ICRA assigns LAA rating to Gruh's Rs 200cr prog

New Delhi, Oct 3 (UNI) Credit rating agency ICRA today assigned highest-credit-quality rating 'LAA' to the non-convertible debenture programme of Gruh Finance Ltd worth Rs 200 crore, reaffirming the ratings assigned earlier.

Gruh's ratings are based on its strong parentage, ability to grow its loan book while maintaining superior earnings, good asset quality, adequate liquidity and comfortable capital adequacy.

Gruh's well-established systems and track record in maintaining low delinquencies provide comfort to the rating.

However, ICRA views the increase in proportion of loans extended to self employed professionals with a cautious optimism as associated risks in the segment are higher and the underwriting skills of the company are yet to be tested.

Going forward, ICRA would monitor the asset quality in the segment more closely. As for capital, the rating agency expects the proposed rights issue and internal capital generation to provide ample capital to support growth of the company.

Gruh is an established housing finance company with a loan portfolio of Rs 1,069 crore as on March 31, 2006. HDFC is the largest shareholder in Gruh with a stake of 61.85 per cent as on March 31, 2006.

UNI KR PV DS1645