Oct 19th 2021
Svatantra Microfinance Pvt Limited Credit Analysis
Svatantra Microfin Private Limited (SMPL) has been rated as A with stable outlook wand A+ with stable outlook by CRISIL.
Subhasis Mishra
Svatantra Microfin Private Limited (SMPL) is a Non-deposit taking Systemically Important Non Banking Finance Company-Microfinance Institution. It was formed in 2012 and commenced operations from March 01, 2013. The company is promoted by Aditya Birla family and other investment companies of Aditya Birla Group. SMPL operates through 673 branches across 292 districts in 18 states. As of 31st March 2021, its AUM stood at Rs.35.64 billion.
Credit Rating- SMPL has been rated as A with stable outlook wand A+ with stable outlook by CRISIL.
Company Financials
Parameters (Rs billion) | FY20 | FY21 |
Total Income | 3.92 | 5.60 |
PAT | 0.29 | 0.27 |
Total Assets | 26.01 | 37.17 |
Net NPA (%) | 0.68 | 1.02 |
CRAR (%) | 20.55 | 21.88 |
Leverage | 6.80 | 5.66 |
SMPL traded bond levels
Date | ISIN | Coupon(%) | Yield(%) | Maturity |
14-Oct-21 | INE00MX07112 | 10.95 | 10.12 | 29-Sep-24 |
13-Oct-21 | INE00MX07112 | 10.95 | 10.24 | 29-Sep-24 |
12-Oct-21 | INE00MX07112 | 10.95 | 10.41 | 29-Sep-24 |
12-Oct-21 | INE00MX08011 | 11.70 | 10.02 | 30-Nov-23 |
11-Oct-21 | INE00MX07112 | 10.95 | 10.43 | 29-Sep-24 |
08-Oct-21 | INE00MX08011 | 11.70 | 9.99 | 30-Nov-23 |
05-Oct-21 | INE00MX08011 | 11.70 | 10.20 | 30-Nov-23 |
01-Oct-21 | INE00MX08011 | 11.70 | 10.03 | 30-Nov-23 |
01-Oct-21 | INE00MX08045 | 12.90 | 10.50 | 30-Sep-26 |
Strong parentage support- Having strong linkage to Aditya Birla group, SMPL receives significant support in terms of capital infusion, operational and management. This helps the company to remain well capitalized.
Capitalization- As of 31st March 2021, SMPL’s tangible net-worth stood at Rs 2.52 billion. Owing to capital infusion from its promoter, its capital adequacy ratio rose to 21.88% as of 31st March 2021 from 20.55% as of 30th March 2020. Consequently, its gearing came down to 5.66 times from 6.8 times during the mentioned period.
Subdued profitability- Owing to high operating cost and covid pandemic, company’s profitability remains moderate. This can be seen from the data that total income rose by 43% in FY21 from previous fiscal year and net income declined by 7%. Going ahead, it is expected that micro finance sector will be under stress due to corona pandemic which will put pressure on the profitability of the company.
Deterioration in asset quality- As of 31st March 2021, net NPA of SMPL rose to 1.02% from 0.86% as of 31st March 2020.
Liquidity- SMPL has liquidity of around Rs.4.73 billion as on June 30, 2021, in the form of cash and liquid investments, which was sufficient to meet all the debt obligations including interest for next 1-2 months. Further, SMPL also had Rs.6 billion of unutilized bank lines as on June 30, 2021. (source-CARE)
