Hinduja Leyland Finance rating upgraded to AA by CARE

Chennai: Hinduja Leyland Finance (HLF), the non-banking financier and a subsidiary of CV maker Ashok Leyland, today announced its revision in credit ratings from CARE.
Care Ratings Ltd has upgraded the long-term rating of HLF to “CARE AA (Double A), Stable.”
A HLF release here said this rating applies to long-term bank loan facilities, non-convertible debentures, market-linked debentures, and subordinated debt.
The rating factors in the experienced management team of HLF improved capitalization levels and demonstrated the ability of
HLF to raise funds to support business growth, diversified product profile, geographically-diversified loan portfolio, and relatively diversified funding profile.
The rating upgrade also considers the significant increase in the scale of operation along with the improvement in asset quality and profitability parameters on a sustained basis.
HLF MD and CEO Sachin Pillai said “the current rating upgrade by
CARE to AA (Double A) signifies our ability to navigate the business through challenging times based on a deep understanding of the asset classes we have a presence in.”
The rating upgrade reaffirms the organization’s strength, leadership and financial and operational excellence, he said.
One of the company’s key strengths over the period has been its ability to manage liabilities, he said, adding, the rating upgrade will further strengthen and sharpen the company’s ability on this side.
Especially in the current environment, with the systemic increase in interest rates, Sachin said the rating upgrade could not have come in
at an appropriate time. “It will not only help us to contain the expected hike in interest cost, but also help us further diversify our liabilities in terms of access to new avenues of debt raise, which opens up the company now in the AA category.”
HLF is going through a reverse merger process, which will result in the company getting listed in the very near future.
The company also mobilized Rs.910 crores of fresh capital from Qualified Institutional Buyers (QIB) in October 2022, resulting in an improvement in Capital Adequacy Ratio (CAR).
Considering the equity infusion, the Tier-I CAR is expected to increase by around 5%. Going forward consequent to the merger, net worth is expected to improve further. The recent capital infusion supports AUM growth over the medium term in the existing business segments, he said. (UNI)