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Muthoot and Shriram Finance Upgraded to BB+ by S&P
March 19, 2025
Indian non-banking financial companies (NBFCs) like Muthoot and Shriram Finance were upgraded by a notch to BB+ from BB by S&P. The upgrades reflect improved regulatory oversight of large NBFCs in India, particularly those classified as “upper-layer” institutions under the Reserve Bank of India’s (RBI) scale-based regulations. Introduced in 2022, these regulations impose stricter capital requirements, provisioning norms, and disclosure obligations, making upper-layer NBFCs more stable and resilient. As per S&P, Muthoot is expected to maintain a strong market position in the gold loan market, due to its brand recognition despite growing competition. While banks are increasingly active in this segment, they note that Muthoot’s experience gives it a competitive edge. Regarding Shriram Finance, S&P expects them to retain their leadership in the used-commercial vehicle financing market, supported by strong borrower relationships, market expertise, and extensive rural reach. Additionally, S&P believes that India’s economic growth should support asset Shriram Finance’s asset quality.
Dollar bonds of both Muthoot and Shriram Finance traded stable. For instance Muthoot’s 6.375% 2029s traded at 99.85, yielding 6.42% while Shriram’s 6.625% 2027s were at 101, yielding 6.08%.
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