India Ratings has upgraded rating of AU SMALL FINANCE BANK LIMITED(AUSFB) to AA-/Stable from A+/Positive.
The upgrade reflects AUSFB's reasonable transition to the small finance bank (SFB) platform,with reasonable traction on retail liability and simultaneous strengthening of product portfolios while containing delinquencies at a comfortable level. The ratings benefit from AUSFB's policy to maintain leverage at a moderate level (around 7.0xfor the medium term) commensurate with its asset side risks, as well as from an improved access to equity-raising after the listing in July2017. AUSFB intends to maintain healthy liquidity with matched asset and liability tenors. Ind-Ra derives comfort from AUSFB's execution capabilities that have been displayed from time to time (e.g. transition to the SFB platform, asset side transitioning and liability accretion), in addition to the quality of the management team.
The ratings, however, are constrained by AUSFB's regional concentration, unseasoned loan book (last 12 months disbursals / assets under management (AUM) of 66%as of December 2017) and insufficient track record in asset-liability management on the SFB platform.
Shares of AU Small Finance Bank Ltd was last trading in BSE at Rs.575 as compared to the previous close of Rs. 574.9. The total number of shares traded during the day was 5640 in over 233 trades.
The stock hit an intraday high of Rs. 583.35 and intraday low of 570.15. The net turnover during the day was Rs. 3264813.