Rating Rationale
November 16, 2022 | Mumbai
Deutsche Investments India Private Limited
Rating Reaffirmed
 
Rating Action
Rs.2200 Crore Commercial PaperCRISIL A1+ (Reaffirmed)
Note: None of the Directors on CRISIL Ratings Limited’s Board are members of rating committee and thus do not participate in discussion or assignment of any ratings. The Board of Directors also does not discuss any ratings at its meetings.
1 crore = 10 million
Refer to Annexure for Details of Instruments & Bank Facilities

Detailed Rationale

CRISIL Ratings has reaffirmed its 'CRISIL A1+' rating on the commercial paper programme of the Deutsche Investments India Private Limited (DIIPL).

 

The rating on DIIPL continues to centrally factor in CRISIL Rating’s expectation of strong support from Deutsche Bank AG (rated ‘A-/Stable/A-2’ by S&P Global Ratings (S&P)). It also reflects the strong capital position, evidenced by networth and gearing of Rs 918 crore and 1.2 times, respectively, as on June 30, 2022 (Rs 913 crore and 1.3 times, respectively, as on March 31, 2022). These rating strengths are partially offset by the modest scale of lending operations.

Analytical Approach

The rating on DIIPL is centrally based on S&P’s counterparty rating on Deutsche Bank AG. Deutsche Bank holds a 100% stake in DIIPL, through its subsidiaries, Deutsche Asia Pacific Holdings Pte Ltd and Deutsche India Holdings Pvt Ltd. CRISIL Ratings believes close operational linkages, the 100% ownership, and a shared name, imply a strong moral obligation on the Deutsche Bank group (Deutsche Bank and its subsidiaries) to continue supporting DIIPL.

Key Rating Drivers & Detailed Description

Strengths:

Strategic importance to, and expectation of strong support from, the Deutsche Bank group

The rating continues to be based on S&P Global’s long-term issuer credit rating of ‘A-/Stable/A-2’ assigned to Deutsche Bank AG. DIIPL is expected to remain strategically important to, and receive strong operational, managerial and financial support from its parent, Deutsche Bank AG.

 

Healthy capitalisation

The capital position of the company continues to remain strong with a networth of Rs 918 crore as on June 30, 2022 along with gearing of around 1.2 times, as against Rs 913 crore and 1.3 times as on March 31, 2022 (Rs 911 crore and 1.2 time as on March 31, 2021). Tier 1 and Total CAR were comfortable at 57.75% and 57.75% as on June 30, 2022. However, given the company’s exposure to capital markets which are market by inherent volatility, any weakening in asset quality, leading to erosion of networth, will be a key rating sensitivity factor.

 

Weakness:

Modest scale of operations

DIIPL had a gross loan book of Rs 1755 crore as on June 30, 2022, as against Rs 2051 crore as on March 31, 2022 and Rs 2165 crore as on March 31, 2021, mainly comprising loans against shares and mutual funds. The advances registered a degrowth of 5% in fiscal 2022 majorly on the account of volatility in the stock markets. The overall scale of operations remains modest in the overall finance market.

Liquidity: Strong

The asset-liability maturity profile is comfortable with no cumulative mismatches across all the buckets as on June 30, 2022. As on September, 2022 the company had debt repayment (commercial paper and ICDs) of Rs 825 crore maturing in the next six months (From October 2022 to March 2023). Against this, it had cash and cash equivalents of Rs 534.34 crore and unutilised bank lines of Rs 500 crore as on the same date. The unutilized bank lines are from its parent, Deutsche Bank India. Furthermore, CRISIL Ratings expects the company to receive need-based support from its parent, Deutsche Bank AG and its subsidiaries.

Rating Sensitivity Factors

Downward Factors:

  • Downward revision in the S&P Global rating of Deutsche Bank A.G. by 3 notches or higher
  • If there is a significant diminution in the stake held by, or the support expected from, Deutsche Bank A.G.

About the Company

DIIPL was established in May 2005, as a non-deposit-taking, non-banking financial company, registered with the Reserve Bank of India. The company had a networth of Rs 918 crore and debt of Rs 1145 crore as on June 30, 2022 (Rs 913 crore and 1156 crore, respectively, as on March 31, 2022).

 

For the quarter ending June 30, 2022, the company reported a profit after tax and total income of Rs 6.8 crore and Rs 38.4 crore, respectively. While For fiscal 2022, the company reported a profit of Rs 18.9 crore and a total income of Rs 161.5 crore, as against Rs 25.1 crore and Rs 134.2 crore for fiscal 2021.

Key Financial Indicators

 

Unit

Jun-22

Mar-22

Mar-21

Total Assets

Rs Cr

2072.5

2,381.2

2,380.0

Total Income

Rs Cr

38.4

161.5

134.2

Profit After Tax

Rs Cr

6.8

18.9

25.1

Gross NPA

%

0

0

0.55

Overall Capital Adequacy Ratio

%

57.75

45.04

43.49

Return on Assets

%

1.2*

0.8

1.2

*Annualised

Any other information: Not applicable

Note on complexity levels of the rated instrument:
CRISIL Ratings` complexity levels are assigned to various types of financial instruments and are included (where applicable) in the ‘Annexure – Details of Instrument’ in this Rating Rationale.

CRISIL Ratings will disclose complexity level for all securities – including those that are yet to be placed - based on available information. The complexity level for instruments may be updated, where required, in the rating rationale published subsequent to the issuance of the instrument when details on such features are available.

For more details on the CRISIL Ratings` complexity levels please visit www.crisil.com/complexity-levels. Users may also call the Customer Service Helpdesk with queries on specific instruments.

Annexure - Details of Instrument(s)

ISIN

Name of Instrument

Date of Allotment

Coupon
Rate (%)

Maturity Date

Issue
Size (Rs.Cr)

Complexity Level

Rating Assigned with Outlook

NA

Commercial Paper Programme

NA

NA

7-365 Days

2200

Simple

CRISIL A1+

Annexure - Rating History for last 3 Years
  Current 2022 (History) 2021  2020  2019  Start of 2019
Instrument Type Outstanding Amount Rating Date Rating Date Rating Date Rating Date Rating Rating
Commercial Paper ST 2200.0 CRISIL A1+   -- 17-11-21 CRISIL A1+ 04-05-20 CRISIL A1+ 27-06-19 CRISIL A1+ CRISIL A1+
      --   -- 08-03-21 CRISIL A1+ 07-01-20 CRISIL A1+   -- --
All amounts are in Rs.Cr.

  

Criteria Details
Links to related criteria
Rating Criteria for Finance Companies
Mapping global scale ratings onto CRISIL scale
CRISILs Criteria for rating short term debt
Criteria for Notching up Stand Alone Ratings of Companies based on Parent Support

Media Relations
Analytical Contacts
Customer Service Helpdesk

Aveek Datta
Media Relations
CRISIL Limited
M: +91 99204 93912
B: +91 22 3342 3000
AVEEK.DATTA@crisil.com

Prakruti Jani
Media Relations
CRISIL Limited
M: +91 98678 68976
B: +91 22 3342 3000
PRAKRUTI.JANI@crisil.com

Rutuja Gaikwad 
Media Relations
CRISIL Limited
B: +91 22 3342 3000
Rutuja.Gaikwad@ext-crisil.com


Krishnan Sitaraman
Senior Director and Deputy Chief Ratings Officer
CRISIL Ratings Limited
D:+91 22 3342 8070
krishnan.sitaraman@crisil.com


Ajit Velonie
Director
CRISIL Ratings Limited
D:+91 22 4097 8209
ajit.velonie@crisil.com


Shaunak Samirbhai Shah
Rating Analyst
CRISIL Ratings Limited
B:+91 22 3342 3000
Shaunak.Shah@crisil.com
Timings: 10.00 am to 7.00 pm
Toll free Number:1800 267 1301

For a copy of Rationales / Rating Reports:
CRISILratingdesk@crisil.com
 
For Analytical queries:
ratingsinvestordesk@crisil.com


 

Note for Media:
This rating rationale is transmitted to you for the sole purpose of dissemination through your newspaper/magazine/agency. The rating rationale may be used by you in full or in part without changing the meaning or context thereof but with due credit to CRISIL Ratings. However, CRISIL Ratings alone has the sole right of distribution (whether directly or indirectly) of its rationales for consideration or otherwise through any media including websites and portals.


About CRISIL Ratings Limited (A subsidiary of CRISIL Limited)

CRISIL Ratings pioneered the concept of credit rating in India in 1987. With a tradition of independence, analytical rigour and innovation, we set the standards in the credit rating business. We rate the entire range of debt instruments, such as bank loans, certificates of deposit, commercial paper, non-convertible/convertible/partially convertible bonds and debentures, perpetual bonds, bank hybrid capital instruments, asset-backed and mortgage-backed securities, partial guarantees and other structured debt instruments. We have rated over 33,000 large and mid-scale corporates and financial institutions. We have also instituted several innovations in India in the rating business, including ratings for municipal bonds, partially guaranteed instruments and infrastructure investment trusts (InvITs).
 
CRISIL Ratings Limited ('CRISIL Ratings') is a wholly-owned subsidiary of CRISIL Limited ('CRISIL'). CRISIL Ratings Limited is registered in India as a credit rating agency with the Securities and Exchange Board of India ("SEBI").
 
For more information, visit www.crisilratings.com 

 



About CRISIL Limited

CRISIL is a global analytical company providing ratings, research, and risk and policy advisory services. We are India's leading ratings agency. We are also the foremost provider of high-end research to the world's largest banks and leading corporations.

CRISIL is majority owned by S&P Global Inc, a leading provider of transparent and independent ratings, benchmarks, analytics and data to the capital and commodity markets worldwide.


For more information, visit www.crisil.com

Connect with us: TWITTER | LINKEDIN | YOUTUBE | FACEBOOK


CRISIL PRIVACY NOTICE
 
CRISIL respects your privacy. We may use your contact information, such as your name, address and email id to fulfil your request and service your account and to provide you with additional information from CRISIL. For further information on CRISIL’s privacy policy please visit www.crisil.com.



DISCLAIMER

This disclaimer is part of and applies to each credit rating report and/or credit rating rationale (‘report’) that is provided by CRISIL Ratings Limited (‘CRISIL Ratings’). To avoid doubt, the term ‘report’ includes the information, ratings and other content forming part of the report. The report is intended for the jurisdiction of India only. This report does not constitute an offer of services. Without limiting the generality of the foregoing, nothing in the report is to be construed as CRISIL Ratings providing or intending to provide any services in jurisdictions where CRISIL Ratings does not have the necessary licenses and/or registration to carry out its business activities referred to above. Access or use of this report does not create a client relationship between CRISIL Ratings and the user.

We are not aware that any user intends to rely on the report or of the manner in which a user intends to use the report. In preparing our report we have not taken into consideration the objectives or particular needs of any particular user. It is made abundantly clear that the report is not intended to and does not constitute an investment advice. The report is not an offer to sell or an offer to purchase or subscribe for any investment in any securities, instruments, facilities or solicitation of any kind to enter into any deal or transaction with the entity to which the report pertains. The report should not be the sole or primary basis for any investment decision within the meaning of any law or regulation (including the laws and regulations applicable in the US).

Ratings from CRISIL Ratings are statements of opinion as of the date they are expressed and not statements of fact or recommendations to purchase, hold or sell any securities/instruments or to make any investment decisions. Any opinions expressed here are in good faith, are subject to change without notice, and are only current as of the stated date of their issue. CRISIL Ratings assumes no obligation to update its opinions following publication in any form or format although CRISIL Ratings may disseminate its opinions and analysis. The rating contained in the report is not a substitute for the skill, judgment and experience of the user, its management, employees, advisors and/or clients when making investment or other business decisions. The recipients of the report should rely on their own judgment and take their own professional advice before acting on the report in any way. CRISIL Ratings or its associates may have other commercial transactions with the entity to which the report pertains.

Neither CRISIL Ratings nor its affiliates, third-party providers, as well as their directors, officers, shareholders, employees or agents (collectively, ‘CRISIL Ratings Parties’) guarantee the accuracy, completeness or adequacy of the report, and no CRISIL Ratings Party shall have any liability for any errors, omissions or interruptions therein, regardless of the cause, or for the results obtained from the use of any part of the report. EACH CRISIL RATINGS PARTY DISCLAIMS ANY AND ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING BUT NOT LIMITED TO ANY WARRANTIES OF MERCHANTABILITY, SUITABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE. In no event shall any CRISIL Ratings Party be liable to any party for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees or losses (including, without limitation, lost income or lost profits and opportunity costs) in connection with any use of any part of the report even if advised of the possibility of such damages.

CRISIL Ratings may receive compensation for its ratings and certain credit-related analyses, normally from issuers or underwriters of the instruments, facilities, securities or from obligors. Public ratings and analysis by CRISIL Ratings, as are required to be disclosed under the regulations of the Securities and Exchange Board of India (and other applicable regulations, if any), are made available on its website, www.crisilratings.com (free of charge). Reports with more detail and additional information may be available for subscription at a fee – more details about ratings by CRISIL Ratings are available here: www.crisilratings.com.

CRISIL Ratings and its affiliates do not act as a fiduciary. While CRISIL Ratings has obtained information from sources it believes to be reliable, CRISIL Ratings does not perform an audit and undertakes no duty of due diligence or independent verification of any information it receives and/or relies on in its reports. CRISIL Ratings has established policies and procedures to maintain the confidentiality of certain non-public information received in connection with each analytical process. CRISIL Ratings has in place a ratings code of conduct and policies for managing conflict of interest. For details please refer to:
https://www.crisil.com/en/home/our-businesses/ratings/regulatory-disclosures/highlighted-policies.html.

Rating criteria by CRISIL Ratings are generally available without charge to the public on the CRISIL Ratings public website, www.crisilratings.com. For latest rating information on any instrument of any company rated by CRISIL Ratings, you may contact the CRISIL Ratings desk at crisilratingdesk@crisil.com, or at (0091) 1800 267 1301.

This report should not be reproduced or redistributed to any other person or in any form without prior written consent from CRISIL Ratings.

All rights reserved @ CRISIL Ratings Limited. CRISIL Ratings is a wholly owned subsidiary of CRISIL Limited.

 

 

CRISIL Ratings uses the prefix ‘PP-MLD’ for the ratings of principal-protected market-linked debentures (PPMLD) with effect from November 1, 2011, to comply with the SEBI circular, "Guidelines for Issue and Listing of Structured Products/Market Linked Debentures". The revision in rating symbols for PPMLDs should not be construed as a change in the rating of the subject instrument. For details on CRISIL Ratings' use of 'PP-MLD' please refer to the notes to Rating scale for Debt Instruments and Structured Finance Instruments at the following link: https://www.crisil.com/en/home/our-businesses/ratings/credit-ratings-scale.html