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  • 1 CARE Ratings Limited

    Press Release

    Khush Housing Finance Pvt. Ltd.

    September 22, 2017 Ratings

    Instrument Amount

    (Rs. crore) Rating

    1 Rating Action

    Proposed Non-Convertible Debenture issue

    40 (Rs. Forty crore only)

    CARE BBB-; Stable (Triple B Minus; Outlook: Stable)


    Details of instruments/facilities in Annexure-1 . Detailed Rationale & Key Rating Drivers The rating factors in experienced management team, comfortable capital adequacy and low gearing levels of the company. The ratings are, however, constrained by low profitability and small scale of operations owing to the initial years of business, limited track record, geographical concentration and low portfolio seasoning. Business growth, profitability, asset quality and capital adequacy are the key rating sensitivities. Detailed description of the key rating drivers Key Rating Strengths

    Experienced Management: Mr. Amit Magia is the promoter, MD and CEO of the company. He is a qualified chartered accountant having experience in corporate finance and fund raising. Mr. Milind Gowardhan is the executive director and president of the company. He has more than two decades of experience across a wide spectrum of loan products. Mr. Shekhar Ghotgalkar (more than 30 years of experience in lending) and Mr. V. Srinivasan (more than 20 years of experience in corporate finance) are the other executive directors of the company. Comfortable capital adequacy and gearing levels: Considering the initial states of operations, the company has comfortable capitalization levels and reported Capital Adequacy Ratio (CAR) of 115.45% (Entirely Tier I) as on March 31, 2017. The company had a tangible net worth of Rs.49 crore and has drawn borrowings during Q1FY18 (refers to period from April 01 to June 30) and had total debt of Rs.80 crore as on June 30, 2017, resulting in overall gearing of 1.63 times. Key Rating Weaknesses Small size of operations with limited track record of the company: The company received NHB license for HFC in the month of September 2015. Post NHB license, the company focused on building core leadership team, loan management system, software, processes and policies. Active operations commenced from February 2016. The Company has positioned itself as a player in the Pradhan Mantri Awaas Yojana (PMAY) Credit Linked Subsidy Scheme (CLSS) focusing on Economically Weaker Segment and Low Income Group customers. The PMAY CLSS penetration stands at about 35-40%.The companys outstanding portfolio as on June 30, 2017, stood at Rs.102.08 crore with PMAY-CLSS penetration in the range of 35 -40%. The company, therefore, exhibits a limited track record and small size of operations.

    Low profitability due to nascent stage of operations: The company reached break even during FY17 and reported Profit After Tax (PAT) of Rs.0.21 crore on total income of Rs.6.68 crore as compared to loss of Rs.1.27 crore on total income of Rs.0.80 crore during FY16. During Q1FY18 (unaudited), the company reported PAT of Rs.0.05 crore on total income of Rs.4.66 crore.

    High geographical concentration: The company faces high geographical concentration risk on account of its majority of loan exposure in the Maharashtra region. Around 90.84% of the outstanding portfolio as on June 30, 2017 is concentrated in Maharashtra region with rest 9.16% from Gujarat region. The company has taken steps to build capacity by reaching out to Gujarat and Rajasthan and has recruited professionals with track record to diversify business in these states. . The company expects a larger share of business coming from Rajasthan and Gujarat going forward which will provide some comfort on geographical concentration front.

    Low portfolio seasoning: Owing to recent start of operations of the company, companys portfolio is unseasoned. Large part of the portfolio is less than a year old.

    1Complete definition of the ratings assigned are available at and other CARE publications

  • 2 CARE Ratings Limited

    Press Release

    Analytical approach: Standalone Applicable Criteria Criteria on assigning Outlook to Credit Ratings CARE Policy on Default Recognition CAREs criteria for Housing Finance Companies Financial ratios - Financial Sector About the Company Khush Housing Finance Private Limited (KHFL) (erstwhile Omkhush Spaces Private Limited) was incorporated on August 25, 2011. For the initial period of around 4 years there was virtually no business activity in the company in the absence of a firm business plan. The company registered with National Housing Bank (NHB) as a housing finance company on September 18, 2015. The main focus of the company is to provide long term home loans to low income customer segment. The company is also active in providing loans to economically weaker section of the society which fall under credit linked subsidy scheme (CLSS). As on June 30, 2017, the companys outstanding portfolio stood at Rs.102.08 crore. Home loans formed 77.69% of the outstanding portfolio while LAP formed 22.31% of the outstanding portfolio as on June 30, 2017. Average ticket size under home loans and LAP stood at around Rs.10.75 lakhs and Rs.12.26 Lakhs, respectively. The Company has presence across various regions of Maharashtra, and is aggressively planning to penetrate deeper in Gujarat (South Gujarat and Ahmedabad) and Rajasthan (Jaipur / Ajmer / Kota) apart from adding more locations in Maharashtra.. The company operates through 12 branches/centres as on June 30, 2017. KHFL is managed by Mr. Amit Magia (Promoter, MD and CEO); a qualified chartered accountant and Harvard Business School alumni having diverse experience in the field of finance.

    Brief Financials (Rs. crore) FY16 (A) FY17 (A)

    Total income 0.80 6.68

    PAT (1.27) 0.21

    Interest coverage (times) (4.06) 1.81

    Total Assets 11.98 80.98

    Net NPA (%) NIL NIL

    ROTA (%) (18.42) 0.91

    A: Audited

    Status of non-cooperation with previous CRA: Not Applicable Any other information: Not Applicable Rating History for last three years: Please refer Annexure-2

    Note on complexity levels of the rated instrument: CARE has classified instruments rated by it on the basis of complexity. This classification is available at Investors/market intermediaries/regulators or others are welcome to write to for any clarifications.

    Analyst Contact:

    Name: Aditya Acharekar Tel: 022-6754 3528 Mobile: + 91-9819013971 Email:

    **For detailed Rationale Report and subscription information, please contact us at

    About CARE Ratings:

    CARE Ratings commenced operations in April 1993 and over two decades, it has established itself as one of the leading credit rating agencies in India. CARE is registered with the Securities and Exchange Board of India (SEBI) and also recognized as an External Credit Assessment Institution (ECAI) by the Reserve Bank of India (RBI). CARE Ratings is proud of its rightful place in the Indian capital market built around investor confidence. CARE Ratings provides the entire spectrum of credit rating that helps the corporates to raise capital for their various requirements and assists the investors to form an informed investment decision based on the credit risk and their own

  • 3 CARE Ratings Limited

    Press Release

    risk-return expectations. Our rating and grading service offerings leverage our domain and analytical expertise backed by the methodologies congruent with the international best practices.


    CAREs ratings are opinions on credit quality and are not recommendations to sanction, renew, disburse or recall the concerned bank facilities or to buy, sell or hold any security. CARE has based its ratings/outlooks on information obtained from sources believed by it to be accurate and reliable. CARE does not, however, guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. Most entities whose bank facilities/instruments are rated by CARE have paid a credit rating fee, based on the amount and type of bank facilities/instruments.

    In case of partnership/proprietary concerns, the rating /outlook assigned by CARE is based on the capital deployed by the partners/proprietor and the financial strength of the firm at present. The rating/outlook may undergo change in case of withdrawal of capital or the unsecured loans brought in by the partners/proprietor in addition to the financial performance and other relevant factors.

    Annexure-1: Details of Instruments/Facilities

    Name of the Instrument

    Date of Issuance

    Coupon Rate

    Maturity Date

    Size of the Issue (Rs. crore)

    Rating assigned along with Rating


    Debentures-Non Convertible Debentures

    - - - 40.00 CARE BBB-; Stable

    Annexure-2: Rating History of last three years

    Sr. No.

    Name of the Instrument/Bank


    Current Ratings Rating history


    Amount Outstanding (Rs. crore)


    Date(s) & Rating(s)

    assigned in 2017-2018

    Date(s) & Rating(s)

    assigned in 2016-


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