Rating Rationale
June 18, 2018 | Mumbai
Viji Finance Limited
'CRISIL B+/Stable' assigned to bank debt
 
Rating Action
Total Bank Loan Facilities Rated Rs.5 Crore
Long Term Rating CRISIL B+/Stable (Assigned)
1 crore = 10 million
Refer to annexure for Details of Instruments & Bank Facilities
Detailed Rationale

CRISIL has assigned its 'CRISIL B+/Stable' rating to the long-term bank facility of Viji Finance Limited (Viji Finance).

The rating reflects the company's small scale of operations, regional concentration  and vulnerable asset quality. These weaknesses are partially offset by moderate capitalisation.

Analytical Approach

For arriving at the rating, CRISIL has considered the standalone business and financial risk profiles of Viji Finance.

Key Rating Drivers & Detailed Description
Weaknesses
* Small scale of operations with regional concentration
Viji Finance is small non-banking finance company (NBFC), provides working capital requirment loans to corporates. It had asset under management (AUM) of Rs.13 crore as on March 31, 2018. It has around 40 clients base as on March 31, 2018.

* Vulnerable asset quality
Loans are only extended to borrowers the promoter is familiar with. Lending is largely unsecured in nature, and is based on an assessment of borrowers' credit profiles. Furthermore, the top five loans account for about 45% of total portfolio. Gross non-performing assets (GNPA) was 5% as on March 31, 2018.

Strengths
* Moderate capital position
Networth was Rs 10.4 crore, and gearing was 0.3 time as on March 31, 2018. Equity infusion of around Rs 80 lakh in fiscal 2018 supports financial risk profile. Since the top 10 loans account for 85% of networth, capitalisation may be pressurised in case of any delinquency from large accounts.
Outlook: Stable

CRISIL believes Viji Finance's scale will remain modest, and asset quality vulnerable over the medium term. The outlook may be revised to 'Positive' if stable asset quality, and improvement in scale and capitalisation strengthen key credit metrics. The outlook may be revised to 'Negative' if significant deterioration in asset quality weakens financial risk profile.

About the Company

Based in Indore, Madhya Pradesh, Viji Finance was established as Panjon Finance Limited in 1994. It got its current name in September 2012. It is a non-banking financial company, promoted by Mr Vijay Kothari provides working capital loans to corporates. Most of the loans are unsecured in nature. Loans are only extended to borrowers the promoter is familiar with.

Viji Finance has two subsidiaries: S.L. Developers Pvt Ltd and Viji Housing Finance Ltd.

Key Financial Indicators
Particulars Unit 2018 2017
Total assets Rs Crore 13.9 12.1
Total income Rs Crore 2.3 1.6
Profit After Tax Rs Crore 1.4 0.6
Gross NPA % 5% Nil
Gearing % 0.3 0.3
Return on assets % 11% 5.5%

Any other information: Not applicable

Note on complexity levels of the rated instrument:
CRISIL complexity levels are assigned to various types of financial instruments. The CRISIL complexity levels are available on www.crisil.com/complexity-levels. Users are advised to refer to the CRISIL complexity levels for instruments that they consider for investment. 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)
Rating Outstanding
with Outlook
NA Proposed Long Term Bank Loan Facility NA NA NA 5 CRISIL B+/Stable
Annexure - Rating History for last 3 Years
  Current 2018 (History) 2017  2016  2015  Start of 2015
Instrument Type Outstanding Amount Rating Date Rating Date Rating Date Rating Date Rating Rating
Fund-based Bank Facilities  LT/ST  5.00  CRISIL B+/Stable    --    --    --    --  -- 
All amounts are in Rs.Cr.
Annexure - Details of various bank facilities
Current facilities Previous facilities
Facility Amount (Rs.Crore) Rating Facility Amount (Rs.Crore) Rating
Proposed Long Term Bank Loan Facility 5 CRISIL B+/Stable -- 0 --
Total 5 -- Total 0 --
Links to related criteria
CRISILs Bank Loan Ratings - process, scale and default recognition
Rating Criteria for Finance Companies

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