Piramal Capital and Housing Finance Receives Ba3 Rating from Moody's, Outlook Stable
Moody's assigns Ba3 rating to Piramal Capital and Housing Finance, citing its diversified portfolio mix and high capitalization, offset by relatively low profitability and legacy real estate exposures.
Piramal CapitalHousing FinanceMoodys RatingsCorporate FinanceReal EstateReal Estate NewsJun 28, 2024
The rating agency highlights Piramal Finance's high capitalization and increasingly diversified portfolio mix as key credit strengths. The company's loan book has diversified into retail and small-ticket corporate and real estate sectors, which now represent 79% of its consolidated assets under management. However, the legacy real estate exposures still pose a risk, representing about 21% of the AUM.
Moody's expects Piramal Finance's twin strategy of increasing retail and mid-market exposures while reducing the legacy lumpy real estate exposures to improve the granularization of the loan book and reduce the risk of volatility in its asset quality. The company's core profitability, excluding legacy real estate exposures, is moderate due to investments related to branch network expansion and human resources.
Piramal Finance relies fully on wholesale sources for its funding needs, with access to the domestic bond and bank loan market. While its on-balance sheet liquidity is modest, the company matches the maturities of its assets and liabilities, which helps manage liquidity.
To move up the ratings, Piramal Finance needs to meaningfully reduce its legacy real estate exposures and maintain stable asset quality of retail loans, while improving overall profitability with a return on average assets above 2.5%. Conversely, a deterioration in asset quality or capitalization, or worsened access to funding, could lead to a rating downgrade.
Information
Piramal Enterprises Limited (PEL) is a global business conglomerate with diversified interests in pharmaceuticals, financial services, and information management. Piramal Capital and Housing Finance Limited is a subsidiary of PEL, providing a range of financial services including housing finance, real estate finance, and corporate finance.
Moody's Ratings is a leading global credit rating agency, providing ratings and research on debt securities and issuers. Moody's ratings are widely followed by investors, financial institutions, and corporations, providing a benchmark for creditworthiness and risk assessment.
Frequently Asked Questions
What is the current rating assigned to Piramal Capital and Housing Finance by Moody's?
Ba3 with a stable outlook
What is the key credit strength of Piramal Finance, according to Moody's?
High capitalization and increasingly diversified portfolio mix
What is the percentage of legacy real estate exposures in Piramal Finance's AUM?
About 21%
What is the requirement for Piramal Finance to move up the ratings, according to Moody's?
Meaningfully reduce legacy real estate exposures, maintain stable asset quality of retail loans, and improve overall profitability
What could lead to a rating downgrade for Piramal Finance, according to Moody's?
Deterioration in asset quality or capitalization, worsened access to funding, or regulatory capital below 17%
Related News Articles
Indian Real Estate Sector to Witness Unprecedented Growth with Rs 3 Trillion Capital Commitment
The Indian real estate sector is poised for a massive growth spree with an estimated capital commitment of Rs 3 trillion over the next two years. Developers are betting big on the boom in residential property and sustained leasing activity in commercial p
Landmark Ruling: Church Wins Battle to Preserve Public Park Land in Mumbai
A Mumbai court has ruled in favour of a church, protecting a 1,309 sqm plot of land earmarked for a public park, emphasizing the importance of fair compensation and landowner consent.
Godrej Properties Aims to Launch Rs 21,000 Crore Worth of Housing Projects by March 2025
Godrej Properties plans to launch housing projects worth Rs 21,000 crore by March 2025, focusing on Mumbai Metropolitan Region, Delhi-NCR, Bengaluru, Pune, and Hyderabad.
Noida Property Prices Set to Rise as Circle Rate Increase Looms
Proposed 25% increase in circle rate aims to boost government revenue, stabilize property market, and bring transparency to administrative system.
Lavasa Corp Receives Initial Bids for Resolution Plan: A Detailed Overview
Lavasa Corp, the ambitious hill-city project in Maharashtra, has finally started receiving initial bids for its resolution plan. This move comes as a significant development in the long-drawn legal battle and financial distress surrounding the project. Th
ASK Property Fund and India Sotheby's Launch Rs 1,000 Crore Fund for Luxury Housing
New Delhi, Jan 7 (PTI) ASK Property Fund and India Sotheby's International Realty have announced the launch of a Rs 1,000 crore equity fund to invest in luxury residential projects.