| Nissan Renault Financial Services India Private Limited | ||
| Rating downgraded to 'Crisil A2+' | ||
| Rating Action | ||
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| 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 downgraded its rating on the commercial paper programme of Nissan Renault Financial Services India Pvt Ltd (NRFSI) to ‘Crisil A2+’ from ‘Crisil A1’.
The downgrade follows rating action by S&P Global Ratings [S&P] on NRFSI’s parent company, Nissan Motor Company Ltd (NMCL). On November 14, 2025, S&P had downgraded its long-term issuer credit rating on NMCL from ‘BB/Negative’ to ‘BB-/Negative’ while reaffirming its short-term issuer credit rating at ‘B’.
The rating continues to factor in the strategic importance of NRFSI to its ultimate parent, NMCL and its strong moral obligation to support the Indian subsidiary, both on an ongoing basis and in the event of distress. The expectation of support is based on NMCL’s majority ownership in NRFSI, the shared brand and strong operational linkages. The ratings also continue to factor in comfortable capitalisation. These strengths are partially offset by small scale of operations and modest profitability. |
Analytical Approach To arrive at the rating, Crisil Ratings has considered standalone credit risk profile of NRFSI and has factored in the support that NRFSI is expected to receive from its ultimate parent, NMCL, on an ongoing basis, and in case of exigencies |
Key Rating Drivers - Strengths Strategic importance to, and expectation of strong support from, ultimate parent, NMCL NRFSI is a joint venture between Nissan International Holdings B.V (a wholly owned subsidiary of NMCL) and RCI Banque (a wholly owned subsidiary of Renault S.A. [Renault]). NMC and Renault also have an alliance at the global level. NMCL ultimately holds 70%, and Renault holds the remaining 30% in NRFSI. NMCL and Renault have infused equity capital of Rs 497 crore and Rs 213 crore, respectively, since inception in NRFSI and they are expected to infuse further capital to support growth plans of the company, as and when required.
NMCL, being the majority shareholder, oversees the operations and is involved in strategic decision making. As the captive financier of Nissan and Renault vehicles in India, NRFSI receives financial, operational and managerial support from NMCL. It plays a strategic role in strengthening the market share of both the principals and their sales in India. NMCL views India as a key market, as reflected in its presence across manufacturing, sales and marketing and financing of vehicles in the country.
Risk management policies, systems and processes of NRFSI are in line with those globally approved by NMCL. NRFSI also benefits from global linkages of NMCL with foreign banks operating in India. Nissan group companies have also invested in NRFSI long term funds (group loans). Crisil Ratings believes that the majority ownership, shared brand, and strong operational integration lead to a high moral obligation on NMCL to support NRFSI.
Comfortable capitalisation Capitalisation remains comfortable, with networth of Rs 1,220 crore as on September 30, 2025 (Rs 1,218 as on March 31, 2025). Company also has healthy capital adequacy ratio of 38.28% as on September 30, 2025.
The shareholders have infused Rs 710 crore so far and are likely to further infuse capital to support growth plans, as and when required. Gearing also stood comfortable at 1.4 times as on September 30, 2025 (1.7 times as on March 31, 2025) and may increase over the medium term, as the portfolio grows, albeit expected to stay under 4 times, on a steady-state basis. |
Key Rating Drivers - Weaknesses Relatively small player in the overall finance market NRFSI offers vehicle loans, mainly to self-employed customers under its retail portfolio, and also provides funding to dealers. It remains a relatively small player in the overall vehicle finance segment, despite having commenced operations in October 2014. The gross loan portfolio was ~Rs 3,043 crore as on September 30, 2025 (Rs 3,347 crore as on March 31, 2025). Over 90% of the portfolio comprises new car financing and the balance constituted dealer financing, personal loans to group employees and used car loans. Besides, being a captive financing arm for the parent, the company also faces competition from banks, which restricts its market position.
Modest profitability The earning profile remains modest with profit after tax (PAT) of Rs 23.4 crore for the first six months of fiscal 2026, as against Rs 53.2 crore in fiscal 2025. Credit cost and net interest margin stood largely range-bound at 1% and 4.5% respectively in the first six months of fiscal 2026 (annualised), from 0.9% and 4.4% respectively, during fiscal 2025. Consequently, return on assets (RoA) stood at 1.5% (annualised) in the first six months of fiscal 2026, same as that infiscal 2025. The ability to continue to control credit cost and improve profitability remain a key monitorable. |
Liquidity Strong Liquidity remains strong, driven by expectation of continued support from NMCL, both on an ongoing basis and in case of any exigencies. On a standalone basis, as on october 31, 2025, NRFSI had cumulative positive mismatches across all buckets upto 5 years as per the Asset liability mismatch (ALM) profile. As on October 31, 2025, the company had unencumbered cash and cash equivalents of Rs 26.5 crore and unutilised cash credit/ working capital demand loan and bank limit of Rs 1,506.3 crore, as against cash outflow of Rs 106.8 crore for the next two months. |
Rating sensitivity factors
Downward factors
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About the Company NRFSI was incorporated as a joint venture between Nissan International Holdings B.V, and RCI Banque S.A in October 2013. The company received the license to operate as a non-banking finance company from the Reserve Bank of India in July 2014. It finances Nissan and Renault - branded vehicles in India, by extending retail credit, dealer financing, insurance and other services. NMCL, headquartered in Japan, is a leading international automaker, present in over 160 countries. |
Key Financial Indicators
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Any other information: Not applicable |
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Annexure - Details of Instrument(s)
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Criteria Details
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