InCred Financial Services Limited (InCred Finance), a prominent non-banking financial company (NBFC) in India, has recently achieved a significant milestone with CRISIL upgrading its long-term rating to ‘CRISIL AA-/Stable‘ from the previous ‘CRISIL A+/Stable’. This upgrade serves as a testament to InCred’s commitment to asset quality, operational efficiency, and a diversified loan portfolio and liabilities franchise.
InCred Finance’s journey to this higher rating has been marked by several key factors. The company’s strong capitalization, supported by a high-quality investor base, has played a crucial role in this achievement. Additionally, InCred’s consistent focus on improving its earnings profile and the presence of an experienced leadership team have been instrumental in securing this upgrade.
The company’s financial performance has been impressive, with its net worth increasing to Rs. 3,218 crore as of December 31, 2023, from Rs. 2,484 crore as of March 31, 2023. This growth in net worth was further bolstered by a Rs. 500 crore equity capital raise in December 2023, along with profit accretion during the period.
In terms of profitability, InCred Finance has witnessed a significant jump, with a 132% year-on-year increase in profit before tax (PBT) for the 9-month period ending December 31, 2023, amounting to Rs. 298 crore. The company’s loan book also saw substantial growth, reaching Rs. 8,013 crore as of December 31, 2023, representing an annualized growth rate of 43% over the previous year.
InCred Finance has been able to achieve such impressive results by focusing on building robust moats around its businesses. This includes implementing best-in-class underwriting and risk analytics engines, leveraging a scalable tech delivery platform, and establishing an extensive customer support and collections infrastructure.
Despite its rapid growth, InCred Finance has maintained steady credit costs and seen a healthy decline in its Cost-to-Income ratio, from 56% to 44%. This reflects the company’s commitment to operational efficiency and sustainable growth.
Commenting on the rating upgrade, Bhupinder Singh, Founder & Group CEO of InCred, stated, “The rating upgrade is a significant endorsement of our ‘risk-first’ approach. Our focus on innovation in product and technology, coupled with robust risk analytics and a talented team, has been instrumental in our growth journey. In a dynamic and competitive market like India, it is gratifying to see InCred Finance establish a strong foothold in consumer and MSME lending.”
In conclusion, CRISIL’s rating upgrade of InCred Finance to ‘CRISIL AA-/Stable’ is a reflection of the company’s strong performance, robust operations, and its commitment to excellence. This achievement not only validates InCred’s strategic approach but also positions the company as a key player in India’s NBFC sector.
