ICRA reaffirms LA+ rating to Indusind Bank's Tier II Bond Issue

New Delhi, Oct 12 (UNI) Credit rating agency ICRA today retained LA+ rating for Rs 322 crore Tier II Bond Issue while reaffirming LA rating for Rs 150 crore Upper Tier II bond issue programme including the Green Shoe Option of IndusInd Bank Ltd.

The rated instrument carries average credit risk and meet the regulatory norms on capitalisation and reported profitability.

The adequate credit quality rating factors in the completion of the merger of Ashok Leyland Finance Limited (ALFL) which provides IndusInd a strong presence in the retail finance besides improving core fee income and asset quality indicators.

The rating also factors in its focus on retail, short-term corporate assets and select small and medium enterprises.

The rating is however constrained by the low profitability on account of a sharp rise in cost of funds for the bank with the rise in interest rates coupled with the lower securitisation income in the last fiscal.

The company had a net worth of Rs 866 crore as on March 31, 2006.

It has 147 branches spread over 117 locations in 24 states across the country.

Also, it has a tie up with the State Bank Group, MITR Consortium, corporation Bank and UTI Bank for the use of 13,000 ATMs.

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