Crisil assigns AAA/stable rating to Rs 500 crore NCD of L&T Finance Holding

Mumbai (Maharashtra) [India], Oct 5 (ANI): Crisil has assigned its AAA/stable rating to the Rs 500 crore non-convertible debentures of L&T Finance Holdings Ltd (LTFH) due to its strong presence across the financial services space and a well-diversified resource profile.
L&T Financial Services (LTFS) Group includes LTFH and its subsidiaries and associates. Crisil has also reaffirmed its rating on commercial paper programme at Crisil A1 plus.
The group is a large and frequent issuer in capital markets and has strong banking relationships. Of the total borrowing of Rs 92,887 crore as on June 30, non-convertible debentures (NCDs), commercial paper, external commercial borrowings (ECB) and bank borrowings formed 44 per cent, 13 per cent, 2 per cent and 38 per cent respectively.
The group recently raised retail NCDs of Rs 2,500 crore and ECB of about Rs 1,900 crore.
Crisil said the LTFS group has demonstrated healthy growth and improved its return on equity over the last few years. Due to L&T's focus on building a strong services portfolio including IT, technology and financial services, the LTFS group has been identified as a key focus area for the parent company.
Furthermore, the parent provides capital support to the LTFS group and has infused around Rs 3,779 crore to date (including Rs 2,000 crore in fiscal 2018). It has also provided an ongoing line of credit of Rs 2,000 crore to the LTFS group, which could be used in times of contingency. L&T is the majority shareholder of LTFH with a shareholding of 63.89 per cent as on June 30.
Capital support from the parent, along with internal cash accrual, is expected to keep capitalisation of the LTFS group adequate with gearing (debt/net worth) expected at around 7 times -- not exceeding 7.5 times -- on a steady-state basis, said Crisil.
(ANI)