VIS upgrades entity ratings of Maple Leaf Capital

February 06, 2025 (MLN): VIS Credit Rating Company Limited (VIS) has upgraded entity ratings of Maple Leaf Capital (MLCL) from ‘A-/A1’ to ‘A/A1’, the latest press release issued by VIS showed.

The medium-to-long-term rating of ‘A’ indicates good credit quality; protection factors are adequate.

Risk factors may vary with possible changes in the economy.

Short-term rating of ‘A1’ denotes Strong likelihood of timely repayments of short-term obligations with excellent liquidity factors.

Outlook on the assigned ratings remain ‘Stable’.

Previous rating action was announced on December 21, 2023.

MLCL, established in 2014, operates as a subsidiary of Kohinoor Textile Mills Limited (KTML), which holds 82.92% stake in the Company.

As part of the Kohinoor Maple Leaf Group, one of the top industrial conglomerates with a presence in various sectors such as cement, textiles, power, and capital markets, the Company plays a key role in managing the Group’s capital.

Its primary focus is to invest and trade in financial instruments and commodities.

The ratings upgrade reflects MLCL's strong sponsor profile and robust financial performance during the review period.

The company’s investment portfolio is composed of both long-term and short-term investments, with short-term portfolio representing over 90% of the total asset base.

The long-term portfolio is primarily focused on investment in various start-ups, particularly in the e-commerce and technology sectors.

While the short-term portfolio is invested in a diversified mix of listed equities across several sectors and scrips.

Overall, MLCL’s investment portfolio has demonstrated outstanding performance during FY24, with returns surpassing those of its peers.

This performance has led to improvements in the Company’s equity base, gearing ratio, and liquidity profile.

While the Company does leverage its operations through short-term borrowings with reducing proportion, the management's strategic investment approach has helped mitigate the associated risks.

However, going forward, the ratings will remain sensitive to utilization of short-term borrowings and stock market performance.

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