Chemmanur Credits and Investments Limited

Chemmanur Credits and Investments Limited are, a non-deposit taking, non-banking financial company (base layer) registered with the RBI primarily engaged in the gold loan sector lending money against the pledge of household gold jewellery ('Gold Loans') in the state of Kerala, Tamil Nadu, Karnataka Andhra Pradesh and Maharashtra. They also provide Microfinance Loans, business and personal loans, money transfer services and distribution of third party insurance products. They have been engaged in the lending business for more than 13 years and are based in Kerala, India. As of June 30, 2024, they operated through 270 branches located across 5 states namely Kerala, Tamil Nadu, Karnataka, Maharashtra and Andhra Pradesh managed through the registered office located at Thrissur, Kerala and they employ 1404 persons in the business operations. For the three months ended June 30, 2024, and financial year ended on March 31, 2024, March 31, 2023 and March 31, 2022, the Company held 1.02 tonnes, 1.04 tonnes, 0.86 tonnes and 0.87 tonnes of gold jewellery respectively, as security for all Gold Loans. Under the microfinance loan segment ('Microfinance Loans'), they provide unsecured loans to group of women customers (minimum of 5 persons) for their business and personal needs. Under the Joint Liability Group ('JLG') model, loans are provided to individual customers, however group guarantees the repayment of loans given to individual members of the group. Through this model, the customers, who typically do not have collateral to take up loans, are able to gain access to credit. They also offer business loans – named as Gramin Shakthi Loan ('Business Loans') to the customers for their business needs. These are secured business loans where target customers are engaged in small scale business, however, currently dependent on informal sources of funding. This loan type shall enable customers to increase the scale of their business. Gramin Shakthi Loans help the individuals to mitigate the difficulty in meeting business funding requirements or to raise working capital funds. This NCD is given IND BBB-/Stable by India Ratings and Research Private Limited and the instruments with this rating are considered to have moderate degree of safety regarding timely servicing of financial obligations and carry moderate credit risk. Financials of company are average. So, rating is average, coupon rates are high and net profit is in declining. So, we give AVOID rating to debt issue.

• 1 Chemmanur Devassykutty Boby