Press Release April 01, 2024 SANGHAMITHRA RURAL FINANCIAL SERVICES Rating Downgraded and Issuer not co-operating

Product	Quantum (Rs. Cr)	Long Term Rating	Short Term Rating
Bank Loan Ratings	300.00	ACUITE BB+ | Downgraded | Issuer not co-operating*	-
Total Outstanding	300.00	-	-

Rating Rationale

­Acuité has downgraded the long-term rating to ‘ACUITE BB+’ (read as ACUITE double B plus) from 'ACUITE BBB' (read as ACUITE triple B) on the Rs. 300.00 Cr. bank facilities of Sanghamithra Rural Financial Services (SRFS). The rating now flagged as 'Issuer not co-operating' and is based on the best available information The rating has been downgraded on account of information risk.

About the Company

­Incorporated in 1995, Bangalore based, Sanghamithra Rural Financial Services (SRFS) is a 'Section 8’ (under The Companies Act, 2013) non-profit organisation. It is promoted by Mysore Rehabilitation and development agency (MYRADA). The company extends micro credit through self-help groups (SHGs) model since 2000, and through joint liability group (JLG) model since January 2018. SRFS is led by Mr. Aloysius. P. Fernandez. The company has presence in three states namely Karnataka, Tamil Nadu and Maharashtra and operates through a network of 111 branches, with 101072 members as on September 30,2022.

Unsupported Rating

­Not Applicable

Non-cooperation by the issuer/borrower

­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 noncooperation by the issuer along with an 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

­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 noncooperation by the issuer along with an 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.

Rating Sensitivities

­"­No information provided by the issuer / available for Acuite to comment upon."

Liquidity Position

­"No information provided by the issuer / available for Acuite to comment upon."

Outlook

­Not Applicable

Other Factors affecting Rating

­None

Key Financials:

Particulars Unit FY2023 (Actual) FY2022 (Actual) Total Assets Rs Cr 280.43 291.98 Total Income* Rs Cr 23.92 17.08 PAT Rs Cr 8.62 5.53 Networth Rs Cr 74.69 67.69 Return on Average Assets (RoAA) (%) 3.01 2.19 Return on Net worth (RoNW) (%) 12.10 8.35 Total Debt/Tangible Networth Times 2.69 3.25 Gross NPA (%) - 3.33% Net NPA (%) - 1.09% *Total income equals to Net interest income plus ot her income

Status of non-cooperation with previous CRA

­Not Applicable

Any other information

­­Acuite has received the NDS for the month of February 2024 from the rated entity, confirming the no default on its debt obligations

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

­­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.

Rating History

Date Name of Instruments/Facilities Term Amount (Rs. Cr) Rating/Outlook 02 Jan 2023 Cash Credit Long Term 5.55 ACUITE BBB | Stable (Reaffirmed) Cash Credit Long Term 3.20 ACUITE BBB | Stable (Assigned) Cash Credit Long Term 5.00 ACUITE BBB | Stable (Reaffirmed) Proposed Long Term Bank Facility Long Term 30.20 ACUITE BBB | Stable (Assigned) Proposed Long Term Bank Facility Long Term 79.91 ACUITE BBB | Stable (Reaffirmed) Secured Overdraft Long Term 35.00 ACUITE BBB | Stable (Reaffirmed) Secured Overdraft Long Term 35.00 ACUITE BBB | Stable (Reaffirmed) Term Loan Long Term 1.91 ACUITE BBB | Stable (Reaffirmed) Term Loan Long Term 10.00 ACUITE BBB | Stable (Reaffirmed) Term Loan Long Term 9.83 ACUITE BBB | Stable (Reaffirmed) Term Loan Long Term 2.50 ACUITE BBB | Stable (Reaffirmed) Term Loan Long Term 25.00 ACUITE BBB | Stable (Reaffirmed) Term Loan Long Term 3.71 ACUITE BBB | Stable (Reaffirmed) Term Loan Long Term 20.10 ACUITE BBB | Stable (Reaffirmed) Term Loan Long Term 6.67 ACUITE BBB | Stable (Reaffirmed) Term Loan Long Term 1.32 ACUITE BBB | Stable (Reaffirmed) Term Loan Long Term 16.60 ACUITE BBB | Stable (Assigned) Term Loan Long Term 8.50 ACUITE BBB | Stable (Reaffirmed) 20 Apr 2022 Cash Credit Long Term 5.00 ACUITE BBB | Stable (Reaffirmed) Cash Credit Long Term 20.00 ACUITE BBB | Stable (Reaffirmed) Secured Overdraft Long Term 15.00 ACUITE BBB | Stable (Reaffirmed) Secured Overdraft Long Term 25.00 ACUITE BBB | Stable (Reaffirmed) Secured Overdraft Long Term 20.00 ACUITE BBB | Stable (Reaffirmed) Secured Overdraft Long Term 10.00 ACUITE BBB | Stable (Reaffirmed) Term Loan Long Term 0.01 ACUITE BBB | Stable (Reaffirmed) Term Loan Long Term 7.36 ACUITE BBB | Stable (Reaffirmed) Term Loan Long Term 9.63 ACUITE BBB | Stable (Reaffirmed) Term Loan Long Term 10.00 ACUITE BBB | Stable (Assigned) Term Loan Long Term 10.00 ACUITE BBB | Stable (Assigned) Term Loan Long Term 10.00 ACUITE BBB | Stable (Assigned) Term Loan Long Term 20.00 ACUITE BBB | Stable (Assigned) Term Loan Long Term 4.00 ACUITE BBB | Stable (Reaffirmed) Term Loan Long Term 6.00 ACUITE BBB | Stable (Reaffirmed) Term Loan Long Term 30.00 ACUITE BBB | Stable (Reaffirmed) Term Loan Long Term 8.00 ACUITE BBB | Stable (Reaffirmed) Term Loan Long Term 15.00 ACUITE BBB | Stable (Reaffirmed) Term Loan Long Term 25.00 ACUITE BBB | Stable (Reaffirmed)

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Annexure - Details of instruments rated

Lender’s Name ISIN Facilities Date Of Issuance Coupon Rate Maturity Date Quantum (Rs. Cr.) Complexity Level Rating Bank of Baroda Not avl. / Not appl. Cash Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 5.00 Simple ACUITE BB+ | Downgraded | Issuer not co-operating* ( from ACUITE BBB ) State Bank of India Not avl. / Not appl. Cash Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 5.55 Simple ACUITE BB+ | Downgraded | Issuer not co-operating* ( from ACUITE BBB ) State Bank of India Not avl. / Not appl. Cash Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 3.20 Simple ACUITE BB+ | Downgraded | Issuer not co-operating* ( from ACUITE BBB ) Not Applicable Not avl. / Not appl. Proposed Long Term Bank Facility Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 79.91 Simple ACUITE BB+ | Downgraded | Issuer not co-operating* ( from ACUITE BBB ) Not Applicable Not avl. / Not appl. Proposed Long Term Bank Facility Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 30.20 Simple ACUITE BB+ | Downgraded | Issuer not co-operating* ( from ACUITE BBB ) Canara Bank Not avl. / Not appl. Secured Overdraft Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 35.00 Simple ACUITE BB+ | Downgraded | Issuer not co-operating* ( from ACUITE BBB ) Indian Bank Not avl. / Not appl. Secured Overdraft Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 35.00 Simple ACUITE BB+ | Downgraded | Issuer not co-operating* ( from ACUITE BBB ) Indian Bank Not avl. / Not appl. Term Loan Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 1.91 Simple ACUITE BB+ | Downgraded | Issuer not co-operating* ( from ACUITE BBB ) Nabsamruddhi Finance Limited Not avl. / Not appl. Term Loan Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 10.00 Simple ACUITE BB+ | Downgraded | Issuer not co-operating* ( from ACUITE BBB ) Small Industries Development Bank of India Not avl. / Not appl. Term Loan Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 9.83 Simple ACUITE BB+ | Downgraded | Issuer not co-operating* ( from ACUITE BBB ) Small Industries Development Bank of India Not avl. / Not appl. Term Loan Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 2.50 Simple ACUITE BB+ | Downgraded | Issuer not co-operating* ( from ACUITE BBB ) State Bank of India Not avl. / Not appl. Term Loan Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 25.00 Simple ACUITE BB+ | Downgraded | Issuer not co-operating* ( from ACUITE BBB ) Union Bank of India Not avl. / Not appl. Term Loan Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 8.50 Simple ACUITE BB+ | Downgraded | Issuer not co-operating* ( from ACUITE BBB ) Canara Bank Not avl. / Not appl. Term Loan Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 6.67 Simple ACUITE BB+ | Downgraded | Issuer not co-operating* ( from ACUITE BBB ) Federal Bank Not avl. / Not appl. Term Loan Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 1.32 Simple ACUITE BB+ | Downgraded | Issuer not co-operating* ( from ACUITE BBB ) Bank of Baroda Not avl. / Not appl. Term Loan Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 3.71 Simple ACUITE BB+ | Downgraded | Issuer not co-operating* ( from ACUITE BBB ) Bank of Maharashtra Not avl. / Not appl. Term Loan Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 20.10 Simple ACUITE BB+ | Downgraded | Issuer not co-operating* ( from ACUITE BBB ) Union Bank of India Not avl. / Not appl. Term Loan Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 16.60 Simple ACUITE BB+ | Downgraded | Issuer not co-operating* ( from ACUITE BBB )

Contacts

Analytical Details	Contact Details
Mohit Jain Senior Vice President - Rating Operations Tel: 022–49294017 mohit.jain@acuite.in Rohit Advani Lead Analyst - Rating Operations Tel: 022-49294065 rohit.advani@acuite.in	Contact details exclusively for investors and lenders Mob: +91 8591310146 Email ID: analyticalsupport@acuite.in Tel: 022-49294011 rating.desk@acuite.in

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Acuité is a full-service Credit Rating Agency registered with the Securities & Exchange Board of India (SEBI). The company received RBI Accreditation as an External Credit Assessment Institution (ECAI) for Bank Loan Ratings under BASEL-II norms in the year 2012. Acuité has assigned ratings to various securities, debt instruments and bank facilities of entities spread across the country and across a wide cross section of industries. It has its Registered and Head Office in Kanjurmarg, Mumbai. Disclaimer: An Acuité rating does not constitute an audit of the rated entity and should not be treated as a recommendation or opinion that is intended to substitute for a financial adviser's or investor's independent assessment of whether to buy, sell or hold any security. Ratings assigned by Acuité are based on the data and information provided by the issuer and obtained from other reliable sources. Although reasonable care has been taken to ensure that the data and information is true, Acuité, in particular, makes no representation or warranty, expressed or implied with respect to the adequacy, accuracy or completeness of the information relied upon. Acuité is not responsible for any errors or omissions and especially states that it has no financial liability whatsoever for any direct, indirect or consequential loss of any kind, arising from the use of its ratings. Ratings assigned by Acuité are subject to a process of surveillance which may lead to a revision in ratings as and when the circumstances so warrant. Please visit our website (www.acuite.in) for the latest information on any instrument rated by Acuité. Please visit https://www.acuite.in/faqs.htm to refer FAQs on Credit Rating.