Press Release Unacco Financial Services Private Limited October 19, 2022 Rating Reaffirmed & Withdrawn

Product	Quantum (Rs. Cr)	Long Term Rating	Short Term Rating
Bank Loan Ratings	33.00	ACUITE D | Reaffirmed & Withdrawn	-
Bank Loan Ratings	57.00	ACUITE C | Reaffirmed & Withdrawn	-
Total Outstanding Quantum (Rs. Cr)	0.00	-	-
Total Withdrawn Quantum (Rs. Cr)	90.00	-	-

Rating Rationale

­Acuite has reaffirmed and withdrawn the long term rating of ‘ACUITE D’ (read as ACUITE D) on Rs 33 Cr of bank facilities of Unacco Financial Services Private Limited (UFSPL).  Acuite has reaffirmed and withdrawn ‘ACUITE C’ (read as ACUITE C) on the Rs.57.00 Cr bank facilities of Unacco Financial Services Private Limited (UFSPL). This rating withdrawal is in accordance with Acuité’s policy on withdrawal of ratings. The rating is being withdrawn on account of request received from the company and the NOCs (No Objection Certificate) received from the bankers.

About the company

­Assam based, Unacco Financial Services Private Limited (UFSPL) was incorporated in 1992 as a non-Deposit taking Non-Banking Finance Company-Micro Finance Institution (NBFC-MFI). UFSPL provides microcredit to small entrepreneurs and small businesses where access to banking and related services are lacking. The company is headquartered in Guwahati, Assam. The company has its operations spread across 45 branches in Assam, Mizoram, Tripura, West Bengal, Manipur, Meghalaya, Arunachal Pradesh and Sikkim.

Analytical Approach

­Acuité has considered the standalone business and financial risk profiles of UFSPL to arrive at the rating.

Key Rating Drivers

Strength

Experienced management UFSPL is promoted by Mr. Irabanta Singh, who has over a decade experience in microfinance industry. He is adequately supported by other board members.  Mr. Wahengbam Prabin Kumar, who is nominee director, Mr.K. Deepak Singh (Director) has more than 10 Years of experience in Microfinance Sector. Mr Paritosh Kar Purkayastha (Independent director) is a Retd Assistant General Manager -State Bank of India. The extensive experience of the promoters is reflected through established relationship with its customers and bankers.   UFSPL is engaged in microfinance lending in Assam since 2008 and has established its presence since then by way of extending credit. It currently operates through a network of 45 branches spread across 31 districts. UFSPL is associated with 40,432 customers forming 15,801 JLG’s. UFSPL’s loan portfolio stood at Rs. 57.29 Cr on Jun 30, 2022.  Acuité believes that UFSPL will continue to benefit from its established position and the management’s experience in micro finance lending.

Weakness

Delay in Debt Servicing The repayment of the term loans has been delayed in one of the lender banks. This is mainly due to UFSPL's stretched liquidity position. Susceptibility to risks inherent to microfinance segment UFSPL’s primarily extends microcredit to small entrepreneurs and small businesses where access to banking and related services are lacking. Since financial assistance to economic challenged borrowers is a sensitive issue, from government stand point the regulatory dispensation in respect of the policies becomes relevant. Any changes in the regulatory environment impeding the ability of entities like UFSPL to enforce collections, etc will have an impact on its operational performance. Besides the regulatory risks, the inherent nature of the business renders the portfolios vulnerable to event risks such as natural calamities in the area of operations.  Acuité believes that containing additional slippages while maintaining the growth in the loan portfolio will be crucial. High geographic concentration UFSPL’s operations are concentrated in Assam, with the state accounting for 77.91 percent of its total portfolio as on June 30, 2022. While the company is gradually expanding into other states such as Mizoram and Manipur, there is an overall concentration of the lending business in the north eastern part of the country. Acuité believes that geographic concentration in its portfolio coupled with the inherent risk in microfinance segment will continue to weigh on the company’s credit profile over the near to medium term.

Rating Sensitivity

Collection efficiency and asset quality Improved liquidity buffers Profitability and capitalisation buffers Changes in regulatory environment

Material Covenants

­None

Liquidity Position

Poor

The company has poor liquidity marked by overdue in term loan repayments. The company has maintained cash and Bank balances of Rs 3.12 Cr as on March 31, 2022. The company avails term Loan facilities from Bank’s & NBFC’s/FI’s. UFSL’s has debt obligations of Rs 17.07 Cr over a period of one year as per ALM statement of March 31,2022.

Outlook:

­None

Other Factors affecting Rating

­None

Key Financials - Standalone / Originator

Particulars Unit FY22(Actual) FY21(Actual) Total Assets Rs Cr 78.61 104.59 Total Income Rs Cr 6.51 9.80 PAT Rs Cr 0.17 0.02 Net Worth Rs Cr 27.95 27.77 Return on Average Assets (RoAA) (%) 0.19 0.02 Return on Average Net worth (RoNW) (%) 0.63 0.07 Debt/Equity Times 1.61 2.55 Gross NPA (%) 3.44 8.02 Net NPA (%) 0.78 4.70 Total income equals to Net Interest Income plus other income.

Status of non-cooperation with previous CRA (if applicable):

­Crisil, vide its press release dated July 09, 2021 had reaffirmed the rating of Unacco Financial Services Private Limited to 'CRISIL D; ISSUER NOT COOPERATING’. Brickworks, vide its press release dated July 14, 2022 had reaffirmed the rating of Unacco Financial Services Private Limited to 'BWR D; ISSUER NOT COOPERATING’.

Any other information

­Acuité has not  receive the latest No Default Statement (NDS) from the rated entity.

Applicable Criteria

• 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

­https://www.acuite.in/view-rating-criteria-55.htm

Rating History

Date Name of Instruments/Facilities Term Amount (Rs. Cr) Rating/Outlook 29 Sep 2022 Term Loan Long Term 2.33 ACUITE C ( Issuer not co-operating*) Term Loan Long Term 8.00 ACUITE D ( Issuer not co-operating*) Term Loan Long Term 0.73 ACUITE C ( Issuer not co-operating*) Term Loan Long Term 3.19 ACUITE C ( Issuer not co-operating*) Term Loan Long Term 1.15 ACUITE C ( Issuer not co-operating*) Term Loan Long Term 3.49 ACUITE C ( Issuer not co-operating*) Term Loan Long Term 0.30 ACUITE C ( Issuer not co-operating*) Term Loan Long Term 0.61 ACUITE C ( Issuer not co-operating*) Term Loan Long Term 1.00 ACUITE C ( Issuer not co-operating*) Term Loan Long Term 4.70 ACUITE C ( Issuer not co-operating*) Term Loan Long Term 15.00 ACUITE D ( Issuer not co-operating*) Term Loan Long Term 7.06 ACUITE C ( Issuer not co-operating*) Proposed Bank Facility Long Term 1.96 ACUITE C ( Issuer not co-operating*) Term Loan Long Term 1.89 ACUITE C ( Issuer not co-operating*) Term Loan Long Term 3.29 ACUITE C ( Issuer not co-operating*) Term Loan Long Term 0.58 ACUITE C ( Issuer not co-operating*) Term Loan Long Term 0.83 ACUITE C ( Issuer not co-operating*) Term Loan Long Term 0.24 ACUITE C ( Issuer not co-operating*) Term Loan Long Term 5.10 ACUITE C ( Issuer not co-operating*) Term Loan Long Term 1.00 ACUITE C ( Issuer not co-operating*) Term Loan Long Term 2.50 ACUITE C ( Issuer not co-operating*) Term Loan Long Term 0.83 ACUITE C ( Issuer not co-operating*) Term Loan Long Term 2.24 ACUITE C ( Issuer not co-operating*) Term Loan Long Term 2.36 ACUITE C ( Issuer not co-operating*) Term Loan Long Term 1.86 ACUITE C ( Issuer not co-operating*) Term Loan Long Term 2.04 ACUITE C ( Issuer not co-operating*) Term Loan Long Term 10.00 ACUITE D ( Issuer not co-operating*) Term Loan Long Term 5.72 ACUITE C ( Issuer not co-operating*) 01 Jul 2021 Term Loan Long Term 5.10 ACUITE C (Downgraded from ACUITE BB | Stable) Term Loan Long Term 1.00 ACUITE C (Downgraded from ACUITE BB | Stable) Term Loan Long Term 0.58 ACUITE C (Downgraded from ACUITE BB | Stable) Term Loan Long Term 2.36 ACUITE C (Downgraded from ACUITE BB | Stable) Term Loan Long Term 2.24 ACUITE C (Downgraded from ACUITE BB | Stable) Proposed Bank Facility Long Term 1.96 ACUITE C (Downgraded from ACUITE BB | Stable) Term Loan Long Term 1.86 ACUITE C (Downgraded from ACUITE BB | Stable) Term Loan Long Term 0.30 ACUITE C (Downgraded from ACUITE BB | Stable) Term Loan Long Term 0.24 ACUITE C (Downgraded from ACUITE BB | Stable) Term Loan Long Term 2.50 ACUITE C (Downgraded from ACUITE BB | Stable) Term Loan Long Term 1.89 ACUITE C (Downgraded from ACUITE BB | Stable) Term Loan Long Term 7.06 ACUITE C (Downgraded from ACUITE BB | Stable) Term Loan Long Term 0.83 ACUITE C (Downgraded from ACUITE BB | Stable) Term Loan Long Term 2.04 ACUITE C (Downgraded from ACUITE BB | Stable) Term Loan Long Term 1.00 ACUITE C (Downgraded from ACUITE BB | Stable) Term Loan Long Term 8.00 ACUITE D (Downgraded from ACUITE BB | Stable) Term Loan Long Term 5.72 ACUITE C (Downgraded from ACUITE BB | Stable) Term Loan Long Term 1.15 ACUITE C (Downgraded from ACUITE BB | Stable) Term Loan Long Term 3.29 ACUITE C (Downgraded from ACUITE BB | Stable) Term Loan Long Term 3.49 ACUITE C (Downgraded from ACUITE BB | Stable) Term Loan Long Term 2.33 ACUITE C (Downgraded from ACUITE BB | Stable) Term Loan Long Term 4.70 ACUITE C (Downgraded from ACUITE BB | Stable) Term Loan Long Term 15.00 ACUITE D (Downgraded from ACUITE BB | Stable) Term Loan Long Term 0.61 ACUITE C (Downgraded from ACUITE BB | Stable) Term Loan Long Term 3.19 ACUITE C (Downgraded from ACUITE BB | Stable) Term Loan Long Term 0.83 ACUITE C (Downgraded from ACUITE BB | Stable) Term Loan Long Term 0.73 ACUITE C (Downgraded from ACUITE BB | Stable) Term Loan Long Term 10.00 ACUITE D (Downgraded from ACUITE BB | Stable) 15 Jan 2021 Term Loan Long Term 7.06 ACUITE BB | Stable (Assigned) Term Loan Long Term 2.36 ACUITE BB | Stable (Assigned) Term Loan Long Term 3.19 ACUITE BB | Stable (Assigned) Term Loan Long Term 1.00 ACUITE BB | Stable (Assigned) Term Loan Long Term 3.29 ACUITE BB | Stable (Assigned) Term Loan Long Term 10.00 ACUITE BB | Stable (Assigned) Term Loan Long Term 0.24 ACUITE BB | Stable (Assigned) Term Loan Long Term 1.86 ACUITE BB | Stable (Assigned) Term Loan Long Term 2.04 ACUITE BB | Stable (Assigned) Term Loan Long Term 0.83 ACUITE BB | Stable (Assigned) Term Loan Long Term 8.00 ACUITE BB | Stable (Assigned) Proposed Bank Facility Long Term 1.96 ACUITE BB | Stable (Assigned) Term Loan Long Term 15.00 ACUITE BB | Stable (Assigned) Term Loan Long Term 0.61 ACUITE BB | Stable (Assigned) Term Loan Long Term 0.73 ACUITE BB | Stable (Assigned) Term Loan Long Term 2.50 ACUITE BB | Stable (Assigned) Term Loan Long Term 1.00 ACUITE BB | Stable (Assigned) Term Loan Long Term 4.70 ACUITE BB | Stable (Assigned) Term Loan Long Term 3.49 ACUITE BB | Stable (Assigned) Term Loan Long Term 2.24 ACUITE BB | Stable (Assigned) Term Loan Long Term 0.30 ACUITE BB | Stable (Assigned) Term Loan Long Term 0.83 ACUITE BB | Stable (Assigned) Term Loan Long Term 5.10 ACUITE BB | Stable (Assigned) Term Loan Long Term 2.33 ACUITE BB | Stable (Assigned) Term Loan Long Term 1.89 ACUITE BB | Stable (Assigned) Term Loan Long Term 5.72 ACUITE BB | Stable (Assigned) Term Loan Long Term 1.15 ACUITE BB | Stable (Assigned) Term Loan Long Term 0.58 ACUITE BB | Stable (Assigned)

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Annexure - Details of instruments rated

Lender’s Name ISIN Facilities Date Of Issuance Coupon Rate Maturity Date Quantum (Rs. Cr.) Rating Not Applicable Not Applicable Proposed Term Loan Not Applicable Not Applicable Not Applicable 1.96 ACUITE C | Reaffirmed & Withdrawn North Eastern Development Finance Corporation Ltd. Not Applicable Term Loan 03-10-2018 Not available 27-02-2022 0.58 ACUITE C | Reaffirmed & Withdrawn North Eastern Development Finance Corporation Ltd. Not Applicable Term Loan 01-07-2019 Not available 11-02-2023 0.83 ACUITE C | Reaffirmed & Withdrawn North Eastern Development Finance Corporation Ltd. Not Applicable Term Loan 05-10-2017 Not available 13-04-2021 0.30 ACUITE C | Reaffirmed & Withdrawn North Eastern Development Finance Corporation Ltd. Not Applicable Term Loan 05-10-2017 Not available 21-02-2021 0.24 ACUITE C | Reaffirmed & Withdrawn North Eastern Development Finance Corporation Ltd. Not Applicable Term Loan 05-10-2017 Not available 13-03-2021 0.61 ACUITE C | Reaffirmed & Withdrawn North Eastern Development Finance Corporation Ltd. Not Applicable Term Loan 03-10-2018 Not available 27-02-2022 0.73 ACUITE C | Reaffirmed & Withdrawn State Bank of India Not Applicable Term Loan 22-10-2018 Not available 29-08-2021 2.24 ACUITE C | Reaffirmed & Withdrawn IDBI Bank Ltd. Not Applicable Term Loan 30-11-2018 Not available 30-01-2021 2.04 ACUITE C | Reaffirmed & Withdrawn Small Industries Development Bank of India Not Applicable Term Loan 07-03-2019 Not available 25-03-2022 8.00 ACUITE D | Reaffirmed & Withdrawn North Eastern Development Finance Corporation Ltd. Not Applicable Term Loan 03-10-2018 Not available 28-06-2022 1.15 ACUITE C | Reaffirmed & Withdrawn North Eastern Development Finance Corporation Ltd. Not Applicable Term Loan 01-07-2019 Not available 11-02-2023 0.83 ACUITE C | Reaffirmed & Withdrawn North Eastern Development Finance Corporation Ltd. Not Applicable Term Loan 10-03-2019 Not available 19-03-2022 3.49 ACUITE C | Reaffirmed & Withdrawn North Eastern Development Finance Corporation Ltd. Not Applicable Term Loan Not available Not available Not available 1.00 ACUITE C | Reaffirmed & Withdrawn MANAVEEYA DEVELOPMENT AND FINANCE PRIVATE LIMITED Not Applicable Term Loan 19-03-2019 Not available 15-03-2022 7.06 ACUITE C | Reaffirmed & Withdrawn Jain Sons Finlease Ltd. Not Applicable Term Loan 28-01-2019 Not available 28-02-2021 3.29 ACUITE C | Reaffirmed & Withdrawn IDFC First Bank Limited Not Applicable Term Loan 22-02-2018 Not available 09-03-2023 15.00 ACUITE D | Reaffirmed & Withdrawn IDFC First Bank Limited Not Applicable Term Loan 08-06-2018 Not available 26-06-2023 10.00 ACUITE D | Reaffirmed & Withdrawn Habitat Micro Build India Housing Finance Company Pvt. Ltd. Not Applicable Term Loan 29-03-2018 Not available 18-04-2021 1.00 ACUITE C | Reaffirmed & Withdrawn Arohan Financial Services (P) Ltd. Not Applicable Term Loan 24-09-2018 Not available 27-09-2021 5.72 ACUITE C | Reaffirmed & Withdrawn Bandhan Bank Not Applicable Term Loan 18-09-2019 Not available 21-09-2021 5.10 ACUITE C | Reaffirmed & Withdrawn Grameen Inpact Investment Not Applicable Term Loan 11-06-2019 Not available 17-06-2021 2.33 ACUITE C | Reaffirmed & Withdrawn Incred Capital Finacial Services Private Ltd. Not Applicable Term Loan 03-07-2019 Not available 17-04-2021 3.19 ACUITE C | Reaffirmed & Withdrawn Annapurna Microfinance Private Ltd. Not Applicable Term Loan 01-10-2019 Not available 11-07-2021 2.36 ACUITE C | Reaffirmed & Withdrawn Micro Units Development and Refinance Agency bank (MUDRA) Not Applicable Term Loan 06-09-2019 Not available 13-11-2022 1.86 ACUITE C | Reaffirmed & Withdrawn North Eastern Development Finance Corporation Ltd. Not Applicable Term Loan 01-07-2019 Not available 17-07-2022 4.70 ACUITE C | Reaffirmed & Withdrawn North Eastern Development Finance Corporation Ltd. Not Applicable Term Loan 01-07-2019 Not available 29-08-2022 2.50 ACUITE C | Reaffirmed & Withdrawn North Eastern Development Finance Corporation Ltd. Not Applicable Term Loan 01-07-2019 Not available 23-12-2022 1.89 ACUITE C | Reaffirmed & Withdrawn

Contacts

Analytical	Rating Desk
Mohit Jain Senior Vice President-Rating Operations Tel: 022-49294041 mohit.jain@acuite.in Kunda Aditii Senior Analyst-Rating Operations Tel: 022-49294065 aditii.kunda@acuite.in	Varsha Bist Senior Manager-Rating Operations Tel: 022-49294011 rating.desk@acuite.in

About Acuité Ratings & Research

­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.