DHFL Vysya's Rs 10-cr CP programme gets P1+ rating from Crisil

Mumbai, Mar 29 (UNI) Crisil has assigned a P1+ rating to DHFL Vysya's Rs 10-crore commercial paper (CP) programme.

A Crisil press release here today stated that it has also reaffirmed its FAA-/Stable rating to DHFL Vysya's fixed deposit programme.

''The rating continues to reflect the strong managerial, operational and financial support DHFL Vysya Housing Finance Limited receives from its parent, Dewan Housing Finance Limited,'' stated the Crisil release.

Following the takeover by Dewan Housing, DHFL Vysya's gross NPA levels have improved from seven per cent as at March 31, 2004, to 2.7 per cent a year later.

Stating that this was primarily due to a one-time transfer of delinquent assets to ING Vysya Bank coupled with recoveries and hardly any fresh slippages to NPAs after the takeover, the release said, ''Crisil expects the improving asset quality trend to continue.'' The rating also derives comfort from DHFL Vysya's adequate capitalisation levels which stood at 25.2 per cent (Tier 1) as at December 31, 2005.

However, Crisil pointed out that these strengths are somewhat offset by DHFL Vysya's status as a marginal player in the Indian housing finance industry.

In FY 05, the Company's total disbursements of Rs 47-crore were less than 0.1 per cent of the industry disbursements while its funding costs were also relatively higher. Besides, the Company's business was geographically concentrated in south India.

Commenting on the future outlook, the release stated that DHFL Vysya is expected to continue to benefit from the strong support provided by Dewan Housing and this support would enable it to strengthen its internal processes and remain adequately capitalised.

The release, however, cautioned that ''the Company will continue to remain a marginal player in the highly-competitive housing finance industry in the medium-term''.

UNI JJ MAZ SKB1914