The JCR-VIS Credit Company has maintained the medium- to long-term entity ratings of International Housing Finance Ltd (IHFL) at 'BBB+' (triple B plus), and the short term rating at 'A3' (A three). Outlook on the medium to long-term rating has been revised to 'positive' from 'stable'.
The revision in outlook acknowledges further enhancement in equity planned through listing on the stock exchanges by September 2004, which is expected to double the paid-up capital of the company.
The company's operations have picked up momentum after declining for the last two years. Debt leverage of the IHFL has remained low, reducing further with the capital injection by the sponsors in FY2004.
The ratings incorporate the improvement in the asset quality that has been achieved during the past few months through recovery and strict underwriting in a steadily growing loan portfolio. However, substantial concentration exists in the loan portfolio. While its profit levels have been increasing with the scale of operations, efficiency and overheads of the company are still high, due to a relatively low asset base. These are likely to improve as the portfolio size increases.