CRA assigns credit rating of [ICRA] BBB-(Stable) to the NCD programme and bank facilities of NeoGrowth. The ratings factor in the track record of NeoGrowth’s promoters in the credit card payment processing segment, experience of the management team in the financial services industry, good investor profile and efficient internal controls and risk management systems of the company. The lower tenure of loans, daily repayment structure of these loans provide comfort against the unsecured nature of the portfolio and judicious use of technology and data analytics partly mitigate risks associated with unsecured lending business model.
About ICRA Limited:
ICRA is one of the most experienced Credit Rating Agencies in the country today. ICRA rates rupee-denominated debt instruments issued by manufacturing companies, commercial banks, non-banking finance companies, financial institutions, public sector undertakings and municipalities, among others.
ICRA Limited (formerly Investment Information and Credit Rating Agency of India Limited)
NeoGrowth gets a Credit Rating by ICRA
ICRA has assigned [ICRA] BBB – rating with a stable outlook to the Rs.50 crores of Non-Convertible Debenture Programme and Rs.120 crores long term bank facilities of NeoGrowth Credit Private Limited. The outlook on the ratings is stable. It’s an investment grade ranking with a moderate degree of safety regarding timely serving of financial obligations.
Commenting on the ratings, Mr. Dhruv Khaitan, Chairman of NeoGrowth said, “Being relatively new in the lending business with an unconventional business model, we are delighted with the Investment Grade rating, [ICRA] BBB- (stable), given to our debt instruments by ICRA. We will build upon this foundation as we continue on our journey to leverage optimum levels of debt and provide value to our customers, lenders, investors and all other stakeholders.”
NeoGrowth started its operations in FY 2013, and provides finance to small and medium sized retailers, who have a good amount of sales volume through credit/debit card transactions, for their working capital needs.The company lends to these retailers against future credit card and debit card sales. Repayment of these loans occurs on a daily basis as a certain fixed percentage of daily sales. NeoGrowth currently operates out of 8 branches. ICRA takes comfort from the well-designed internal controls and risk management system due to robust technological platform of the company. The company undertakes daily monitoring of portfolio through its internal system which enables it to start early follow-up and recovery action in case of any delinquencies.