Brickwork Ratings reaffirms 'BWR BB' (Outlook: Stable) for LRN Finance's NCD Issue

Brickwork Ratings (BWR) has reaffirmed BWR BB (Pronounced BWR Double B) Rating with Stable outlook for LRN Finance Ltd.'s (LFL) proposed secured Non-Convertible Debenture (NCD) Issue of 25 Crores. The outstanding amount of the said issue is Rs.16 Crores. Instruments with BWR BB Rating are considered to have moderate risk of default regarding timely servicing of financial obligations.

The rating factors, inter alia, benefits arising from PINCON Group's support, its brand and position in Eastern India and improving net worth of LFL. However, the rating is constrained by short track record of the company in the financial services industry, exposure to execution risk as company ventures into the new business of gold Financing and venture financing, short history of promoters in NBFC business and intense competition from already established players in the market.

LRN finance is a RBI registered Deposit taking Non-Banking Finance Company (NBFC) engaged in the business of Asset Financing. The company was incorporated in November 1992 with the aim and objective of non-banking finance activity. Previously the company was run by Mr. Shanmugan Sundaresan in Salem. In December 2010, Mr. Manoranjan Roy and his management acquired the majority of shares from the erstwhile promoters. Mr. Manoranjan Roy manages the over 200 Crores conglomerate - PINCON Group, which is into the production and distribution of fast-moving consumer goods (FMCG), liquor and real estate development.

Source : Equity Bulls

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