CreditAccess Grameen August 2023 NCD Public Issue Review

5 min read • Updated 1 September 2023
Written by Darshan Maheshwari

CreditAccess Grameen Limited has launched its public issue of NCDs to mobilise funds from the debt market. Read further to know more about the business of CreditAccess Grameen Limited.

IssuerCreditAccess Grameen Limited
Type of InstrumentListed, Secured, Redeemable, Non-Convertible Debentures
Issue Size (Tranche II)Rs. 400 crs + Rs. 600 crs (Green shoe option)
Face ValueRs. 1,000
Tenure24 months to 60 months across Series I-VIII
Yield9.48% to 10.13% across Series I-VIII
Application sizeMinimum 10 NCDs and in multiples of 1 NCD thereafter
Security CoverMinimum 100% security cover of the principal outstanding plus interest thereon
Credit RatingCRISIL A+/Stable and ICRA AA-/Stable
Issue Open Date24-August-23
Issue Close Date06-September-23

Specified terms of the NCD’s are as follows:

image

About the CreditAccess Grameen Limited

Previously known as Grameen Koota Financial Service Limited, CreditAccess Grameen Limited (“CAGL”) was incorporated in 1991. CAGL is registered as a NBFC-MFI and CAI the parent company is registered in Amsterdam, Netherlands. The company is primarily engaged in lending in rural areas to women for income generation. CreditAccess offers a range of products and services, spanning varied asset classes and diversified consumer segments. The businesses of CreditAccess are organized around five broad lines –Microfinance, loan against property including affordable home loan, vehicle loan, gold loan, and Life insurance. It is also an aggregator for the National Pension Scheme.

About the Group

CAI is a professionally managed company invested in by 220+ shareholders. Among them: Olympus Capital Asia (US PE firm, focusing on mid-cap Asian companies) holding 15% and Asian Development Bank holding 9% are the largest shareholders. The initial shareholders are a large group of family offices and HNIs still represent around 50% of the share capital.

CAGL is a listed company on the Indian Stock Exchange. CAGL is promoted by CAI which currently holds 66.77% as of June 2023.

Over the years, CAGL has established its presence in the micro finance industry and has emerged as the leading MFI lender in terms of portfolio size and market share. CAGL currently serves 4.4+ million clients with 17,000+ employees operating through 1,800+ branches in India. The total income of the company amounted to ₹ 3,545.12 crs for the year ended March 31, 2023, and ₹ 2,742.82 crs for the year ended March 31, 2022, on a consolidated basis. The company earned profit of ₹ 826.06 crs for the year ended March 31, 2023, and ₹ 353.07 crs for the year ended March 31, 2022, on a consolidated basis.

History of CreditAccess Grameen Ltd

CreditAccess Grameen Limited was originally incorporated as a Private Limited Company under the name Sanni Collection Private Limited (SCPL) on June 12, 1991, at Calcutta, West Bengal. In February 2007, the entire shareholding of SCPL was acquired by Vinatha M. Reddy, Vijitha Subbaiah and Suresh K. Krishna, in their respective individual capacity. Subsequently, in October 2007, the microfinance business being operated under T. Muniswamappa Trust (TMT), a public charitable trust engaged in the business of providing micro loans in Karnataka was transferred to SCPL. The microfinance business being operated under TMT was established as a program under the name Grameen Koota in 1999.

The Company was granted NBFC-Microfinance Institution (NBFC-MFI) status by the RBI with effect from September 5, 2013. Subsequently, the name of the Company was changed to Grameen Koota Financial Services Private Limited on November 13, 2014. In 2014, CreditAccess Asia N.V. acquired a majority stake in the company.

The Company was converted into a Public Limited Company on November 27, 2017, and the name of the Company was changed to Grameen Koota Financial Services Limited on December 18, 2017. Pursuant to Resolution passed by Shareholders, name of the Company was changed to CreditAccess Grameen Limited on January 12, 2018.

CreditAccess Grameen came out with an initial public offer (IPO) during the period from 8 August 2018 to 10 August 2018. The IPO was a combination of fresh issue of Rs 630 crore and an offer for sale of 1.18 crore equity shares from promoter CreditAccess Asia N.V. The IPO was priced at Rs 422 per share. The stock made its debut on the stock exchange on 23 August 2018. 

The Company acquired 75.64% of the shareholding of Madura Micro Finance Limited (MMFL) on March 18, 2020, and additionally acquired 0.44% of the share capital of MMFL on March 31, 2020. The order from NCLT approving the merger of MMFL and CAGL came in February 2023.

Financial Performance (at consolidated level)

ParticularsFY23FY22FY21**FY20
Net Worth5,0484,0183,7962,843
Borrowings16,31212,92110,9419,540
PAT826353131336
PAT margin*23.30%13.02%8.86%30.72%
Debt to Equity3.233.222.903.30

* PAT margin = PAT / Revenue from operation.

**The company reported lower profitability in FY21 due to COVID-19. Since then, the company has been steadily improving its profitability.

CRAR of NBFCs in the group

Name of the NBFCMinimum Regulatory CRARCRAR as of March 31, 2021CRAR as of March 31, 2022CRAR as of March 31, 2023
CreditAccess Grameen Limited15%31.80%26.50%23.60%*
Madura Microfinance15%20.90%20.00%

* By the end of FY 2023, MMFL merged with CAGL

Borrowings

Top 10 NCD holders as on June 30, 2023:

image 1

Nature of Borrowings

Nature of BorrowingsQ1 FY24FY23FY22FY21FY20
Secured16,533.7816,009.6712,710.1710,642.899,355.67
Unsecured202.53302.59210.52298.44184.00
Total16,736.3116,312.26   12,920.69   10,941.33   9,539.67

Type of Borrowings

Type of borrowingQ1 FY24FY23FY22FY21FY20
Bank Borrowings10,096.8210,740.338,697.446,256.246,037.69
Debt Securities1,433.811,672.351,418.101,674.95792.67
Subordinated Debt54.3977.9177.74102.70103.03
Other Borrowings5,151.293,821.672,727.412,907.442,606.28
Total16,736.3116,312.26   12,920.69   10,941.33   9,539.67

Peer Comparison* (FY 2023)

ParticularsCreditAccessFusion[VK3] Satin CreditcareSpandana
Revenue from operation3,4691,7421,5571,401
PAT826387512
Net Worth5,1072,3221,5543,099
AUM21,0319,2969,1168,511
ROE18.00%21.16%0.29%0.40%
ROA4.20%4.65%0.06%0.15%

*Consolidated

Rating AgencyCreditAccessSatin CreditcareFusionSpandana
CRISILA+/PositiveNot RatedA/StableA/Stable
ICRAAA-/StableA-/StableA/StableA-/Positive
CARENot RatedBBB+/StableA/StableNot Rated
India RatingsAA-/StableNot RatedNot RatedA/Stable

Credit Rating History

YearRating Agency202120222023
RatingCRISILA+/StableA+/PositiveA+/Positive
ICRAA+/StableA+/PositiveAA-/Stable

Conclusion

Comforts:

  • Largest NBFC-MFI with an established track record.
  • Consistently and steadily growing profitability post COVID.
  • Healthy capitalization and comfortable gearing levels.
  • Experienced management.
  • Comfortable asset quality with GNPAs at 1.21% and NNPA at 0.42% as of March 2023

Concerns:

  • High regional concentration in operations.
  • Inherently modest credit profile of the borrower.
  • Susceptibility of asset quality to local socio-political issues remain high.

Was this helpful?

Darshan Maheshwari

Credit Associate
Darshan is an up-and-coming Investment analyst making headway in the field of capital markets. He has completed his Chartered Accountancy and CFA Level 1 exam. He is currently working as a Credit Associate at Wint Wealth.

Popular Articles

Sovereign Gold Bond 2023-24: Series 4; Check Price, Issue Dates, and More.
Sovereign Gold Bond 2023-24: Series 4; Check Price, Issue Dates, and More.
  • 12 min read
  • 15 June 2023
What Are Gold BeES and How Do They Work?
What Are Gold BeES and How Do They Work?
  • 6 min read
  • 12 January 2023
Difference between Visa Classic, Platinum, Signature and Infinite Cards
Difference between Visa Classic, Platinum, Signature and Infinite Cards
  • 6 min read
  • 29 March 2023
How to File a Complaint with the Banking Ombudsman: A Step-by-Step Guide
How to File a Complaint with the Banking Ombudsman: A Step-by-Step Guide
  • 12 min read
  • 28 February 2023
How to Check Mutual Fund Status with Folio Number
How to Check Your Mutual Fund Status with a Folio Number?
  • 6 min read
  • 6 December 2022

Recent Articles

Complete Guide on Online Bond Platform Providers (OBPP)
Complete Guide on Online Bond Platform Providers (OBPP)
  • 4 min read
  • 12 February 2024
NPS Withdrawal Online: Rules, Process, Taxation & Exceptions
NPS Withdrawal Online: Rules, Process, Taxation & Exceptions
  • 9 min read
  • 31 January 2024
Understand Exempt-Exempt-Exempt (EEE) In Income Tax In India
Understand Exempt-Exempt-Exempt (EEE) In Income Tax In India
  • 4 min read
  • 31 January 2024
Electoral Bonds: Meaning, Price, and Eligibility
Electoral Bonds: Meaning, Price, and Eligibility
  • 8 min read
  • 29 January 2024
Interim Budget: How Is It Different From a Union Budget
Interim Budget: How Is It Different From a Union Budget
  • 4 min read
  • 29 January 2024