Magma FinCorp share price fell in trade today after ratings firm ICRA revised the ratings of its term loans and non-convertible debenture programme from stable to negative. Magma FinCorp share price fell up to 4.82% to Rs 53.35 compared to the previous close of Rs 56.05 on BSE. The small cap stock has fallen after three days of gain. Magma FinCorp share has lost 51.48% during the last one year and fallen 51.7% since the beginning of this year.
However, during last one month, the stock has gained 30%. The non-banking finance company said ICRA assigned negative to its term loans and non convertible debenture programme.
The credit rating firm has also affirmed the ratings of Magma Housing Finance Limited. It has assigned negative rating to term loans and non convertible debenture programme of the firm. Deterioration in the asset quality indicators following the reduced collection efficiencies in certain geographies and loan segments (commercial vehicles - CVs and construction equipment - CE) have led to revision in the outlook on group, the firm said.
High credit costs adversely affected the profitability metrics of the group. ICRA expects the group's profitability to remain subdued over the medium term. Moreover, ICRA expects the group to continue having relatively weaker asset quality indicators compared to the peer set.
Given the relatively moderate borrower credit profiles (first-time buyers, small entrepreneurs, self-employed and non-income proof category), the group's ability to profitably grow its business while improving the asset qualityirom the current levels and maintaining prudent capitaI isaiion would be a key rating sensitivity, the firm said.
By Aseem Thapliyal