CRISIL "AAA" for Citicorp Maruti Finance's Rs500-million NCD Issue
28 Mar 2006
Citigroup Inc. owns the company through Citicorp Finance India Limited (Citicorp Finance, rated 'AAA / Stable / P1+' by CRISIL). This majority ownership, and the management, branding, funding, and systems support provided by Citigroup Inc., enable Citicorp Maruti to enjoy strong asset quality, good resource profile and reasonable financial flexibility.
The company's standalone risk profile is, however, constrained by its low profitability, which is owing to declining disbursements, depressed interest spreads and high expense levels. Moreover, compared with other finance companies that have a more diversified portfolio, Citicorp Maruti's business is concentrated as it only finances cars produced by Maruti Udyog Ltd (Maruti).
Outlook: CRISIL expects Citicorp Maruti to continue to benefit from the management, branding, ownership, and funding support provided by Citigroup Inc., its ultimate parent. CRISIL expects Citicorp Maruti to maintain its strong asset quality in the medium term. However, the company's success in improving its market position and profitability, given the intense competition in the car-financing segment, will influence its standalone credit risk profile.
About the company: Citicorp Maruti was promoted in October 1997 by Citibank Overseas Investment Corporation, USA, as a joint venture between Citicorp Finance India Limited and Maruti Udyog Limited (Maruti), to finance vehicles manufactured by Maruti. Citicorp Finance has a 74 per cent stake in the company, and Maruti holds the remaining 26 per cent stake. Citigroup Inc., a leading global financial services conglomerate, ultimately owns Citicorp Finance. Maruti is a joint venture between the Government of India and Suzuki Motor Company, Japan, and is India's largest car manufacturer.
Citicorp Maruti is a medium-sized player in the car-financing market with total funds deployed of Rs.7.6 billion as on March 31, 2005. Citicorp Maruti reported a total income and net loss of Rs. 581.2 million and Rs.22.9 million, respectively, for the nine months ended December 31, 2005, as compared to a total income and profit after tax (PAT) of Rs. 951.8 million and Rs. 17.6 million, respectively, for 2004-05.
| Rs. 500 Million Non-Convertible Debenture Issue | AAA/Stable (Assigned) |
| Rs. 500 Million Non-Convertible Debenture Issue | AAA/Stable (Rating Withdrawn) |
| Rs. 500 Million Non-Convertible Debenture Issue | AAA/Stable (Reaffirmed) |
| Rs. 500 Million Non-Convertible Debenture Issue | AAA/Stable (Reaffirmed) |
| Rs. 880 Million Non-Convertible Debenture Issue | AAA/Stable (Reaffirmed) |
| Rs. 700 Million Non-Convertible Debenture Issue | AAA/Stable (Reaffirmed) |
| Rs. 500 Million Non-Convertible Debenture Issue | AAA/Stable (Reaffirmed) |
| Rs. 350 Million Non-Convertible Debenture Issue | AAA/Stable (Reaffirmed) |
| Rs. 500 Million Non-Convertible Debenture Issue | AAA/Stable (Reaffirmed) |
| Rs. 500 Million Non-Convertible Debenture Issue | AAA/Stable (Reaffirmed) |
| Rs. 300 Million Non-Convertible Debenture Issue | AAA/Stable (Reaffirmed) |
| Rs. 2.25 Billion Short-Term Debt Programme | P1+ (Reaffirmed) |
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