Chemmanur Credits and Investments Limited is a non-deposit taking, non-banking financial company (base layer) registered with the RBI bearing registration no. N-16-00185 dated June 10, 2010 under Section 45-IA of the RBI Act 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 Micro finance 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 December 31, 2023, they operated through 236 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 1,236 persons in the business operations. The product portfolio Gold loans: The core business is disbursement of Gold Loans, which are typically small ticket loans secured by the pledge of gold jewellery. For the half-year ended September 30, 2023 and the financial years ended as on March 31, 2023, March 31, 2022 and March 31, 2021, they had approximately 69,226, 64,461, 65,068 and 68,946, respectively, Gold Loans accounts, aggregating to Rs 32,715.25 lakh, Rs 30,190.86 lakh, Rs 27,625.48 lakh and Rs 27,791.34 lakh which comprised 79.60 %, 74.00%, 77.80% and 81.41% of the total assets under management respectively. Micro finance Loans: The micro finance loans are typically small ticket loans, unsecured and given to Joint Liability Groups of woman customers. Accordingly, they provide loans to groups of women, with each group consisting of minimum five women based on the criteria. Under the JLG model, loans are provided to individual customers, however group guarantees the repayment of loans given to individual members of the group. They provide Micro finance Loans upto a maximum limit of Rs 60,000 for a maximum period of 24 months. The operations are focused on low income households engaged in economic activity and/ or women with limited access to formal financial institutions and the goal is to achieve gender equality in the society by providing the micro finance loan services to women. For the half-year ended September 30, 2023 and the financial years ended as on March 31, 2023, March 31, 2022 and March 31, 2021, they had approximately 56,911, 49,366, 23,686 and 33,849, respectively Micro finance Loan accounts, aggregating to Rs 5,127 lakh, Rs 5,821 lakh, Rs 3,064 lakh and Rs 2,639 lakh which comprised 12.48 %, 14.27 %, 8.63 % and 7.73 % of the total assets under management respectively. Business Loans: Apart from Gold Loans, they also provide financial assistance to individuals, who are engaged in small scale businesses, but are currently dependent on informal sources of funding which is known as “Gramin Shakthi Loan” or “GSL”. For the half-year ended September 30, 2023 and the financial years ended as on March 31, 2023, March 31, 2022 and March 31, 2021, they had approximately 14,970, 19,127, 16,539 and 16,572, respectively Business Loan accounts, aggregating to Rs 2,570 lakh, Rs 3,819 lakh, Rs 3,871 lakh and Rs 3,277 lakh which comprised 6.25 %, 9.36 %, 10.90 % and 9.60 % of the total loan and advances respectively. 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.
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