Key Credit Brief

KEY CREDIT BRIEF

A brief on credit rationales and analysis of less known credit papers in our portfolio.

Kotak Credit Process - Mitigating Risk Through Robust Practices

Select Statement Of Holdings In Our Fixed Income Funds As On

Credit Papers	Kotak Banking and PSU Debt Fund	Kotak Bond Fund	Kotak Bond Short Term Fund	Kotak Corporate Bond Fund	Kotak Credit Risk Fund	Kotak Dynamic Bond Fund	Kotak Low Duration Fund	Kotak Liquid Fund	Kotak Medium Term Fund	Kotak Money Market Fund	Kotak Savings Fund	Kotak Floating Rate Fund	Kotak Debt Hybrid Fund
IIFL Wealth Prime Ltd.
Nxtra Data Limited
Pilani Investment and Industries Corporation Ltd.
360 One Wam Limited (Erstwhile IIFL Wealth Management Ltd)
Aadhar Housing Finance Limited
Bahadur Chand Investments Private Limited
Barclays Investments & Loan (India) Ltd
Bharti Telecom Ltd.
Blue Star Ltd.
Century Textiles and Industries Limited
Cholamandalam Investment and Finance Company Ltd.
Dalmia Cement (Bharat) Ltd
Deutsche Investments India Pvt. 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.
J M Financial Products Limited
Jamnagar Utilities & Power Private Limited
JM Financial Services Ltd.
John Deere Financial India Private Limited
JSW Energy Limited
Julius Baer Capital (India) Pvt. Ltd
Kirloskar Ferrous Industries Ltd
Mindspace Business Parks REIT – NCDs
Motilal Oswal Financial Services Limited
Muthoot Finance Ltd.
Network18 Media & Investments Ltd.
Nuvama Wealth and Investment Ltd
ONGC Petro Additions Ltd.
Panatone Finvest Ltd
Piramal Enterprises Ltd.
Piramal Pharma Limited
Poonawalla Fincorp Ltd
Punjab National Bank
Sharekhan Limited
Shriram Finance Limited
Tata Steel Ltd.
TV 18 Broadcast Ltd.
U P Power Corporation Ltd
Vivriti Capital Private Limited

Credit Papers

IIFL Wealth Prime Ltd.(CRISIL A1+)New(CRISIL Rationale Link)

IIFL Wealth Prime Limited is an NBFC registered with the RBI, and a 100% subsidiary of 360 One WAM Ltd (earlier known as IIFL Wealth Management Limited).
The NBFC offers a range of lending solutions to group’s clients and is leading NBFC in India by asset size in the wealth management industry. It is primarily involved in lending against securities loans against securities, loan against property, margin trading funding and unsecured loans. Loan Against security represents ~87% of loan book in FY22.
NBFC follows risk management framework keeping sufficient collateral cover on disbursed loans which are monitored regularly.
NBFC is profitable with net profit of Rs 233 crores in FY2022.
It is well capitalised and has capital adequacy ratio of 23.61% in Mar 2022.

Nxtra Data Limited(CRISIL A1+)New(CRISIL Rationale Link)

Nxtra Data Limited (“Nxtra” or “the company”), a subsidiary of Bharti Airtel Limited (BAL), offers largest network of secure, scalable, and sustainable data centers in India to leading enterprises, hyperscalers, start-ups, SMEs and governments.
BAL currently holds ~76% of shareholding and balance is held by Carlyle Group (a global private equity player)
Nxtra is strategically important to BAL and is the anchor tenant of the company. Furthermore, Nxtra helps the parent to offer data centre services to enterprise clients, which complements its network product offering.
The company has posted healthy growth in revenue in FY22/9MFY23 driven by new capacity additions and healthy demand for data canter’s
The demand for data center capacities is expected to continue to rise amidst rising data consumption which is likely to be further accentuated by 5G launch
Financial profile of the company remains robust with low Debt/Equity of 0.1x and Debt/EBITDA of 0.4x as of Sep’22

Pilani Investment and Industries Corporation Ltd.(CRISIL A1+)New(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

360 One Wam Limited (Erstwhile IIFL Wealth Management Ltd)(ICRA A1+)(ICRA Rationale Link)

IIFL Wealth Management Ltd (IIFLWAM) is one of the leaders in private wealth management in India. Key shareholders are promoters of IIFL group, General Atlantic and Fairfax.
IIFLWAM along with its wholly-owned subsidiaries, is primarily engaged in the distribution, advisory, asset management, broking, and lending solutions for clients in the wealth management segment
The company serves highly specialized and sophisticated needs of high net worth and ultra-high net worth individuals, affluent families, family offices and institutional clients through a comprehensive range of tailored wealth management solutions. It has consolidated asset under management (AUM) of Rs. 3.45 lac crores as of Dec’22
The entity is listed on Indian stock exchanges with market capital of ~Rs 16,000 crores.
The company has profitable operations with EBITDA margins of ~56% in Mar’22
Balance sheet is well capitalised with Net Debt/Equity of 1.1x in 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 ~98.72% stake in the company as on 31st Mar 2022. AHFL AUM comprises of i) housing finance which form ~81.8% of the total loan book, ii) Non- Housing loan ~18.2% (primarily LAP) as of Mar 22
The company has a granular loan book, with ~61.5% of its customers being salaried employees as of Mar 22
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 31st Dec 2022

Bharti Telecom Ltd.(CRISIL AA+,CRISIL A1+)(CRISIL Rationale Link)

Bharti Telecom Ltd. (BTL) is promoted by Bharti group and Singtel, Singapore.
BTL holds 38.61% shareholding of Bharti Airtel Limited (BAL) (Dec'22).
Market value of BTL’s holding in BAL is around Rs 1,70,708 crs (Feb 28, 2023) which provides financial flexibility to the Company

Blue Star Ltd.(CRISIL A1+)(CRISIL Rationale Link)

Blue Star Limited (BSL) established in the year 1943; is India’s leading central AC and commercial refrigeration company, and its manufacturing facilities are spread across various locations in India
The company’s operations can be classified into three segments, namely, Electromechanical Projects and Packaged Air Conditioning Systems (EMP), Unitary Products (UP) and Professional Electronics and Industrial Systems (PEIS), each contributing approx. 52%, 44% and 4%, respectively, to the consolidated net sales of the company for 9 months ending 31st Dec 2022, respectively
It has presence in 18 international markets in the Middle East, Africa, SAARC and ASEAN regions through its product distribution business and joint venture companies
The company has robust order book in EMP Segment as of Dec 2022 which provides revenue visibility
The company has robust financial profile with Total Debt/Equity of 0.7x as of H1FY23

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.

Cholamandalam Investment and Finance Company Ltd.(ICRA AA+,IND AA+)(ICRA 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

Dalmia Cement (Bharat) Ltd(CRISIL A1+)(CRISIL Rationale Link)

Dalmia Cement Bharat Ltd (DCBL) is a cement company established in 1939 and has been operating in India for more than 80 years.
Over the years company has grown through brownfield projects and acquisitions. The company currently has 14 plants in 9 states with total capacity of 37 mn tonne per annum (MTPA).
It is the 4th largest cement manufacturer in the country, with installed capacity of 37.0 MT as on Dec 31, 2022.
The company is one of lowest cost producers. It has diverse product portfolio with strong brand recognition.
Financial performance of the company remains robust with company reporting ~24% YoY growth in revenues for 9 months ending 31st Dec'22 with healthy profitability.
Balance sheet leverage continues to be comfortable with Debt/Equity of ~0.4x in Sep’22

Deutsche Investments India Pvt. Ltd.(CRISIL A1+)(CRISIL Rationale Link)

Deutsche Investments India Private Limited serves as the non-banking lending arm of the Deutsche Bank AG in India, with the underlying business of extending loans against securities (LAS).
The overall scale of operations remains modest with net advances at ~Rs. 1,816 crore as on Dec 31, 2022
The financial risk profile remains comfortable given the ownership structure and the shared brand name, comfortable asset quality and capitalisation profile (CRAR of 45.04% as on March 31, 2022 and gearing of ~1.29 times as on Dec 31, 2022), robust risk management systems in line with the Group’s global risk management policies, and adequate liquidity profile (on the back of well-matched asset and liability maturities).

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 operational leasable area of 39.6 msf as of Sep 2022
The portfolio is spread across seven states including Gurgaon (59% of the leasable area), followed by Chennai (20% of the leasable area), Hyderabad, Noida, Kolkata, Delhi and Chandigarh
DCCDL has profitable operations with positive operating cash flow and acceptable balance sheet structure.

DME Development Limited(CARE AAA)(CRISIL 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
It has a portfolio of assets which include 12 commercial assets (office parks and city centric offices), 96 buildings, 1,614 hotel keys (including under construction) and 100 MW solar power plant as of Dec 31, 2022
The commercial assets enjoy robust occupancy of around 86% 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.
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.(CRISIL AAA,CARE 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 December 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.

J M Financial Products Limited(CRISIL A1+,ICRA AA)(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.

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 Ltd.(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.

JSW Energy Limited(ICRA A1+)(ICRA Rationale Link)

JSW Energy Limited (JEL) is in the business of power generation and transmission primarily in the states of Karnataka, Maharashtra, Rajasthan, and Himachal Pradesh. The company has its presence across power sectors including generation, power transmission, mining, power plant equipment manufacturing and power trading
JEL has an operating generation capacity of ~4.8 GW comprising of 66% Thermal Energy and balance being renewable
The company has plans to expand its capacities with major focus on renewable energy.
The company intend to achieve renewable and thermal power split of 81%:19% by FY30
JEL has stable financial profile as of H1FY23 with Total Debt/Equity and Net Debt/EBITDA of 0.53x and 1.7x respectively

Julius Baer Capital (India) Pvt. Ltd(CRISIL A1+)(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

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(ICRA A1+)(ICRA 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 AA+)(CRISIL Rationale Link)

Muthoot Finance Ltd.(MFL) was incorporated in 1997 and is India’s largest gold loan focused NBFC with consolidated loan book of ~Rs 64,775 crs, and a net worth of ~Rs 21,118 crore (consolidated) on Dec 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.

Network18 Media & Investments Ltd.(CARE A1+)(CARE Rationale Link)

Network18 Media and Investments Ltd (Network18) is media and entertainment company with interests in television broadcasting (CNBC channels), internet, filmed entertainment, digital commerce, magazines, and allied businesses.
Network18 manages various internet businesses, including portals such as moneycontrol.com, news18.com, firstpost.com and in.com. It also has investments in e-commerce properties such as bookmyshow.com and yatra.com. Network18 is also present in the publishing segment and publishes Forbes India, Overdrive, Better Interiors and Better Photography magazines.
Reliance Industries (RIL) indirectly owns 73.15% in the business. It is the largest investment of Reliance group in media and entertainment segment and has synergies with telecom business of RIL.
Network18 has acceptable capital structure with group gross gearing of 0.64x as on Sep’22.

Nuvama Wealth and Investment Ltd(CRISIL A1+)(CRISIL Rationale Link)

Nuvama Wealth and Investment Ltd (NWIL) is broking arm of Nuvama Wealth Management Ltd (NWML). PAG is the major shareholder of NWML with Edelweiss Financial Services Ltd (EFSL) being a minority shareholder.
PAG is a global alternative investment firm that manages multiple asset classes, including private equity, real estate and hedge funds. It is considered as one of the largest private investment firms in Asia with over US $50 billion of assets under management in private equity, real estate, and absolute returns
NWIL is a trading member of National Stock Exchange (NSE), Bombay Stock Exchange (BSE), Multi Commodity Exchange of India Ltd (MCX) and National Commodity and Derivatives Exchange Ltd (NCDEX). It provides broking services to its clients. The company is also registered as depository participant with National and Central Securities Depository providing depository services to its clients. NWIL acts in the capacity of distributor of various financial products such as mutual funds, bonds, PMS, structured products and AIFs.
NWIL recorded revenue growth of ~41% YoY for 9 months ending Dec 31, 2023. The operations of the company continue to be profitable.
NWIL has well capitalised balance sheet with gross gearing of 2.1x in 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 have letter of comfort from ONGC

Panatone Finvest Ltd(CRISIL 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

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.

Piramal Pharma Limited(CARE AA)(CARE Rationale Link)

Piramal Pharma Limited (PPL) is a part of Piramal group.
The company primarily undertakes contract development and manufacturing (CDMO), complex hospital generics (critical care), and consumer healthcare (OTC)
The company has presence in more than 100 countries and has manufacturing plants in India, the UK, and North America. Over the years, the company has majorly grown through inorganic acquisitions and has closed and integrated close to 15 M&A deals
The company derives substantial portion of its revenue from regulated markets i.e. North America, Europe and Japan.
The company has Total Debt/Equity of 0.7x as on Sep’22 on consolidated basis.

Poonawalla Fincorp Ltd(CRISIL A1+,CRISIL AA+)(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 standalone AUM growing to ~Rs. 13,929 crore as of 31st Dec 2022

Punjab National Bank(CRISIL AA+,CARE A1+,CARE AA)(CRISIL Rationale Link)

Punjab National Bank is the second largest Public Sector Bank in India.
Govt. of India (GOI) owns 73.15% as on Dec'22.
As on Sep 30, 2022 PNB had total capitalization of 15.15% with Tier-1 of 12.21%.

Sharekhan Limited(ICRA A1+)(ICRA Rationale Link)

Sharekhan Limited (“Sharekhan” or “the company”) is a security broking service provider, registered with the Securities and Exchange Board of India (SEBI). The company is wholly owned by BNP Paribas S.A., a leading bank in Europe.
The company is one of the leading broking house in India with presence since 2007 and also has international presence through its branch in UAE. The company is having sizeable presence in western and north-western parts of the country
Sharekhan’s main business activity includes share broking (primarily in the retail segment) and the distribution of mutual fund products. It also has a small presence in portfolio management services
The consolidated gearing of company remains comfortable with 1.17x as of FY22

Shriram Finance Limited(CRISIL AA+,IND AA+)(CRISIL Rationale Link)

Erstwhile 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 2,901 branch offices as an 31st Dec 2022

Tata Steel Ltd.(ICRA A1+,IND AA+)(ICRA 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.

TV 18 Broadcast Ltd.(CARE A1+)(CARE Rationale Link)

TV18 Broadcast Ltd (TV18) is a 51.17% subsidiary of Network18 which in turn is held primarily (73.15%) by Independent Media Trust (IMT) which is controlled by Reliance Industries Ltd (RIL)
On a standalone basis, TV18 operates six news channels in the general news and business news categories. It also operates 14 regional news channels across India.
TV18, through its 51% subsidiary, VMPL, operates GECs such as ‘Colors’, ‘Rishtey’, ‘Comedy Central’ (English), music channels, such as ‘MTV’ and ‘VH1’, entertainment channels for kids, such as ‘Sonic’, ‘Nick’ and ‘Nick Jr.’ VMPL also has presence in movie production and distribution business under Viacom18 Motion Pictures and an alliance with Paramount Pictures, the leading Hollywood studio, to market and distribute its films in the Indian sub-continent.
VMPL has also developed an in-house app called “VOOT” which is a digital platform for streaming all TV contents as well as digital-exclusive shows and movies.
VMPL also ventured into the sports segment in FY22 by acquiring TV and digital rights for some of the marquee sports properties globally and launched three sports channels under the umbrella brand, ‘Sports18
TV18 had 9MFY2023 revenues of ~Rs 4,500 crores, profitable operations and strong cash flow generation.
Capital structure of the company is strong with total debt/equity ratio of 0.36x in Dec’22.

U P Power Corporation Ltd(CRISIL A+ (CE) )(CRISIL 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 rated A+(CE) where coupon rate for bonds is 9.70% and 9.95%, 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 4,502 crs as on Sep 30, 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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