Muthoottu Mini Financiers Ltd. (MMFL) a Muthoottu Mini group company is a non-deposit taking systemically important NBFC 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, Telangana, Haryana, Maharashtra, Delhi and Goa and the union territory of Puducherry. It has also recently forayed into micro-finance loan segment in the financial year 2017 wherein the company provides unsecured loans to joint liability group of women customers (minimum of 5 persons) who require funds to carry out their business activities through few of its branches in the state of Kerala. Since FY14 this is the 7th debt offer from this company. MMFL's Gold Loan portfolio as on September 30, 2019, March 31, 2019,March 31, 2018 and March 31, 2017, comprises of 4,20,949, 3,75,665, 4,11,558 and 5,16,004 Gold Loan accounts respectively, aggregating to Rs 1,62,169.07 lakhs, Rs 1,35,012.97 lakhs, Rs 1,55,432.83 lakhs and Rs 1,94,000.29 lakhs which is 97.31%, 97.50%, 95.31% and 99.01% of the total loans and advances as on such specific dates. Company, as on March 31, 2020, had a network of 784 branches spread in the states of Kerala, Tamil Nadu, Karnataka, Andhra Pradesh, Telangana, Haryana, Maharashtra, Delhi and Goa and the union territory of Puducherry and they employ 3,168 persons in the business operations. For the FY20, FY19, FY18 and FY17, the total revenue was Rs 31,315 lakhs, Rs 29,815.48 lakhs, Rs 33,493.39 lakhs and Rs 43,546.42 lakhs, respectively. The profit/(loss) after tax, for FY20, the Fiscals 2019, 2018 and 2017, the total income was Rs 3,354 lakhs, Rs 2,095.60 lakhs, Rs 1,424.59 lakhs and Rs (8,108.51) lakhs, respectively. For the FY20, Fiscals 2019, 2018 and 2017, our income from the Gold Loan business constituted 94.60%, 93.37%, 94.85% and 98.01%, respectively, of the total income. For the FY20, Fiscals 2019, 2018, revenues from the micro-finance loan business constituted 2.68%, 2.32%, 4.44% respectively, of the total income. Gross non-performing loan assets were 1.89%, 2.16%, 2.09% and 2.38% of the gross loan portfolio under management as of the FY20, FY19, FY18 and FY17. This issue is rated IND BBB/Stable (by IND Ratings Limited). It indicates that instruments with this rating are considered to have the moderate degree of safety regarding timely servicing of financial obligations. Such instruments carry the moderate credit risk. Considering poor rating, average financial performance, so we give NEUTRAL rating to debt issue.
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