Rating Rationale Capital First Limited July 1 Brickwork Ratings assigns rating for the proposed unsecured subordinated of Rs. Crores and reaffirms the existing ratings for the bank facilities and various existing debt issues of Capital First Limited ( CFL or the Company ). It also withdraws the rating of Rs. 1 Cr of secured due to full redemption of the. Brickwork Ratings () assigns the rating for the proposed facility of Capital First Limited ( CFL or the Company ) as detailed below: Issue Limit (Rs. In Cr) Tenure Rating 1 Proposed unsecured subordinated Long Term Total INR Five Hundred crores only It has also reaffirmed the Ratings 1 for the Bank Facility and various existing Debt issues as detailed below: Existing Issues # Issue Size (` Cr) Outstanding (` Cr) Unutilized Amount (` Cr) as of June 1, 1 Ratings History (March 1) Ratings Reaffirmed Fund Based: Bank Facilities (Proposed Term Loans) Nil Secured 1. 1. Secured 1* - - IPDI ( ) ( ) ( ) ( ) ( ) Total INR Five thousand and seven hundred crores only ( ) ( ) Withdrawal of ( ) ( ) ( ) 1 Please refer to website www.brickworkratings.com/ for definition of the ratings * The amount of secured of Rs. 1 Cr has been withdrawn out of the earlier rated Rs. 1 Cr, due to full redemption of Rs. 1 Cr of issue (ISININEI1), therefore, the rating for Rs. 1 Cr of is withdrawn. 1 June, 1
Rationale/Description of Key Rating Drivers/Rating sensitivities: has principally relied upon the audited financial results for FY1, projected key financial figures and publicly available information and information/clarification provided by the company's management. The rating has factored, inter alia, experienced & professional management in the Company with reputed FIIs among the key shareholders providing financial strength & flexibility, the growing business profile of the Company, highly diversified loan book, seasoned and proven loan portfolio with moderate asset quality, conservative Asset Liability Management and liquidity cushion, robust and consistent financial and operating performance. The rating is, however, constrained by slight increase in NPA percentages due to moving to dpd based NPA recognition, and reduced capital adequacy due to increase in loan book. Rating believes CFL s business risk profile will be maintained over the medium term. The outlook indicates a low likelihood of rating change over the medium term. has taken note of the public announcement regarding merger of CFL with IDFC Bank Ltd. About the Company Capital First Limited (CFL) is an RBI registered systemically important non- deposit taking NBFC. It was founded in 1 as a result of a Management buyout of an existing NBFC by Mr. V Vaidyanathan who is the Chairman and Managing Director of Capital First Limited with around % stake in CFL on fully diluted basis. It is a listed company on NSE and BSE. Further, CFL is proposed to be merged with IDFC Bank, and public announcements to this effect were made in January 1; has already taken cognizance of this, and a reference may please be made to our published rating rationale dated th Jan 1. Proposed issue details The proposed issue size of the unsecured subordinated is Rs. Cr. The company will be issuing unsecured, Listed/Unlisted debentures of different tenors in multiple tranches. The funds will be utilized for onward lending and enhancing the capital adequacy of the NBFC. Company s Financial Performance During FY1, the company had an outstanding loan portfolio of Rs. 1 Crores, registering a growth of ~%. CFL provides financial services to retail borrowers, which includes Individual Consumers, and Micro and Small Enterprises which contributes around ~% of the AUM as of March 1, 1. Total operating Income and Net Interest Income for the Company stood at Rs.. Crores and 1. Crores, respectively. The Net Interest Margin has improved to.% (FY1:.%) and the PAT was Rs.. Cr (FY1: Rs. 1. Cr). The Gross NPA of the Company stood at 1.% (on + dpd basis), Net NPA at 1.% and the increase is mainly due to the change in the dpd recognition; provision coverage ratio was at % in FY1. CFL s Net Worth has marginally increased from Rs..1 Crores in FY1 to Rs. Crores in FY1, on account of retention of profits. Their capital adequacy in the form of CRAR reduced to 1.% as of March 1, 1 (regulatory requirement: 1%) due to increase in the balance sheet size. The Company has a conservative Asset Liability approach and comfortable liquidity position both in the short and the long term. June, 1
Key Financial Figures: Financial Ratios FY1 (A) FY1 (A) FY1 (A) Assets Under Management (AUM) 1, 1 1 Loan Portfolio Outstanding (Rs. Cr) 1,1 1 1 Gross NPA % 1.%.% 1.% Net NPA %.%.% 1.% Net Interest Income (Rs. Cr). 1. 1. PAT (Rs. Cr) 1.1 1.. Net Interest Margin (NIM).%.%.% Net Worth (Rs. Cr) 1..1 CRAR 1.1%.% 1.% Rating History for the last three years: Instrument/ Facility Proposed unsecured subordinated Proposed unsecured subordinated Proposed Bank Loan Long Term Long Term Long Term Current Rating (Year 1) 1 1 Secured Secured 1 Secured IPDI 1 AA+ June 1 1-Mar-1 Rating History 1 1 1 1-Mar-1 -Jan-1 AA AA AA June, 1
Secured IPDI 1 1 Secured 1 IPDI 1 IPDI Secured Secured 1 Bank Loan Proposed Secured AA+ AA+ AA+ AA AA AA AA AA AA Total INR Six thousand & six hundred crores June, 1
Hyperlink/Reference to applicable Criteria General Criteria Banks & Financial Institutions Analytical Contacts MSR Manjunatha Head Ratings Administration analyst@brickworkratings.com Media media@brickworkratings.com Relationship Contact bd@brickworkratings.com Phone: 1--- For print and digital media The Rating Rationale is sent to you for the sole purpose of dissemination through your print, digital or electronic media. While it may be used by you acknowledging credit to, please do not change the wordings in the rationale to avoid conveying a meaning different from what was intended by. alone has the sole right of sharing (both direct and indirect) its rationales for consideration or otherwise through any print or electronic or digital media. Note on complexity levels of the rated instrument: complexity levels are meant for educating investors. The complexity levels are available at www.brickworkratings.com/download/complexitylevels.pdf Investors queries can be sent to info@brickworkratings.com. About Brickwork Ratings Brickwork Ratings (), a SEBI registered Credit Rating Agency, accredited by RBI and empaneled by NSIC, offers Bank Loan,, Commercial Paper, MSME ratings and grading services. BARD has empaneled Brickwork for MFI and NGO grading. is accredited by IREDA & the Ministry of New and Renewable Energy (MNRE), Government of India. Brickwork Ratings has Canara Bank, a leading public sector bank, as its promoter and strategic partner. has its corporate office in Bengaluru and a country-wide presence with its offices in Ahmedabad, Chandigarh, Chennai, Hyderabad, Kolkata, Mumbai and New Delhi along with representatives in 1+ locations. has rated debt instruments/bonds/bank loans, securitized paper of over 11,, Cr. In addition, has rated over 1 MSMEs. Also, Fixed Deposits and Commercial Papers etc. worth over, Cr have been rated. DISCLAIMER Brickwork Ratings () has assigned the rating based on the information obtained from the issuer and other reliable sources, which are deemed to be accurate. has taken considerable steps to avoid any data distortion; however, it does not examine the precision or completeness of the information obtained. And hence, the information in this report is presented as is without any express or implied warranty of any kind. does not make any representation in respect to the truth or accuracy of any such information. The rating assigned by should be treated as an opinion rather than a recommendation to buy, sell or hold the rated instrument and shall not be liable for any losses incurred by users from any use of this report or its contents. has the right to change, suspend or withdraw the ratings at any time for any reasons. June, 1
Annexure: ISIN details Details of the issues Company Name ISIN Coupon Rate INEI1 INEI INEI1 INEI Type of Instrument.% Secured.% Secured.% Secured.% Secured Amount O/S as on June, 1 1,,,1,,,, INEI INEI INEI 1.% Secured.1% Secured.1% Secured,, 1,,,,, INEI.% Secured,, INEI.1% Secured,, INEI.% Secured,, INEI.1% Secured 1,, INEI1 1 INEI.1% Secured.% Secured,, 1,1,, INEI.1% Secured,, June, 1
INEI.% Secured,, INEI INEI.% Secured.% Secured,,,, INEI.% Secured 1,, INEI INEI INEI INEI INEI INEI.% Secured.1% Secured.% Secured.% Secured.% Secured.% Secured 1,,,, 1,,,,, 1,,, INEI.% Secured,, INEI INEI INEI INEI1 INEI INEI.% Secured.% Secured.% Secured.% Secured.% Secured.% Secured 1, 1,,, INEI.% Secured June, 1
INEI.% Secured,,, INEI INEI INEI.% Secured.% Secured.% Secured 1,,,,1,, 1,,, INEI.% Secured 1,,, INEI INEI INEI 1 INEI INEI1 INEI1 INEI1 INEI1 INEI INEI INEI INEI 11.% Perpetual 11.% Perpetual 1.% Perpetual 1.% Perpetual 1.% Perpetual.% Perpetual.% Perpetual 1.% Debentures 1.% Debentures.% Debentures.% Debentures.% Debentures 1,,,,, 1,,,,,,,, 1,,,,, INEI1.% Debentures,, INEI11 1.% Debentures,, June, 1
INEI1.% Debentures,, INEI1 INEI1.% Debentures.% Debentures 1,,,,, INEI1.% Debentures,,, INEI1.1% Debentures,, INEI.1% Debentures,,,1,, June, 1