First Cap­i­tal’s ‘A-’ rat­ing reaf­firmed by ICRA Lanka

Daily Mirror (Sri Lanka) - - FINANCE -

The is­suer rat­ing of SL[A] with sta­ble out­look was reaf­firmed for First Cap­i­tal Hold­ings PLC (First Cap­i­tal) by ICRA Lanka Ltd, a sub­sidiary of ICRA Ltd, a group com­pany of Moody’s In­vestors Ser­vice.

ICRA Lanka also reaf­firmed the is­suer rat­ing [SL]A- with sta­ble out­look for First Cap­i­tal’s stand­alone pri­mary dealer First Cap­i­tal Trea­suries PLC.

First Cap­i­tal Hold­ings PLC is also the hold­ing com­pany for other en­ti­ties in the fi­nan­cial ser­vices space, en­gaged in mak­ing in­vest­ments and manag­ing its sub­sidiaries, i.e. First Cap­i­tal Trea­suries PLC an au­tho­rised pri­mary dealer in govern­ment se­cu­ri­ties, First Cap­i­tal Lim­ited in­volved in struc­tur­ing and place­ment of cor­po­rate debt and cor­po­rate fi­nance ad­vi­sory ser­vices and in­vest­ments, First Cap­i­tal As­set Man­age­ment Ltd. in­volved in unit trust and port­fo­lio man­age­ment; First Cap­i­tal Mar­kets Ltd in­volved in pro­vid­ing mar­gin trad­ing fa­cil­i­ties and deal­ing and broking of listed debts, First Cap­i­tal Trustee Ser­vices Ltd a trustee ser­vices provider for cor­po­rate debt se­cu­ri­ties and First Cap­i­tal Eq­ui­ties Ltd en­gaged in stock broking ac­tiv­i­ties. How­ever, First Cap­i­tal Trea­suries ac­counts for 70 per­cent of the con­sol­i­dated as­sets and 80 per­cent of the con­sol­i­dated net trad­ing in­come of First Cap­i­tal for FY2017. The rat­ings take note of First Cap­i­tal’s efforts to ex­pand the busi­ness and fi­nan­cial per­for­mances of the other sub­sidiaries, which are en­gaged in cor­po­rate debt struc­tur­ing, cor­po­rate fi­nance, as­set man­age­ment, stock broking, ex­tend­ing mar­gin trad­ing fa­cil­i­ties and trustee ser­vices; how­ever their scale of op­er­a­tions con­tin­ues to re­main mod­er­ate. First Cap­i­tal’s bor­row­ings are largely short term in na­ture and are used for in­vest­ment and lend­ing to group en­ti­ties. The rat­ing fac­tors the First Cap­i­tal group’s es­tab­lished re­la­tion­ships with banks and fi­nan­cial in­sti­tu­tions, pro­vid­ing ac­cess to fund­ing. Fur­ther, ICRA Lanka ex­pects timely fund­ing sup­port from First Cap­i­tal Trea­suries, con­sid­er­ing the liq­uid na­ture of its as­sets.

First Cap­i­tal, be­ing a hold­ing com­pany de­rives its in­come from the div­i­dends from the group en­ti­ties and in­come from its in­vest­ments, which in­cludes in­ter­est in­come and profit from in­vest­ments. For the FY2017 stand­alone in­come from in­vest­ment ac­tiv­i­ties im­proved (Rs.774 mil­lion total in­come in FY2017 vis-avis Rs.336 mil­lion in FY2016), while the share of profit from sub­sidiaries in­creased steeply (Rs.194 mil­lion in FY2017 vis-avis Rs.14 mil­lion in FY2016).

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