Kotak Credit Process - Mitigating Risk Through Robust Practices

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Aditya Birla Money Limited
J M Financial Products Limited
Julius Baer Capital (India) Pvt. Ltd
Aadhar Housing Finance Limited
Bahadur Chand Investments Private Limited
Barclays Investments & Loan (India) Ltd
Bharti Telecom Ltd.
Century Textiles and Industries Limited
Chambal Fertilisers & Chemicals Ltd
Cholamandalam Investment and Finance Company Ltd.
DLF Cyber City Developers Ltd
DME Development Limited
Embassy Office Parks REIT
First Business Receivables Trust
Future Lifestyle Fashions Ltd.
Godrej Properties Limited
HDB Financial Services Ltd.
India Grid Trust
IOT Utkal Energy Services Ltd.
Jamnagar Utilities & Power Private Limited
JM Financial Services
John Deere Financial India Private Limited
Kirloskar Ferrous Industries Ltd
Mindspace Business Parks REIT – NCDs
Motilal Oswal Financial Services Limited
Muthoot Finance Ltd.
Nabha Power Ltd.
ONGC Petro Additions Ltd.
Panatone Finvest Ltd
Pilani Investment and Industries Corporation Ltd
Piramal Enterprises Ltd.
Poonawalla Fincorp Ltd
Prestige Projects Pvt. Ltd
Punjab National Bank(AT-1)
Sharekhan BNP Paribas Financial Services Pvt. Ltd
Shriram City Union Finance Ltd.
Shriram Transport Finance Co Ltd.
Tata Steel Ltd.
U P Power Corporation Ltd
Vivriti Capital Private Limited

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
J M Financial Products Limited(CRISIL A1+)New(CRISIL Rationale Link)
  • JM Financial Products Ltd (JMFPL) is the Non-Banking Finance Company (NBFC) arm of the JM Financial Group. It is a non-deposit accepting systemically important non-banking finance company registered with the Reserve Bank of India.
  • JMPFL specializes in borrowing and lending activities including Loan against Securities, IPO financing, ESOP financing, Real estate Financing, Structured Financing etc. It is one of the largest players in the securities based lending business.
  • The JM Financial Group is a diversified financial services player with an established track record and franchise and a presence in investment banking, broking, wealth management, investment advisory services, asset management, private equity, lending and asset reconstruction
  • The Debt / Equity ratio of JMPFL was 2.30 times as on Mar’22 as on standalone basis.
Julius Baer Capital (India) Pvt. Ltd(CRISIL A1+)New(CRISIL Rationale Link)
  • Julius Baer Capital India Pvt. Ltd. (JBCIL) is ultimately owned by Julius Baer Group Ltd (JBG).
  • 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).
  • Julius Baer Group 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
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
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

Barclays Investments & Loan (India) Ltd(CRISIL A1+)(CRISIL Rationale Link)
  • Barclays Investments & Loans (India) Private Limited is a wholly owned subsidiary Barclays PLC. Barclays PLC owns 100% of the company through Barclays Investment (~58%) and Barclays Mauritius Overseas Holdings (42%)
  • The company is a Non-Banking Finance Company (NBFC) and is in business of lending against financial securities (such as shares, mutual fund and bonds).
  • The company sources its entire customer from Barclays banks private banking business; which has presence in Mumbai, Chennai, Kolkata and Delhi
  • The company follows the risk management policy which is in line with Barclays group policy and has Nil NPA as on 30th Sep 2021
Bharti Telecom Ltd.(CRISIL AA+)(CRISIL Rationale Link)
  • Bharti Telecom Ltd. (BTL) is promoted by Bharti group and Singtel, Singapore.
  • BTL holds 38.62% shareholding of Bharti Airtel Limited (BAL) (Sep'22).
  • Market value of BTL’s holding in BAL is around Rs 1,91,350 crs (Oct 31, 2022)  which provides financial flexibility to the Company
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.
Chambal Fertilisers & Chemicals Ltd(CRISIL A1+)(CRISIL Rationale Link)
  • Chambal Fertilisers & Chemicals Ltd (CFCL) was incorporated in the year 1985 in Rajasthan. The company has the largest installed urea capacity (rated capacity of 3.07 MTPA) in the private sector in India. The company is also involved in trading of agri-inputs such as complex fertilisers (DAP, MOP, SSP), pesticides, seeds, etc
  • The company primarily operates in the north India because of its close proximity to its manufacturing unit and has over the years developed a strong brand/robust distribution network
  • Operating performance remains comfortable, with plants operating at over 100% utilisation and within the prescribed energy norms. Profitability of the urea division will remain immune to the rise in feedstock (natural gas) prices as this is compensated through subsidy receipts from the government
  • The company is undertaking capex for setting up of Technical Ammonium Nitrate and Nitric Acid capacity, which is likely to increase the leverage of the company
  • As on Mar’22, the Company had Debt / Equity of 0.68 times
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
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.
DME Development Limited(CARE AAA,CRISIL AAA,IND AAA)(CRISIL/CARE/India Ratings Rationale Link)
  • DME Development Limited (“DME” or “the company”), is a Special Purpose vehicle (SPV) formed by National Highway Authority of India (“NHAI” or “the authority”) with 100% shareholding.
  • It is formed to undertake the development of Delhi-Mumbai expressway; India’s longest 1,277 Km eight lane expressway between Delhi and Mumbai on a Greenfield alignment
  • The project is having concession period of 20 years including construction period of 3 years and is expected to be completed by 2023/2024
  • DME has further entered into an implementation agreement with NHAI for construction and maintenance of the project, there by transferring the risk of construction and maintenance of the project to NHAI
  • NHAI has nominated its senior and experienced personnel to DME’s board including representation of one senior official from Ministry of Road Transport and Highways
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, 1,614 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'22. 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.
  • As per available information, the Future group has monetised one of its Brand – Cover Story. FLFL has received certain proceeds out of this monetisation. As informed to us, the same has been distributed on a pro-rata basis to all lenders / NCD investors of FLFL. We have received Rs 2.73 crores out of the same. The above amounts have been adjusted against the outstanding receivable from the Company.
  • It is also to be noted that, as per the resolution plan approved by the company, an amount of Rs.19.50 lacs which is due on September 30, 2022 has been received in Jul’22.
  • In Sep’22, we have received Rs 76.39 lakhs as Lead Bank has remitted retention amount to all lenders / debt investors on pro-rata basis.
  • Financial and operational creditor has filed application under Insolvency and Bankruptcy Code before Hon’ble National Company Law Tribunal. None of them has been admitted as yet.
  • We value the investments at 21%(of the Face Value plus accrued till date of default), adjust for recoveries.
  • 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(CRISIL A1+,ICRA AA+)(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.
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
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.
  • JUPPL has a generation capacity of about 2,300 megawatt (MW) of electricity and about 10,000 tonne per hour (tph) of steam. Its power plants in Jamnagar, Hazira, and Dahej are captive to the existing petrochemicals and refining business of RIL and caters to most of its power requirement.
JM Financial Services(CRISIL A1+)(CRISIL Rationale Link)
  • JM Financial Services Ltd (JMFSL) is a 100% subsidiary of JM Financial Ltd (JMFL) and is engaged in providing equity broking, investment advisory, wealth management, and distribution services to corporates, HNIs, and retail investors.
  • It is also engaged in securities-based lending i.e. margin trade funding (MTF). JMFSL represents the Investment Advisory business of JM Financial Group and focusses on Investment Advisory and Wealth Management businesses for non-institutional clients.
  • The company has profitable operations since inception.
  • Balance sheet is comfortable with negative net debt balance sheet structure as on Mar’22.
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. 
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 ~63,021 crs, and a net worth of Rs 18,324 crore (standalone) on Jun 30, 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.
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.
Poonawalla Fincorp Ltd(CRISIL A1+)(CRISIL Rationale Link)
  • PFL is non-deposit-taking non-banking finance company, having presence over 30 year in asset backed financing. Major portfolio includes pre-owned cars, affordable housing finance, SME LAP, Loan to professional etc.
  • The group was founded by Mr. Sanjay Chamaria and Mayank Poddar. However, Poonawalla Group lead by Mr Adar Poonawalla acquired majority stake in the company in May 2021 for ~Rs. 3,500 crore
  • Post the takeover by Poonawalla, the company realigned its strategy and exhibited growth with consolidated AUM growing to ~Rs. 18,650 crore as of 30th Sep 2022
  • The housing business is carried through its wholly owned subsidiary i.e. Poonawalla Housing Finance which has a AUM of ~Rs. 5,612 crore
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 Sep'22.
  • As on Sep 30, 2022 PNB had - total capitalization of 14.74% with Tier-1 of 12.20%.
Sharekhan BNP Paribas Financial Services Pvt. Ltd(ICRA A1+)(ICRA Rationale Link)
  • Sharekhan BNP Paribas Financial Services Private Limited (SFSL) is a wholly-owned subsidiary of Sharekhan and is registered with the Reserve Bank of India (RBI) as a non-banking financial company (NBFC)
  • BNP Paribas SA Group is the ultimate parent of the Sharekhan group of companies
  • SFSL provides loans/finances to retail clients of the Group under various schemes generally known as loan against shares, initial public offer (IPO), follow-on public offer (FPO), rights issue, new fund offer, employee stock option scheme (ESOP)/employee stock purchase scheme (ESPS), and issuance of bonds and other financial product
  • SBPFSL is also registered with Insurance Regulatory and Development Authority of India (IRDAI) as a corporate agent – life
  • The loan portfolio is largely originated by Sharekhan and thus there is interdependence in the business. Apart from the parent, SFSL also source LAS deal from DSA’s. The loan portfolio predominately comprises of margin funding and LAS
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.
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.
Vivriti Capital Private Limited(CARE A)(CARE Rationale Link)
  • Vivriti Capital Private Limited (VCPL) is a Non-Bank Finance Company (NBFC) registered with Reserve Bank of India
  • VCPL is in the business of providing lending to financial and non-financial entities
  • It also lends to retail clients through co-lending agreements with other NBFCs
  • It had Asset under Management (AUM) of Rs 3,639 crs as on March 31, 2022
  • The Company is backed by private equity investors such as Creation Investments, Lightrock and TVS Capital Funds. It had raised equity of Rs 1,297 crs from these firms over last few years

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.