Kotak Credit Process - Mitigating Risk Through Robust Practices

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Aditya Birla Money Limited
Bharti Hexacom
Aadhar Housing Finance Limited
Adani Ports and Special Economic Zone Limited
Bahadur Chand Investments Private Limited
Bharti Telecom Ltd.
BOB Financial Solutions Limited
Can Fin Homes Ltd.
Century Textiles and Industries Limited
CESC Limited
Cholamandalam Investment and Finance Company Ltd.
Coastal Gujarat Power Ltd.
DLF Cyber City Developers Ltd
Embassy Office Parks REIT
First Business Receivables Trust
Future Lifestyle Fashions Ltd.
Godrej Properties Limited
HDB Financial Services Ltd.
Hero FinCorp Ltd.
India Grid Trust
IndusInd Bank Ltd.
IOT Utkal Energy Services Ltd.
Jamnagar Utilities & Power Private Limited
John Deere Financial India Private Limited
JSW Steel Ltd.
Julius Baer Capital (India) Pvt. Ltd
Kirloskar Ferrous Industries Ltd
Mindspace Business Parks REIT – NCDs
Motilal Oswal Financial Services Limited
Muthoot Finance Ltd.
Nabha Power Ltd.
Northern Arc Capital Limited
ONGC Petro Additions Ltd.
Panatone Finvest Ltd
Pilani Investment and Industries Corporation Ltd
Piramal Enterprises Ltd.
Prestige Projects Pvt. Ltd
Punjab National Bank(AT-1)
Shriram City Union Finance Ltd.
Shriram Transport Finance Co Ltd.
Tata Steel Ltd.
TVS Credit Services Limited
U P Power Corporation Ltd

Credit Papers

Aditya Birla Money Limited(CRISIL A1+)New(CRISIL Rationale Link)
  • Aditya Birla Money Limited (ABML) is part of Aditya Birla Group and it is a subsidiary of Aditya Birla Capital Limited
  • ABML is present in equity broking, commodity broking, depository services, PMS (portfolio management services) and distribution of products like mutual funds, insurance etc
  • It also holds SEBI license as a research analyst and an investment adviser.
  • It has 1.3 lakhs active customers as on Mar’22
Bharti Hexacom(CRISIL A1+)New(CRISIL Rationale Link)
  • Bharti Hexacom was incorporated in 1995 and is a subsidiary of Bharti Airtel Limited (BAL). BAL acquired a 68.5% stake in Bharti Hexacom in fiscal 2004, and increased the share to 70% in fiscal 2009. The remaining 30% is owned by Telecom Consultants of India, a wholly-owned undertaking of the Government of India.
  • It provides flagship wireless services under the Airtel brand, in Rajasthan and the Northeast. These circles are key to BAL's overall business strategy of being a pan-India player. 
  • It enjoys a healthy market position in where it operates. 
  • The gearing ratio is at 1.96x as on Mar’22
Aadhar Housing Finance Limited(CARE AA)(CARE Ratings Rationale Link)
  • Aadhar Housing Finance Limited (AHFL) is a housing finance company (HFC) engaged in providing affordable housing finance
  • Blackstone through its fund BCP TOPCO VII Pte. Ltd. hold ~98% stake in the company AHFL AUM comprises of i) housing finance which form ~84.2% of the total loan book, ii) Non- Housing loan ~15.8% (primarily LAP)
  • The company has a granular loan book, with ~64% of its customers being salaried employees
  • The loan book is also well diversified across India
  • Post take over by Blackstone, the cost of borrowing and liquidity position of the company has also improved considerably
Adani Ports and Special Economic Zone Limited(ICRA A1+)(ICRA Rationale Link)
  • Adani Ports and Special Economic Zone (APSEZL) is the largest private sector developer and operator of ports in India with 12 operational ports/terminals.
  • It commenced commercial operations at Mundra port in 2001 under a 30-year concession agreement with the Gujarat Maritime Board, valid till February 2031.
  • The Company has rapidly grown to become the largest in the country in terms of cargo handling capacity with 12 operational ports/terminals at Mundra, Dahej, Hazira, Dhamra, Kattupalli, Krishnapatnam, Mormugao, Kandla, Vizag and Ennore.
  • The ports offer handling services for all kinds of cargoes viz. dry bulk, liquid bulk, crude and containers.
  • Apart from its port operations, APSEZL is the approved developer of a multi-product SEZ at Mundra, Dhamra and Kattupalli and its surrounding areas.
  • Through its majority/wholly-owned Special Purpose Vehicles (SPVs), the company has a presence in the logistics business (container trains and inland container depots).
  • The company has a debt equity ratio which on consolidated basis as on Mar’22 was 1.18 times
Bahadur Chand Investments Private Limited(ICRA AA,ICRA A1+)(ICRA Rationale Link)
  • Bahadur Chand Investments Private Limited and its parent, Brijmohan Lal Om Prakash’s (BMOP), are the principal holding companies of Hero MotoCorp Limited (HMCL).
  • BCIPL has strong financial flexibility emanating from the market value of its investment in HMCL. It holds 20% stake in HMCL
  • BCIPL and BMOP also hold equity and preference stake in a large number of group companies viz. Hero FinCorp Limited, Hero Future Energies Private Limited etc

Bharti Telecom Ltd.(CRISIL AA+)(CRISIL Rationale Link)
  • Bharti Telecom Ltd. (BTL) is promoted by Bharti group and Singtel, Singapore.
  • BTL holds 35.85% shareholding of Bharti Airtel Limited (BAL) (Mar'22).
  • Market value of BTL’s holding in BAL is around Rs 1,47,672 crs(May 30, 2022) which provides financial flexibility to the Company
BOB Financial Solutions Limited(CRISIL A1+)(CRISIL Rationale Link)
  • BOB Financial Solutions Limited (BFSL) (formerly, BOBCARDS Limited) was incorporated in September 1994 as a credit card issuing non-banking financial company (NBFC) and is wholly owned by Bank of Baroda (BoB).
  • Its main business has been credit card issuance. Additionally, it was also providing support to BoB in managing debit card operations for domestic and overseas territory/subsidiaries. The work included providing back-office support for issuance and reconciliation of debit card transactions. However, in July 2017, the domestic debit card operations were transferred back to BoB. This was done to enable BFSL to concentrate its efforts towards the credit card business and point-of-sales (POS) operations.
  • The Company aims to revamp its traditional credit card business, provide product and service capabilities to the bank for POS operations, and explore options for sourcing of retail/small and medium enterprise products of the bank.
  • The registered office is in Mumbai and the company operates through 41 offices across India
  • The gearing ratio was 3.96x as on Mar-22
Can Fin Homes Ltd.(ICRA A1+)(ICRA Rationale Link)
  • Can Fin Homes Limited (CFHL) is promoted by Canara Bank, HDFC Limited and UTI in 1987 and is a deposit taking housing finance company registered with National Housing Bank.
  • As on Mar’22, Canara Bank has 29.99% shareholding in CFHL
  • The Company has 187 branches and 13 Satellite Offices with large presence in Southern India
  • Company is engaged in the business of providing housing finance to individuals for construction, purchase, and repair and up gradation of houses.
Century Textiles and Industries Limited(CRISIL AA)(CRSIL Rationale Link)
  • Incorporated in 1897, the company is promoted by Mr BK Birla and remains the flagship company of the BK Birla group. Following equity infusion in March and December 2015, the Aditya Birla group is a significant stakeholder in the company.
  • Company operated a cotton textile mill until 1951. Since then, it has progressively expanded into diverse fields by setting up manufacturing units in rayon, cement and pulp and paper segments.
  • The company also ventured into the real estate business. In FY18, the company incorporated a wholly owned subsidiary, Birla Estate Pvt Ltd to focus on the residential real estate business.
  • It manufactures a variety of paper products (including multi-layer packaging board and tissue paper) with total installed capacity of 4.86 lakh tonne per annum.
  • The company had a gearing ratio of 0.34x as on Mar’22.
CESC Limited(ICRA A1+)(ICRA Rationale Link)
  • CESC is the flagship company of the RP-Sanjiv Goenka Group
  • It is a vertically integrated power utility engaged in generation, transmission and distribution of electricity to the consumers in its licensed area, covering Kolkata and Howrah
  • CESC has recently won the distribution license of Chandigarh Union Territory
  • The combined installed power capacity of the group in thermal is 2,365 MW, wind is 156 MW and solar is 15 MW
Cholamandalam Investment and Finance Company Ltd.(CRISIL A1+,ICRA AA+)(CRISIL Rationale Link)
  • Cholamandalam Investment and Finance Company Ltd(CIFCL), a non-banking finance company, is a part of the Chennai-based Murugappa Group of companies.
  • The company’s core business segments include vehicle finance and home equity (HE) loans. The company has recently launched new business verticals (i.e. . Personal Loan, consumer and small enterprise loan and SME loan)
  • CIFCL has two wholly-owned subsidiaries viz., Cholamandalam Home Finance Limited and Cholamandalam Securities Limited.
  • The gearing of the company was 5.88x as of Mar-22
Coastal Gujarat Power Ltd.(CARE AA(CE))(CARE Ratings Rationale Link)
  • CGPL had implemented a 4,150-MW Ultra Mega Power Project (UMPP) in Mundra in Gujarat. The operations started in 2013.
  • CGPL has entered into Power Purchase Agreement (PPA) with DISCOMs in Maharashtra (760 MW), Gujarat (1805 MW), Rajasthan (380 MW), Punjab (475 MW) and Haryana (380 MW) for 3,800 MW power supply.
  • CGPL is a wholly owned subsidiary of Tata Power, which has a strong market position as integrated power player. 
  • Exposure on CGPL is guaranteed by unconditional and irrevocable guarantee of Tata Power.
  • Tata power is in the process of merging the company with itself
  • The debt-equity ratio was 0.51 as on Mar'21
DLF Cyber City Developers Ltd(CRISIL AA)(CRISIL Rationale Link)
  • DLF Cyber City Developers Ltd (DCCDL) is involved in the business of developing, setting up and maintaining of commercial offices, retail spaces, technology parks and software parks. GIC Singapore owns 33.33% in DCCDL and the balance 66.67% is held by DLF Limited.
  • The company has total leasable area of 43 msqft out of which 36.3 msqft is leased as of Mar 2022.
  • DCCDL is spread across NCR which represents ~72% of GAV. Chennai represents ~19%, Hyderabad 6%, Kolkata 2% and Chandigarh 1% of GAV (Gross Asset Value) in Mar’22
  • Tenant concentration is comfortable with top 10 tenants contributing to ~26% of revenue in Mar’22.
  • DCCDL has profitable operations with positive operating cash flow and acceptable balance sheet structure.
Embassy Office Parks REIT(CRISIL AAA)(CRISIL Rationale Link)
  • Embassy REIT is registered as an irrevocable trust under the Indian Trust Act, 1882, and as a real estate investment trust (REIT) with SEBI’s Real Estate Investment Trust Regulations.
  • It is sponsored by BRE Mauritius Investments (part of the Blackstone group) and Embassy Property Development Pvt. Ltd (part of the Embassy group). Investment is in NCD issued by REIT, it gets stable cash flow primarily from rental of commercial assets
  • Its portfolio of asset include 12 commercial assets (office parks and city centric offices), 4 hotels, and a solar plant covering 42.4 million square feet commercial space, 1,096 hotel keys and 100 MW solar power plant.
  • 90% of the revenue is from 12 established commercial assets and 1 solar park with stable operations and a track record of at least 5 years of rental collection.
  • The commercial assets enjoy robust occupancy of around 87% and have upside potential for rentals, given the good asset and service quality.
  • The projects are located in prime areas of Mumbai, Pune, Bengaluru, and National Capital Region.
  • The net debt to total assets ratio was 0.24 times as on Mar’22
First Business Receivables Trust(CRISIL AAA(SO))(CRISIL Rationale Link)
  • It is a securitization where loan given by Reliance Industries Limited (RIL) to Reliance Corporate IT Park Ltd(RCIPTL) has been assigned to PTC Holder. The same will be serviced from service receivable from Reliance Industries Limited, Reliance Retail Limited(RRL) and Reliance Jio Infocomm Limited(RJIL).
  • Reliance Corporate IT Park Ltd (RCITPL) provides infrastructure, IT and IT enabled services across India including from its office complex in Ghansoli, Navi Mumbai to RIL, RJIL and RRL, for which it has entered into ’Business Service Agreements’ (BSA) for a period of 13 years.
  • The same is rated as AAA(SO) by CRISIL as the primary risk is predicated on RIL,RJIL,RRL which are rated as AAA.
Future Lifestyle Fashions Ltd.(CRISIL D)(CARE Rationale Link)
  • Future Lifestyle Fashions Ltd.(FLF) operates in fashion retail and distribution. FLF operates retail outlets in 3 broad formats–Central (big-box fashion retailer),Brand Factory (fashion discount chain) and Exclusive Brand Outlets
  • Lockdown/Covid-19 has impacted fashion/retail industry significantly, also impacting financial and operating performance of FLF
  • Above resulted in multiple downgrade of external rating of company.  The rating was downgraded to below investment grade in Oct’20
  • We had exercised put option on NCDs issued by FLF, by virtue of which the maturity shifted to 9th Nov'20 from 9th Nov'2022. The Company failed to make the repayment including interest payment on due date which resulted in downgrade of external rating to D
  • As per direction of NCLT, Mumbai, the Company had convened the meeting of Secured Creditors for the voting on Scheme of Arrangement with Reliance Group.  82.75%of votes cast by Secured Creditors of FLF were against the proposed scheme. Reliance Group has informed the exchange that the Scheme of arrangement can't be implemented
  • It has received termination notices for sub-leased properties from Reliance entities for few Central and Brand Factory Stores
  • Due to above significant development with regards to Scheme and increased in uncertainties, we have further marked down the valuation to 25%(Face value plus accrued till date of default).
  • We will continue to monitor the developments in the company and take all necessary steps to recover the dues from the company, in the best interest of unit holders.
Godrej Properties Limited(ICRA AA,CRISIL A1+)(CRISIL Rationale Link)
  • Godrej Properties Ltd (hereinafter, GPL) is currently developing residential, commercial and township projects spread across approximately 12 cities.
  • GPL is a part of the Godrej Group which is amongst India’s most diversified conglomerates.
  • The Godrej Group was established in 1897 and comprises of a varied business portfolio that includes real estate development, fast moving consumer goods, advanced engineering, home appliances, furniture, security, and agri-care.
  • In 2010, Godrej Properties became a publicly listed company through a successful IPO. It is one of India’s only national developers with a strong presence across the country’s leading real estate markets.
  • The net debt-equity ratio was 0.05x as on Mar’22.
HDB Financial Services Ltd.(CARE AAA,CRISIL AAA)(CRISIL Rationale Link)
  • HDB Financial Services Limited(HDB Finance) was set up as an non-banking finance company by HDFC Bank. HDFC Bank owns majority of equity shares in HDB Finance. 
  • Apart from the lending business, HDB Finance is also engaged in the distribution of general and life insurance products for HDFC Ergo General Insurance Company and HDFC Standard Life Insurance Company, respectively. The company also runs BPO services that undertake collection services, back office and sales support functions under a contract with HDFC Bank.
  • HDB Finance receives support from HDFC Bank in terms of operational and managerial support with regard to formulation of credit policies, portfolio monitoring and collection practices and also receives regular funding support.
  • The company complements the parent's product portfolio and distribution network, and supports collection activities for the retail portfolio.
  • It has a gearing of 4.70 as on Mar'22.
Hero FinCorp Ltd.(CRISIL A1+)(CRISIL Rationale Link)
  • Hero Fincorp (HFCL) is part of Hero Group
  • HFCL is a non-banking financial company (NBFC) engaged in extending retail finance for two-wheeler sales of Hero Moto Corp Limited(HMCL), bill discounting for HMCL’s suppliers, loans to small and medium enterprises, and loan against property (LAP) etc.
  • The company has also forayed into segments such as used car financing and personal loans. HFCL is a key company for the Group’s foray into financial services and is strategically important to the Group as the captive financier of the two-wheeler sales of HMCL.
  • The gearing ratio was 5.4 as Mar’22
India Grid Trust(CRISIL AAA)(CRISIL Rationale Link)
  • India Grid Trust (IndiGrid) was set up on October 21, 2016, as an irrevocable trust under the provisions of the Indian Trusts Act, 1882, and was registered with SEBI as an Infrastructure Investment Trust (InvIT)
  • IndiGrid operates in power transmission sector and its portfolio primarily consists of power transmission assets
  • All SPVs (except one) under IndiGrid are interstate transmission system (ISTS) licensees and comes under the point of connection pool mechanism, where Power Grid Corporation of India, as the central transmission utility, collects monthly transmission charges from all designated customers on behalf of the licensees
  • IndiGrid was originally sponsored by Sterlite Power Grid Ventures Ltd (SPGVL). As of March 2022, KKR is the sponsor of the trust.
  • It has a gearing ratio of 2.44 as on Mar-22
IndusInd Bank Ltd.(CRISIL A1+)(CRISIL Rationale Link)
  • IndusInd is a new-generation private-sector bank; it commenced operations in 1994. 
  • The bank has a pan-India presence, with around 5,876 branches (including 2,795 branches of BFIL) and 2,767 automated teller machines (ATMs) as on Mar'22.
  • The deposits stood at Rs.2,93,681 crs and advances stood at Rs.2,39,051 crs as on Mar'22.
IOT Utkal Energy Services Ltd.(CRISIL AAA)(CRISIL Rationale Link)
  • IOT Utkal Energy Services Ltd.(IOTUL) is a SPV which has set up crude and product storage tanks on Build-Own-Operate-Transfer (BOOT) basis for Indian Oil Corporation’s (IOC) Paradip refinery in Orissa.
  • IOTUL achieved successful completion and deemed commissioning of crude oil tankages in October 2013. The total project cost incurred for the construction of the facility was Rs.3,553 crore and the BOOT period is 15 years from COD (up to October 2028). 
  • IOTUL’s crude and product storage tanks facility plays a critical role in the operations of IOC’s Paradip refinery. IOTUL also benefits from the fixed cash flows arising from its contractual agreement with IOC.
  • The NCDs of IOT Utkal are backed by an annuity based contract executed with its sole counterparty, Indian Oil Corporation Ltd.
Jamnagar Utilities & Power Private Limited(CRISIL AAA)(CRISIL Rationale Link)
  • Jamnagar Utilities & Power Pvt. Ltd. (owned by promoters of Reliance Industries Ltd. – RIL) has set up power plants for RIL and also operates them.
  • Its power plants, based in Jamnagar, Hazira, and Dahej, are captive to RIL's existing facilities of its petrochemicals and refining business (including the recent expansion) and caters to a most of its power requirement.
  • These plants are at Jamnagar (both in domestic tariff area and special economic zone) and Hazira with combined capacity of 1116 MW of power and 4490 tonnes per hour of steam.
  • The debt-equity ratio was 0.66 as on Mar'21
John Deere Financial India Private Limited(CRISIL AAA)(CRISIL Rationale Link)
  • John Deere Financial India Private Limited (JDFIPL), incorporated in October 2011, is a systemically important non-deposit taking non-banking financial company (NBFC) registered with the Reserve Bank of India (RBI).
  • It is a wholly-owned subsidiary of John Deere India Private Limited (JDIPL), which, in turn, is indirectly wholly owned by Deere & Company (Deere; through John Deere Asia (Singapore) Pte Limited), USA.
  • JDFIPL was incorporated with the aim to support sales of JDIPL vehicles in India.
  • It primarily offers retail finance for the purchase of farm equipment manufactured and sold by JDIPL and for the construction equipment manufactured and sold by Wirtgen India Private Limited (which was also acquired by Deere & Company in Dec’17).
  • The gearing ratio for the company is 3.70 as on Mar’22
  • Deere & Co, headquartered in US, is a world leader in farm and farm equipment manufacturing with a global presence. The company operates through three business segments: agriculture and turf, construction and forestry, and financial services. 
JSW Steel Ltd.(ICRA A1+)(ICRA Rationale Link)
  • JSW Steel is part of the O.P. Jindal Group and manufactures iron and steel products. It is present in India, US, Chile, Italy and Mozambique.
  • Key products include hot-rolled steel strips, sheets/plates, mild steel (MS) cold-rolled coils/sheets, MS galvanised plain/corrugated/colour-coated coils/sheet, steel billet, bars and rods.
  • JSW Steel has total combined installed capacity of 26 million tonnes per annum (mtpa).
  • The company has a leading market share in southern and western India.
  • JSW Steel benefits from locational advantages, low manpower costs and operational efficiencies.
  • Backward integration is expected to take care of ~50% of the company’s iron ore requirements which reduces cost for the company. The company has low conversion cost per tonne compared to its domestic peers
  • The consolidated net gearing of the company is comfortable at 1 times in Mar’22
Julius Baer Capital (India) Pvt. Ltd(CRISIL A1+)(CRISIL Rationale Link)
  • Julius Baer Capital India Pvt. Ltd. (JBCIL) is wholly owned subsidiary of Julius Baer Advisors India Pvt. Ltd (JBWA). It is primarily involved in providing finance against security (margin funding and loan against share) of capital market instruments (equity stocks, bonds and mutual funds).
  • JBCIL is part of the Julius Baer Group which is Switzerland based wealth management group. JBCIL shares brand name and has demonstrated track record of operational and managerial support from the Group JBCIL has gearing (Debt/Equity) of ~3x as on March 2022
  • The NBFC lends to only wealth management clients of Julius Baer Group in India which have strong net worth. Also all loans are secured by liquid collateral with LTV<50%. Consequently, asset quality is strong with NIL GNPA
Kirloskar Ferrous Industries Ltd(ICRA AA)(ICRA Rationale Link)
  • Kiroskar Ferrous has been operating in India for last 3 decades and is part of reputed Kirloskar group. The company manufactures high quality pig Iron and thin-walled quality grey iron castings to cater to the growing demand in industry sectors such as Tractors, Automotives and Diesel Engines.
  • The company works with marquee clients in tractor and Commercial vehicle segment and holds healthy share of their business.
  • It has strong track record of adding new clients to the list. Kirloskar Ferrous has recently acquired controlling stake in Indian Seamless Metal Tubes.
  • Financial profile is comfortable with gross gearing of 0.43x as on Mar’22.
Mindspace Business Parks REIT – NCDs(CRISIL AAA)(CRISIL Rationale Link)
  • Mindspace REIT is registered as an irrevocable trust under the Indian Trust Act, 1882, and as a Real Estate Investment Trust (REIT) with SEBI’s REIT Regulations, 2014. Mindspace REIT’s portfolio assets are held through the following asset SPVs.
  • The property has been operational since 2005.
  • The real estate investment trust (REIT) owns eight special purpose vehicles (asset SPVs) comprising 10 commercial offices, information technology (IT) parks and special economic zone (SEZ) assets, and houses the facility management division.
  • The net debt to total assets ratio was 0.16 times as on Mar’22
Motilal Oswal Financial Services Limited(CRISIL A1+)(CRISIL Rationale Link)
  • Motilal Oswal Financial Services Limited (MOFSL) is among India’s leading provider of capital market related services.
  • Motilal Oswal group is majorly present in fee-based businesses like broking, asset & wealth management and investment banking
  • MOFSL, ranks among the top ten equity brokers by active number of active clients in the broking industry.
  • MOFSL, had a debt-equity ratio of 1.08 times on consolidated basis as on Mar'22
Muthoot Finance Ltd.(CRISIL A1+,CRISIL AA+)(ICRA Rationale Link)
  • Muthoot Finance Ltd.(MFL) was incorporated in 1997 and is India’s largest gold loan focused NBFC with loan book of Rs ~59,384 crs, and a net worth of Rs 18,344 crore (standalone) on Mar 31, 2022.
  • Muthoot Finance Limited (MFL) is the flagship company of the Kerala-based business house, The Muthoot Group, which has diversified operations in financial services, healthcare, real estate, education, hospitality, power generation and entertainment.
  • It had a debt-equity ratio of 2.9 times as on Mar’22.
Nabha Power Ltd.(ICRA AAA(CE))(ICRA Rationale Link)
  • Nabha is a 100% indirect subsidiary of Larsen & Toubro.
  • Nabha has developed 1400 megawatt super critical coal-based thermal power project in Rajpura (Punjab). Nabha has in turn contracted a 25-year power purchase agreement with Punjab State Power Corporation Ltd (PSPCL).
  • The NCDs are secured by unconditional and irrevocable guarantee from Nabha ultimate parent, Larsen and Toubro Ltd(L&T), effectively making this an L&T obligation.
  • It had a debt-equity ratio of 1.4 times as on Mar’22.
Northern Arc Capital Limited(ICRA A1+)(ICRA Rationale Link)
  • Northern Arc Capital Limited (NACL), is a non-deposit taking systematically important NBFC registered with RBI.
  • NACL is primarily engaged in enabling small and medium sized NBFCs to access debt capital including by way of securitization and debentures. It also provides loans to these NBFCs
  • NACL started NBFC activities in 2008 with focus on microfinance sector primarily to small and medium sized MFIs and later has expanded scope of its NBFC activities to include Affordable Housing Finance, Small Business Loans, Commercial Vehicle Finance, Agricultural Finance and Corporate Finance
  • NACL has two wholly owned subsidiaries namely, Northern Arc Investment Adviser Services Private Limited and Northern Arc Investment Managers Private Limited
ONGC Petro Additions Ltd.(ICRA AAA(CE))(ICRA Rationale Link)
  • ONGC Petro additions Limited is a Joint Venture incorporated in 2006, promoted by Oil and Natural Gas Corporation Limited (ONGC) and GAIL (India) Limited (GAIL) and co-promoted by Gujarat State Petroleum Corporation Ltd. (GSPC) with stake of 49.36%, 49.21% and 1.43% .
  • OPaL has setup a 1.1 MMTPA (million metric tonnes per annum) Greenfield petrochemicals complex at Dahej SEZ in Gujarat. The principal business of OPaL is to produce, purchase, treat, market, distribute, import, export and trade petrochemicals products and its by-products. It has a 13% market share in production terms.
  • There are strong linkages with ONGC as OPAL remains strategically important to ONGC and ONGC has also infused capital in the form of warrants and has provided backstopping support for CCDs. OPaLs project is a part of forward integration plans of ONGC. Entire feedstock for OPaL is currently sourced from ONGC.
  • The bonds has letter of comfort from ONGC
Panatone Finvest Ltd(CRISIL AAA/A1+)(CRISIL Rationale Link)
  • Panatone Finvest Ltd (PFL) is principal telecom & media holding company of Tata Group and is held ~100% by Tata Sons.
  • The Company is registered as Core Investment Company (CIC) with Reserve Bank of India
  • PFL currently holds significant stake in Tata communications Ltd(TCL) and Tejas Networks Ltd (TNL).
  • The market value of its investment in group companies is significantly higher than debt outstanding
Pilani Investment and Industries Corporation Ltd(CRISIL A1+)(CRISIL Rationale Link)
  • Pilani Investment and Industries Corporation Limited (PIICL) is an investment holding company of “Birla Group”
  • Investments in group companies including Hindalco Industries Limited, Grasim Industries Limited, UltraTech Cement Limited, Century Textiles and Industries Limited, Aditya Birla Capital Limited, Aditya Birla Fashion and Retail Limited etc
  • The Company is registered as NBFC with Reserve Bank of India
  • The market value of its investment is listed companies is significantly higher than debt outstanding
Piramal Enterprises Ltd.(CRISIL A1+)(CRISIL Rationale Link)
  • Piramal Enterprises Limited (PEL) is involved in manufacturing of pharmaceuticals for CRAMS, critical care and OTC segments through subsidiary Piramal Pharma Limited. It is present in financial services also
  • through subsidiaries.

    • In the pharma space, PEL offers services across drug lifecycle-from development and commercial manufacturing to off-patent supplies of APIs and formulations. Its critical care portfolio largely comprises inhalation and injectable anaesthetics.
    • In financial services business - It is engaged in wholesale financing to real estate developers and corporate clients and emerging corporate lending, and retail loans in various categories including housing loan
    • The group has acquired Dewan Housing Finance under insolvency process
    • PEL also holds substantial stake in Shriram group companies.
    • PEL also manages a real estate-focused private equity fund and has strategic alliances with global funds.
    • It has a standalone gearing of 0.25 as on Mar’22.
Prestige Projects Pvt. Ltd(ICRA A+(CE))(ICRA Rationale Link)
  • Prestige Projects Private Limited (PPPL), is part of Prestige Estates Projects Limited (PEPL). At present, PEPL holds a 60% stake in the company and the remaining 40% is held by Pinnacle Investments (a firm owned by promoters of PEPL).
  • PPPL owns a land parcel of 171 acres near Sarjapur Road, in East Bangalore. The entire land is being developed into an integrated township called, The Prestige City comprising plotted development, villas, residential apartments (phase 1 and phase 2) and a retail mall with a total saleable area of 11.99 msft.
  • The project has got response in terms of sales of apartment and plots since its launch in 2021
  • The NCD investments in PPPL is backed by corporate guarantee from PEPL
  • The NCDs are secured by underlying project with a security cover of minimum 1.50 times
Punjab National Bank(AT-1)(CARE AA)(Care Ratings Rationale Link)
  • Punjab National Bank is the second largest Public Sector Bank in India.
  • Govt. of India (GOI) owns 73.15% as on Mar'22.
  • As on Mar 31, 2022 PNB had - total capitalization of 14.50% with Tier-1 of 11.73%.
Shriram City Union Finance Ltd.(CARE AA)(CARE Ratings Rationale Link)
  • Shriram City Union Finance Limited (SCUF), commenced its operations in 1986, is a deposit accepting non-banking financial company (NBFC-D) registered with Reserve Bank of India (RBI) and part of Shriram Group.
  • The company started its operations with truck financing during initial stages however from 2002 onwards, SCUF started focusing towards SME financing and other retail business.
  • SCUF offers services under product categories such as SME/Small Business loans loans (SBL), 2 wheeler loans (2W), Auto loans (AL), Loans against Gold (LAG) and Personal Loans (PL).
  • The gearing ratio was 3.41 as on Mar'22
Shriram Transport Finance Co Ltd.(CRISIL AA+)(CRISIL Rationale Link)
  • Shriram Transport Finance Company (STFCL) was incorporated in 1979, is the flagship company of the Shriram group.
  • It is registered with RBI as a deposit-taking, asset-financing non-banking financial company.
  • STFCL provides financing for vehicles such as CVs (both pre-owned and new), tractors, and passenger vehicles.
  • With presence of almost four decades in this space, STFCL has deep understanding of this sector
  • It has pan-India presence, with about 1,817 branches
Tata Steel Ltd.(CRISIL A1+,CARE AA+)(CARE Ratings Rationale Link)
  • Tata Steel Limited was established as India’s first integrated steel company in 1907.
  • The company has presence across the entire value chain of steel manufacturing from mining and processing iron ore and coal to producing and distributing finished products.
  • The company offers a broad range of steel products such as hot rolled, cold rolled, coated steel, rebars, wire rods, tubes and wires.
  • Tata steel has an annual steel production capacity of 34 million tonnes globally(19.6 million tonnes in India)
  • The company is one of the most geographically diversified steel producers, with operations in various countries and commercial presence in more than 50 countries across the globe
  • Tata Steel is one of the leading company of the Tata Group
  • The debt equity ratio is 0.26 times as on Mar’22 on standalone basis.
TVS Credit Services Limited(CRISIL A1+)(CRSIL Rationale Link)
  • TVS Credit, a non-banking financial company, is a part of the Chennai-based TVS Group of Companies.
  • TVS Credit is a subsidiary of TVS Motor Company Limited
  • The company currently finances two-wheelers (of TVS Motor), new tractors, used tractors, used cars, consumer durables and used commercial vehicle.
  • The Company had loan book of Rs 14,014 crs as on March 31, 2022
  • The Company has capital adequacy ratio of 18.64% as on Mar’22
U P Power Corporation Ltd()(India Ratings Rationale Link)
  • U P Power Corporation Limited (“UPPCL” or “the Company”) is a power distribution company wholly owned by the UP Government (GoUP). The Company has issued bonds, to fund its operations, under the provisions of the UDAY (Ujwal DSICOM Assurance Yojana) agreement.
  • The Company has issued bonds under two structures with a  rating of A+(CE).
  • Under the first structure rated A+(CE) where coupon rate for bonds is 10.15% and 9.75%, the bonds are secured by charge on receivables of UPPCL and also have a structured payment mechanism which involves charge on subsidy receivables from GoUP. These are further secured by an unconditional and irrevocable guarantee from Govt. of Uttar Pradesh.   
  • Under the other structure rated A+(CE) where coupon rate for bonds is 9.70%, the bonds are secured by charge on receivables of UPPCL. It will be further supported by fund infusion from GoUP on quarterly basis through budgetary allocation i.e. debt servicing by GoUP. These are further secured by an unconditional and irrevocable guarantee from Govt. of Uttar Pradesh.
  • Both the structures have escrow mechanism wherein daily collections are deposited into escrow a/c which gets used for servicing of bonds.

Disclaimers: The above disclosure on credit quality of the debt instruments is based on the information provided by rating agencies/respective companies. Few schemes of Kotak Mutual Fund have taken exposure in the debt instruments issued by above companies. In future, the Fund Manager at their discretion may or may not invest in the Debt instruments issued by above companies.

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© Kotak Mutual Fund.2022
Mutual fund investments are subject to market risks, read all scheme related documents carefully.
© Kotak Mutual Fund.2022
Mutual fund investments are subject to market risks, read all scheme related documents carefully.