S&P Global Ratings Upgrades Muthoot Finance Ratings to 'BB+' with 'Stable'

S&P Global Ratings has upgraded the Long Term issuer rating of Muthoot Finance Limited to 'BB+/B' with 'Stable' Outlook from 'BB/B' with 'Stable' Outlook.

S&P Global Ratings in its press release has stated, inter alia, "We raised our issuer credit ratings on Muthoot Finance to 'BB+/B' from 'BB/B'. This reflects our view that the company will maintain its excellent capital and earnings over the next 12 months while benefiting from the strengthening regulatory environment, particularly for upper-layer fincos in India. We expect some stress in the asset quality of Muthoot's microfinance subsidiary, in line with the industry. That said, we expect the company to maintain overall asset quality, thanks to the dominance of its highly collateralized gold loan portfolio.

Muthoot is one of the largest players in the gold loan market, focusing on loans against gold jewelry, although it is relatively small within the overall financial sector in India. We expect the company to maintain its strong market position despite increasing competition. Muthoot benefits from strong brand recognition and a proven track record in gold loans. While banks have become aggressive in this lucrative segment, we believe Muthoot will retain its market position due to its extensive experience and expertise in this niche."

George Alexander Muthoot, Managing Director, on this occasion, stated "the rating upgrade reflects our continued progress in strengthening our balance sheet, profitability, enhancing operational efficiencies, and executing sustainable growth strategies. It underscores the confidence that external stakeholders, including investors, partners, and customers, have in our ability to navigate dynamic market conditions while maintaining financial resilience and stability."

Shares of Muthoot Finance Limited was last trading in BSE at Rs. 2319.65 as compared to the previous close of Rs. 2290.35. The total number of shares traded during the day was 13301 in over 1762 trades.

The stock hit an intraday high of Rs. 2328.80 and intraday low of 2292.90. The net turnover during the day was Rs. 30782519.00.

Source : Equity Bulls

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MuthootFinance INE414G01012 NBFC SPGlobal SandPglobalRatings LongTermIssuerRating Upgrade