as on March 31, 2025. Going forward, MFL plans to expand its network of branches in the neighbouring states of Kerala. The company's performance is expected to remain exposed to the competitive landscape in these regions and the occurrence of events such as natural calamities, may adversely impact the credit profile of the borrowers. However, the geographical concentration could evolve into being a niche in the gold loan market in Kerala for MFL as its primary focus and vision is to serve the rural community of Kerala and help this part of the community to grow. Moreover, MFL does plan to penetrate this segment by opening more branches in the coming year which would help build its foundation in these communities. Furthermore, there is a drive to empower women in these areas and that is denoted by the high employment ratio of 95% which is in favor of women. Acuité believes that geographical concentration will continue to weigh on the company’s credit profile, however the development in how this specific niche of operating in rural areas is developed would be key a monitorable. Limited Financial Flexibility The capital structure of MFL is supported by Networth of Rs. 63.08 Cr., Total debt of Rs. 193.39 Cr. and resulted gearing of ~3.07 times as on March 31, 2025. MFL borrowing profile comprises non-convertible debentures followed by unsecured non-convertible subordinate debt and facilities from Federal Bank and State Bank of India in the form of CC/OD, WCDL, Term Loan facilities. The NCDs are privately placed with friends and family of the promoters for a tenor of 3 to 7 years. As the company has availed banking facility from three banks, the debt profile of MFL remains largely dependent on promoters for funding requirement. The company is in talks with other banks for raising additional funds. Acuite believes that the ability of the company to mobilize additional funding through debt/equity will be critical. |
| Rating Sensitivity |
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| Liquidity Position |
| Adequate |
| MFL’s overall liquidity profile remains adequate with no negative cumulative mismatches in near to medium term as per ALM dated March 31, 2025. The company has cash & bank balances of Rs. 13.60 Crore as of March 31, 2025. |
| Outlook: |
| Stable. |
| 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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