SBFC Finance Ltd

Rating Actions

• Bank loan facilities ₹10,000m assigned IND AA-/Positive.
• Bank loan facilities ₹50,000m affirmed; Outlook revised to Positive.
• Non-convertible debentures ₹5,000m affirmed; Outlook revised to Positive.

Rationale Highlights

• Expanding, diversified franchise with 256 branches across 18 states.
• Healthy internal accruals and diversified funding profile.
• Adequate capitalisation; tangible net worth ₹35.8b; leverage 2.5x.
• Granular secured portfolio (LAP/LAG) with disciplined underwriting.
• Asset quality stable; GNPA ~2.66-2.7%; seasoning to be established; governance monitorable.
• Liquidity adequate; ₹18.64b unencumbered liquidity vs ₹12.04b outflows; 3-month buffer.

Financial & Governance Metrics

• AUM ₹119.2b; leverage 2.5x; ROA ~4.4-4.5%; ROE ~14.8%.
• Senior management transitions noted; second line established; governance monitored.

Rating Sensitivities

• Positive: scale growth with stable asset quality and capital buffers.
• Negative: rising credit costs, liquidity gaps, leverage >4x sustained.

Material Changes

• Outlook revised to Positive; debt affirmed; new bank loan assigned.

Meeting Details

• Board meeting on 24 October 2026; time and venue not disclosed.

Key Agenda Items

• Consider and approve unaudited financial results for the quarter and half year ending 30 September 2026.

Other Notes

• Trading window closed for designated persons and immediate relatives from 1 October 2026 until 48 hours after results.

Rating Actions

• Long-term bank facilities reaffirmed at CARE AA-; outlook raised to Positive; size ₹6,000 crore.
• Commercial Paper reaffirmed at CARE A1+.
• Non-convertible debentures reaffirmed at CARE AA-; outlook Positive.

Instruments & Amounts

• Bank facilities: ₹6,000 crore total; previously ₹2,500 crore.
• Commercial Paper: ₹200 crore; rating CARE A1+.
• Non-Convertible Debentures: ₹400 crore; rating CARE AA-; outlook Positive.

Rationale & Outlook

• Rationale cites FY26 and Q1 FY27 performance; detailed strengths/weaknesses not provided.
• Outlook upgraded to Positive for bank facilities and NCD; CP outlook not specified.
• Material change: bank facilities size increased to ₹6,000 crore from ₹2,500 crore.

Action & instrument

• Ind-Ra affirms Series A1 securitised notes of Prime Trust SBL Aug 22.
• Rating: IND AA(SO)/Stable; Action: Affirmed; Issuance: 29 Aug 2022; Size: INR 376.25 mn.
• Outlook: Stable.

Rationale highlights

• Originator and servicer track record support rating; CE adequacy noted.
• External CE 15.55%, internal CE 36.99%, plus 21.76% junior CE as of Aug 2026.
• Liquidity: CE coverage >3x monthly obligations.

Concentration & risks

• Geographical concentration: top three states contribute ~61% of pool.
• Asset quality could worsen with regional downturn.

CE & liquidity specifics

• Total CE: external 15.55% plus internal; fixed-deposit lien provides security.
• Back-up servicer provision allows substitution.

Assumptions & performance

• Base-case gross default rate assumed at 7–8%.
• Recovery rate assumed at 70–80%.
• Monthly prepayment assumed at 1.0–1.5%.
• Cumulative prepayment observed: 42.47%.

Structural & operational

• WA seasoning: 59.85 months; pool amortisation 67.82%.
• Delinquency >90 days: 2.57% of original POS.
• Cumulative collection efficiency: 97.9%.

Material changes vs prior rating

• No material change; prior rating remains IND AA(SO)/Stable.

Originator metrics

• 9MFY26 tangible assets: INR 105.4B; debt/tangible equity: 2.1x.

Capital / Securities

• Board approves private placement of 10,000 secured NCDs aggregating Rs 100 crore.
• NCDs: face value Rs 100,000; maturity 18 Jun 2030; allotment 18 Sep 2026; BSE listing; coupon 8.00%.

ESG rating update

• Niche99 ESG Ratings assigned SBFC ESG rating of 75.00 with category Leader for FY 2025-26.
• The company did not engage Niche99; rating prepared from public data; received on 15 September 2026.
• Info available on SBFC investor site.

Allotment Details

• Total of 815,852 equity shares allotted to employees on 3 September 2026 under ESOP schemes.
• SBFC STOCK OPTION POLICY 2021 II allotted 44,750 shares.
• SBFC STOCK OPTION POLICY 2021 III Special Grant allotted 61,002 shares.
• SBFC STOCK OPTION POLICY 2023 I allotted 186,975 shares.
• SBFC STOCK OPTION POLICY 2023 II allotted 500,000 shares.
• SBFC STOCK OPTION POLICY 2023 III allotted 23,125 shares.
• Allotted shares rank pari-passu with existing shares.
• Total issued shares after allotment: 1,10,90,22,567; issued share capital: Rs 11,09,02,25,670.

ESG rating disclosure

• ESG rating of 68 for FY2025-26 assigned by NSE Sustainability Ratings and Analytics Limited.
• Company did not engage the provider; rating prepared from public-domain data.
• Rating report received on 02 September 2026.
• ESG rating information accessible on SBFC website.

Rating Action Details

• Converted provisional rating to final IND AA+(SO)/Stable.
• Instrument: Series A1 Securitised Notes; Size: INR 2,176.02 million.
• Maturity: 20 August 2040.
• Regulator: RBI.
• Rating Agency: India Ratings and Research Private Limited (Ind-Ra).
• Outlook: Stable.
• Final rating date: 25 August 2026.
• Trust: Horizon Trust LAP June 2026.

ESG rating disclosure

• SBFC Finance reports ESG rating of 76.7 for FY2025-26 by SES ESG Research, based on public data.
• Company did not engage SES ESG; rating prepared independently from public data.
• Rating received on 16 August 2026 and published on SBFC's investor site.