Post-demonetisation of old high-value notes, rating firm Icra today put three microfinanciers - Cashpor Micro Credit, Sambandh Finserve Private and S V Creditline - on watch with negative implications.
Icra has placed its 'BBB-' rating to the Rs 25-crore bond raising programme of Cashpor on watch with negative implications.
"The risk of Cashpor's credit quality deteriorating in the near to medium term is relatively high, owing to its high leverage to net-worth of 12 times as on September 30, 2016. It's limitations on increasing core capital could impact its solvency indicators," the rating agency said in a note.
Cashpor's collection efficiency has been impacted post demonetisation (collection efficiency of nearly 95% during November 2016) as against 30 days past dues of 0.25 per cent as on September 30, 2016 owing to limited currency supply and disruption in borrowers' cash flows.
The uncertainty on the likely near-term collection efficiency has been increased owing to a possible worsening of credit culture, following rumours on loan waivers in certain states such as Uttar Pradesh, Madhya Pradesh and Maharashtra where Cashpor has a significant proportion of its portfolio, the rating outfit said.
Icra has put its 'BB-' rating to the Rs 45-crore term loans of Sambandh on watch with negative implications.
It also placed 'BBB-' rating to the Rs 97 crore non-convertible debentures programme, Rs 10-crore subordinated debt programme, Rs 70-crore bank lines and 'A3' rating to the Rs 12-crore preference share programme of S V Creditline on watch with negative implications.
The domestic rating firm cited the impact of November 8 cash recall exercise on both the companies' liquidity and asset quality indicators for its move.
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