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|Secured NCD||Rs. 300 crore||CRISIL AA- (Stable)|
|Commercial Paper||Rs. 1500 crore
Rs. 1500 crore
|Bank Loan Ratings||Rs. 6000 crore||CRISIL AA- (Stable)|
|Tier II Bonds||Rs. 100 crore||CRISIL AA- (Stable)|
|Perpetual debt||Rs. 100 crore||CRISIL A+ (Stable)|
CRISIL has assigned a rating of CRISIL AA-/Stable on Rs 100 crore Tier II Bonds of TVS Credit Services Ltd (TVS Credit; part of the Chennai-based TVS Motor group). CRISIL has also reaffirmed its ratings on the other debt instruments and bank facilities at ‘CRISIL AA-/ CRISIL A+/Stable/CRISIL A1+’.
The ratings continue to factor in the high strategic importance of TVS Credit to TVS Motor Company Ltd (TVS Motor; the flagship company of TVS Motor group) as a key financing arm supporting the latter's vehicle sales. TVS Motor's credit risk profile continues to witness improvement supported by healthy volume growth across scooters and motorcycles; growth in these segments is expected to remain steady in fiscal 2019 as well. Further, TVS Motor’s operating profitability is also expected to gradually improve over the medium term, supported by reducing losses at its Indonesian subsidiary, higher sales of better margin yielding premium motorcycles, and further consolidation of its strong market position in the scooters segment; the company has also recently taken price hikes to offset the impact of rising input prices. Besides, improving cash generation will largely support phased capacity expansions, leading to lower reliance on debt and strengthening of credit metrics.
The ratings also factors in TVS Credit's increasing scale of operations and strong process orientation. These strengths are partially offset by average, though improving, earnings and exposure to risks related to the inherently weak credit risk profiles of borrowers.
The rating on the perpetual bonds also reflects the adequate buffer maintained by TVS Credit over the regulatory capital adequacy requirements, and high financial flexibility enjoyed on account of being a step-down subsidiary of TVS Motor. TVS Credit has maintained a cushion of 2-4% over the regulatory minimum capital ratio in the past few years and CRISIL believes that it will continue to maintain adequate cushion.
TVS Credit Services Limited (TVS Credit) is a part of $ 6.5 Billion TVS Group. TVS Credit was incorporated on November 5, 2008. The company is registered with the Reserve Bank of India as a Non-Deposit taking Non-Banking Finance company with effect from April 13, 2010. The Company based in Chennai is a captive finance company and a step-down subsidiary of TVS Motor Company Ltd. TVS Motor Services Ltd (holding Company of TVS Credit), which held 80.7% stake in the company as on March 31, 2018, while the remaining was held by TVS Motor Company Ltd (4.2%), HDFC Ltd (3.0%), Phi Research Pvt Ltd (2.1%), Phi Capital Services LLP (1.9%), Sundaram Clayton Ltd (1.3%) and Lucas TVS Ltd (6.8%). Mr. Venu Srinivasan is the Chairman of TVS Credit, and he is also the Chairman and Managing Director of TVS Motor Company Ltd. The company finances two-wheelers, new tractors, used tractors, and used cars. It caters largely to rural customers who have little or no access to bank financing. The company has points of presence in over 3000 locations and over 100 area offices throughout the country.
TVS Credit Services Limited's (TVS Credit) made loan disbursements of Rs. 4899 Crores during FY2018 and the assets under management stood at Rs. 6152 Crores as on March 31, 2018. For the fiscal year 2018, TVS Credit reported a net profit of Rs. 114 Crores on a total income of Rs. 1340 Crores, as against a net profit of Rs. 88 Crores on a total income of Rs. 1115 Crores for the previous fiscal. The net non-performing assets to advances as on March 31, 2018 stood at 1.15% as against 1.10% for the previous year.
The TVS Group is India’s leading supplier of automotive components and one of the country’s most respected business groups. With a combined turnover of more than over $ 6.5 Billion, the TVS Group employs a total workforce of close to over 39,000 employees. Charting a steady growth path of expansion and diversification, it currently comprises around over 50 companies. These operate in diverse fields that range from two-wheeler and automotive component manufacturing to automotive dealerships, finance and electronics. Uniting these multiple businesses is a common ethos of quality, customer service and social responsibility. TVS Motor Company, the flagship company of the 100 year old, TVS Group, is a leading two and three-wheeler manufacturer in India with state-of-the-art manufacturing facilities at Hosur in Tamilnadu, Mysore in Karnataka, Nalagarh in Himachal Pradesh and Karawang in Indonesia. TVS Motor Company is the third largest two-wheeler manufacturer in India, with revenue of 15129 Cr INR (2017-18). The company has an annual production capacity of 4 million 2 wheelers & 120,000 3 wheelers. It was the first Indian company to deploy a catalytic converter in a 100 cc motorcycle and to indigenously produce a four stroke 150 cc motorcycle. It is also the first Indian manufacturer to launch the country's first auto-clutch motorcycle and introduce ABS (Antilock Braking System) technology on a motorcycle in India.
TVS Credit performance has been showing consistent growth in disbursement and high collection efficiency. It is expected that the company will continue with its good performance further aided by diversification into financing of tractors and used cars. Going forward, the continued strong operational and financial support of the parent company TVS Motors Ltd., the ability of TVS Credit to withstand competition, improve profit margins and expand its scale of operations, maintain collection efficiency especially in the expanding tractor loan portfolio, and maintain good asset quality would be the key rating sensitivities.
Annual Report 2017-18
Annual Report 2016-17
Annual Report 2015-16
Annual Report 2014-15
Annual Report 2013-14
Annual Report 2012-13
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TVS Credit Services Limited
Jayalakshmi Estates, 29,
Haddows Road, Nungambakkam,
Chennai - 600006
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