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| Product | Quantum (Rs. Cr) | Long Term Rating | Short Term Rating |
| Bank Loan Ratings | 40.00 | ACUITE BBB- | Stable | Assigned | - |
| Total Outstanding | 40.00 | - | - |
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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 minus) on the Rs 40.00 crore bank facilities of Shree Biradev Finance Private Limited (SBFPL). The Outlook is 'Stable'.
Rationale for Rating The rating factors in the company’s experienced management team and long operational track record. The company has an operational track record of more than two decades in Vehicle Financing. The rating further factors in comfortable capital structure, healthy growth in AUM & disbursements and improvement in profitability levels. SBFPL’s Capital Adequacy Ratio (CAR) stood at 36.53 percent (prov.) as on March 31, 2024, which improved from 33.90 percent as on March 31, 2023. Networth has improved to Rs 64.70 Cr. (prov.) as on March 31,2024 as compared to Rs 51.93 Cr. as on March 31,2023 aided by internal accruals. The company’s AUM grew by ~15 percent to Rs 167.42 Crores (prov.) during FY 2024. The growth in AUM was on account of healthy disbursements levels at Rs 160.69 Crore during FY24 compared to Rs 155.47 Crore during FY23. The company reported a PAT of Rs 12.76 Cr. (prov.) during FY 2024 as compared to Rs 9.54 Cr. during FY 2023. The company maintained a healthy leverage of 1.75 times as on March 31, 2024 as compared to 2.09 times as on March 31, 2023. The rating also factors SBFPL’s moderate asset quality denoted by GNPA of 2.26% and NNPA of 1.50% as on 31 st March 2024 and on-time collections of 80.67 percent as on March 31,2024 as compared to 82.57 percent as on March 31, 2023. Going Forward, the ability of the company to scale up its loan book, while improving its asset quality and operating metrics will be Key rating monitorable. |
| About the company |
| Incorporated in 1994, Shree Biradev Finance Private Limited (SBFPL) is a Karnataka based non-deposit taking NBFC registered with RBI. The company is engaged in financing of two-wheelers, Three Wheelers, Four Wheelers, and Commercial vehicles. Shree Biradev Finance Private Ltd (SBFPL) is managed by four directors that is Mr Ramchandra Raghoji as Chairman and Managing Director, Meera Raghoji as a director, Nandini Raghoji as a CEO and director and Mr. Vishnu Chetan Keloji. Mr Ramchandra Raghoji and Mrs Meera Raghoji are having more than two decades of experience in the finance sector. The company has presence in thirteen districts. |
| Unsupported Rating |
| Not applicable |
| Analytical Approach |
| Acuite has considered the standalone business and financial risk profile of Shree Biradev Finance Private Limited (SBFPL). |
| Key Rating Drivers |
| Strength |
| Experienced and professional management team with long track record of operations Shree Biradev Finance Private Limited (SBFPL) has been in Vehicle finance business for the last thirty years. Shree Biradev Finance Private Ltd (SBFPL) is managed by four managing directors that is Mr Ramchandra Raghoji as Chairman and Managing Director, Ms. Meera Raghoji as a director and Ms. Nandini Raghoji as a CEO and director and Mr.Vishnu Chetan Keloji. Mr Ramchandra Raghoji and Mrs Meera Raghoji have more than two decades of experience in the finance sector. SBFPL has a comfortable capital structure marked by overall gearing of 1.75 times (prov.) as on March 31, 2024 (2.09 times as on March 31,2023). SBFPL’s Capital Adequacy Ratio (CAR) stood at 36.53 percent (prov.) as on March 31, 2024, which improved from 33.90 percent as on March 31, 2023. SBFPL’s SBFPL’s networth has improved to Rs 64.70 Cr. (prov.) as on March 31,2024 from Rs 51.93 Cr. as on March 31,2023 aided by internal accruals. Growth in AUM and Profitability metrics The Company’s AUM grew by ~15% percent to Rs 167.42 Crore (prov.) during FY 2024 as compared to Rs 145.57 Cr. during FY 2023. The growth in AUM was on account of healthy disbursements levels at Rs 160.69 Crore (prov.) during FY 2024 compared to Rs 155.47 Crore during FY 2023. The company reported a PAT of Rs 12.76 Cr. (prov.) during FY2024 as compared to Rs 9.54 Cr. during FY2023. The company reported a Total Interest income of Rs 28.77 Cr. (prov.) during FY2024 as compared to Rs 22.05 Cr. during FY2023. SBFPL’s earnings profile has improved owing to growth in AUM and disbursement levels. Acuité believes that SBFPL will continue to benefit from its experienced of management and operational track record in Vehicle Finance. Acuité expects the company to sustain its financial position on the back of its healthy capitalization buffers and maintaining a prudent capital structure. |
| Weakness |
| Small Scale of Operations with geographical concentration risk
SBFPL is engaged in vehicle financing business with ~98 percent of its loan portfolio in the state of Karnataka, of which ~45 percent of the total loan portfolio is concentrated in Gulbarga district in Karnataka. In FY 2024, SBFPL has expanded its operations in the state of Andhra Pradesh, currently it accounts for ~2 percent of its total loan portfolio. This exposes SBFPL to high geographical concentration risk. While the company has been focusing on loan portfolio growth over last few months, it continues to remain moderate at Rs 167.42 Crore (prov.) during FY 2024. Acuité believes that geographic concentration in its portfolio coupled with the limited scale of operations will continue to weigh on the company’s credit profile over the near to medium term. Marginal borrower profile with susceptibility to income shocks and Moderate asset quality SBFPL mainly focuses on micro business like kiranas/ general stores/traders, farmers, and relatively lower salaried people. The customers in this segment generally have limited credit history and their cash flows could be volatile and highly sensitive to minor business disruptions and external shocks. SBFPL recognizes NPA at 150+ dpd for FY24. SBFPL had moderate asset quality with GNPA levels at 2.26% as on March 31,2024 against 2.20% as on March 31,2023. Net NPA stood at 1.50% as on March 31, 2024 as against 1.59% as on March 31,2023. The company’s ability to maintain the asset quality in the new originations, and maintain field discipline will be important from a credit perspective. |
| Rating Sensitivity |
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| Liquidity Position |
| Adequate |
| As per ALM statement as on March 31, 2024, SBFPL has no negative cumulative mismatches. Th cash and cash equivalents stood at Rs. 1.28 Cr. (prov.) as on March 31, 2024. |
| Outlook: Stable |
| Acuité believes that SBFPL will maintain ‘Stable’ outlook over the near to medium term owing to the experience of promoters. The outlook may be revised to ‘Positive’ in case SBFPL demonstrates significant and sustainable growth in its scale of operations while mitigating asset quality risks in portfolio. Conversely, the outlook may be revised to ‘Negative’ in case of any challenges faced in scaling up operations, resource raising ability and in case the company faces higher than expected asset quality pressures or deterioration in profitability parameters. |
| Other Factors affecting Rating |
| None |
| Key Financials - Standalone / Originator | ||||||||||||||||||||||||||||||||||||||||||||
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| Status of non-cooperation with previous CRA (if applicable): |
| INFOMERICS, vide its press release dated June 13th, 2024 had denoted the rating of Shree Biradev Finance Private Limited as IVR BB/ Negative 'DOWNGRADED AND ISSUER NOT CO-OPERATING’. |
| 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 |
| Rating History : |
| Not applicable |
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