IFMR Capital has been assigned a long-term-rating of LA- (pronounced L A minus) for its debt programmes by ICRA. The rating, which has been assigned a ‘Stable outlook’, comes at a time when the microfinance sector is clouded by regulatory and political risk. The ratings are the amongst highest long term ratings available to any entities involved in the microfinance space and in light of the current scenario underscores IFMR Capital’s sound understanding of the microfinance sector and its rigorous due diligence and monitoring system.
The rating visit was conducted over two days in mid-October in IFMR Capital’s office and involved detailed discussions with the Board and senior management. The ICRA team also went through the detailed operating methodology of the various divisions of IFMR Capital and its overall business strategy and plan. This rating highlights IFMR Capital’s adequate credit quality driven by its strong underwriting and monitoring systems, governance structure and an experienced management team, which are likely to help the company scale up its operations profitably in a niche microfinance market segment. Additionally, IFMR Capital intends to maintain a conservative capital structure and have a comfortable liquidity profile due to the short duration of its assets. IFMR has a healthy earnings profile, comprised of investment and interest income on one side and a steady fee based income on the other.
Till date IFMR Capital has arranged securitization transactions totalling INR 3.62 billion and provided loans to MFI of INR 1.30 billion. The company has already crossed INR 12.8 million in earnings in the first 6 months of the current Financial Year and as of 30th September, 2010 had total assets of INR 999 Million.