Akme Fintrade (India) Limited — Credit Ratings, 28-01-2025: Credit Rating- New

Akme Fintrade (India) Limited (AFIL) has reaffirmed its long-term credit ratings of IVR BBB+ with a stable outlook for its existing bank facilities and newly proposed non-convertible debentures (NCDs). The reaffirmation reflects AFIL's healthy earnings profile, consistent growth in assets under management (AUM), and comfortable capitalization levels, bolstered by recent equity infusions.

AFIL’s net interest income increased approximately 17% year-on-year to ₹41.37 crore, driven by growth in its loan portfolio. The company reported a net profit of ₹18.53 crore in FY2024, up from ₹14.52 crore in FY2023, with a corresponding rise in EPS. The return on total assets improved to 4.58%, indicating solid profitability metrics.

AUM rose by 14% year-on-year to ₹425.65 crore, benefiting from demand in the LAP/SME segment. The company maintains a strong capitalization with a CRAR of 70.38%, indicating robust financial health. However, average asset quality remains a concern, with GNPA at 3.13% and NNPA at 1.47%, primarily driven by vehicle loan delinquencies.

Looking ahead, AFIL aims for expansion through IPO-led capital infusion and sustained AUM growth. Investor sentiment remains cautiously optimistic, considering potential growth opportunities tempered by competition and regulatory risks. The overall outlook suggests a hold stance, given the company's solid fundamentals amid economic headwinds.