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India Ratings and Research stated that the affirmation reflects its expectation that SBFC would continue to grow its franchise over the medium term, driving operating leverage benefits, maintaining its focus on its two key secured products and maintaining profitability and capital buffers. The ratings continue to be supported by the company's experienced management profile, demonstrating better governance and institutionalised approach, its pan-India presence, with less concentrated geographical presence, and stable asset quality performance. The company's ability to maintain stable asset quality with seasoning of the portfolio and its ability to diversify funding across various instruments with scaling of the franchise, remain rating monitorables. The credit rating agency further said that an expansion of the franchise comparable to similar rated peers' along with a continuous demonstration of ability to manage asset quality through the cycle and profitability buffers will be positive for the ratings. Strong access to funding from diversified sources while maintaining superior liquidity, all on a sustained basis, could also lead to a positive rating action. However, events that could lead to a negative rating action include any substantial decline in the operating profit buffers, weakened liquidity profile, increased leverage and perceptible changes in business owing to managerial instability or deterioration in business environment in a meaningful way. SBFC is a non-deposit taking systemically important non-banking financial company registered with the Reserve Bank of India and is classified under mid-layer. It started operations in September 2017 after purchasing the secured retail portfolio from Karvy Financial Services, along with its branch infrastructure and staff. The company mainly provides secured MSME loans, LAP, and LAG. At end-March 2025, the entity had 205 branches spread across 16 states and two union territories. The scrip shed 0.35% to currently trade at Rs 100.40 on the BSE. Powered by Capital Market - Live News |