Note:- For activities or ratings of instruments falling under the purview of Financial Sector Regulators other than SEBI, the grievance / dispute redressal mechanisms and investor protection mechanisms provided by SEBI shall not be available.
Rating Rationale
Acuite has upgraded & withdrawn its long-term rating to ‘ACUITE B' (read as ACUITE B) from ‘ACUITE B-' (read as ACUITE B minus) on the Rs. 5.00 Cr. bank loan facilities of Shri Baiju Trading and Investment Private Limited. The rating has been withdrawn on account of the request received from the issuer and No Objection Certificate received from the banker.
Further, Acuité has also withdrawn its rating on the proposed long-term bank facilities of Rs.95.00 Cr. of Shri Baiju Trading and Investment Private Limited without assigning any rating as it is a proposed facility. The rating has been withdrawn on account of the request received from the issuer.
The rating withdrawal is in accordance with Acuité's policy on withdrawal of rating as applicable to the respective facility / instrument.
Rationale for Rating
The rating upgrade considers the migration from 'Issuer Non-Cooperating' status. The rating also draws comfort from management’s experience and established track in same line of business, moderate financial risk profile categorized by moderate net worth, comfortable gearing, comfortable debt protection metrics, along with adequate liquidity. The rating reflects the company’s strong revenue growth supported by increased order book position and expectation of sustenance of similar revenue growth in current year. However, these strengths are partially offset by firm’s high working capital operations, highly competitive industry marked by tender based nature of business and capital withdrawal risk associated with partnership firm.
About the company
Incorporated in 2019, Shri Baiju Trading and Investment Private Limited (SBTIPL) is registered as a Non-Banking Finance Corporation (NBFC) with RBI. The company provides different types of loan like Personal Loan, Loan Against Property (LAP), Business Loan etc, with majority portfolio dominated by personal loans (~80% in FY23). The company deals majorly in unsecured small ticket size loans with average ticket size being ~Rs.50k. For any loan above Rs.50k and upto Rs.15 lacs, a security is taken against the loan. The company is registered in Maharashtra, India. The directors include Mr. Atul Kumar, Mr. Suresh Kumar, Mr. Nishant Kumar Chobey, Mr. Mandeep Khatri and Ms. Supriya Sharma.
Unsupported Rating
Not Applicable.
Analytical Approach
Acuité has considered the standalone financial and business risk profile of SBTIPL to arrive at the rating.
Key Rating Drivers
Strength
Experienced management
SBTIPL is promoted by Mr. Atul Kumar who has experience of more than two and a half decades in the NBFC, capital markets, insurance, rural markets and micro finance space. The company is also in the process to on board other seasoned professionals in the near term, which shall further boost the business risk profile to an extent. Acuité believes that SBTIPL’s business profile will be supported by its experienced promoter base and will be able to leverage their expertise to raise funding and grow its loan book.
Weakness
Modest level of AUM
The company has a modest level of AUM of Rs.79.93 Cr. in FY25 as against Rs.58.69 Cr. in FY24. The AUM declined in FY2023 as most of the inter corporate loan was matured in FY2023. Prior to 2022, the company was mostly into inter corporate lending where the lending rates were relatively lower. The company full-fledged ventured in the Retail finance business since FY2023 mainly in rural areas like U.P, where the lending rates are high at ~30%-35%. The company aims to make it a complete micro retail loan book and refrain from corporate and any other big ticket size loan. Acuite expects that strategic shift towards micro finance retail loan shall help the company improve it's loan book in the near to medium term.
Geographical concentration risk
The company is exposed to high geographical concentration risk as ~80% of the loan book is concentrated towards Uttar Pradesh. Occurrence of events such as slowdown in economic activity or shifting of activity to other geographies could impact the cash flows of the borrowers, thereby impacting credit profile of SBTIPL's borrowers. The company’s ability to maintain its asset quality while increasing its presence in the newer geographies will remain a key rating monitorable.
Rating Sensitivity
Potential triggers (individual or collective) for an upward rating action:
Not Applicable
Potential triggers (individual or collective) for a downward rating action:
Not Applicable.
Liquidity Position
Adequate
The company has maintained positive cumulative cash flows over the past one year. As of FY25, it has cash and cash equivalents of Rs.0.16 crore. The company’s borrowings stood at Rs.45.18 crore as on FY25, with a debt-to-equity ratio of 1.37 times, indicating a moderately leveraged capital structure. Additionally, the company is in the process of raising funds in the near term, which is expected to further strengthen its liquidity position going forward.
Outlook: Not Applicable.
Other Factors affecting Rating
None.
Key Financials - Standalone / Originator
Particulars
Unit
FY25(Actual)
FY24(Actual)
Total Assets
Rs. Cr.
81.47
59.09
Total Income*
Rs. Cr.
10.65
4.71
PAT
Rs. Cr.
3.25
0.89
Net Worth
Rs. Cr.
33.04
29.79
Return on Average Assets (RoAA)
(%)
4.63
1.60
Return on Average Net Worth (RoNW)
(%)
10.36
3.05
Debt/Equity
Times
1.37
0.93
Gross NPA
(%)
1.26
1.12
Net NPA
(%)
1.26
1.12
*Total income equals to Net Interest Income plus other income
Status of non-cooperation with previous CRA (if applicable):
ACUITE B-
(Downgraded & Issuer not co-operating* from ACUITE B)
Proposed Cash Credit
Long Term
20.00
ACUITE B-
(Downgraded & Issuer not co-operating* from ACUITE B)
Term Loan
Long Term
5.00
ACUITE B-
(Downgraded & Issuer not co-operating* from ACUITE B)
07 Jan 2025
Term Loan
Long Term
5.00
ACUITE B
(Downgraded & Issuer not co-operating* from ACUITE B+ | Stable)
Proposed Term Loan
Long Term
75.00
ACUITE B
(Downgraded & Issuer not co-operating* from ACUITE B+ | Stable)
Proposed Cash Credit
Long Term
20.00
ACUITE B
(Downgraded & Issuer not co-operating* from ACUITE B+ | Stable)
10 Oct 2023
Term Loan
Long Term
5.00
ACUITE B+ | Stable
(Assigned)
Proposed Term Loan
Long Term
75.00
ACUITE B+ | Stable
(Assigned)
Proposed Cash Credit
Long Term
20.00
ACUITE B+ | Stable
(Assigned)
Lender’s Name
ISIN
Facilities
Listing Status
Regulated By
Date Of Issuance
Coupon Rate
Maturity Date
Quantum (Rs. Cr.)
Complexity Level
Rating
Not Applicable
Not avl. / Not appl.
Proposed Cash Credit
Unlisted
RBI
Not avl. / Not appl.
Not avl. / Not appl.
Not avl. / Not appl.
20.00
Simple
ACUITE Not Applicable | Withdrawn
Not Applicable
Not avl. / Not appl.
Proposed Term Loan
Unlisted
RBI
Not avl. / Not appl.
Not avl. / Not appl.
Not avl. / Not appl.
75.00
Simple
ACUITE Not Applicable | Withdrawn
Indostar Capital Finance Limited
Not avl. / Not appl.
Term Loan
Unlisted
RBI
Not avl. / Not appl.
Not avl. / Not appl.
05 Mar 2042
5.00
Simple
ACUITE B | Upgraded & Withdrawn ( from ACUITE B- )
Note:- For activities or ratings of instruments falling under the purview of Financial Sector Regulators other than SEBI, the grievance / dispute redressal mechanisms and investor protection mechanisms provided by SEBI shall not be available.
Contacts
List of instruments and names of regulators of the instruments
