Muthoot Finance gains on receiving positive credit ratings

Muthoot Finance Ltd has been assigned Long Term rating of ‘BB+’ with ‘Stable’ outlook by Fitch Ratings. S&P Global Ratings has assigned a Long Term rating of ‘BB’ with ‘Stable’ outlook. Moody’s Investor Service has assigned ‘Ba2’ Corporate Family Rating with ‘Stable’ outlook. The stock jumped nearly 2 per cent intraday in BSE.

These ratings will enable Muthoot Finance to access international debt market.

According to Fitch Ratings report, ‘The ratings take into account Muthoot Finance’s well-established franchise in the niche segment of gold-backed financing, its low credit losses and satisfactory leverage. ’

According to S&P Global Ratings report, ‘The ratings on Muthoot Finance are driven by the company's very strong capital and earnings, with the risk-adjusted capital ratio at above 45%. Muthoot Finance also has a strong market position in loans against gold although it is relatively small in the overall financial sector in India.’

 According to Moody’s Investor Service report, ‘Rating takes into account the company's (1) leading franchise and well established track record in lending against the gold jewelry segment in India, and (2) strong solvency metrics, including asset quality, capital and profitability’

The shares of Muthoot Finance on Friday opened at Rs. 677 as against Thursday’s close of Rs 667. At 14:41 hours it was trading at Rs. 664, flat at 0.45 per cent from its previous close. The stock hit an intraday high of Rs. 678 and intraday low was Rs. 655. Its 52-week high was Rs. 698.55 and 52-week low was Rs. 368.20 per share on the BSE.