Leading credit rating agency CRISIL has upgraded its credit rating of Manappuram Finance to 'AA-/Stable' from 'A+/Stable'.

The revised rating is applicable to the long-term bank facility and non-convertible debentures of the company. The new ratings reflect the strong track record of Manappuram Finance's promoters in financing against gold jewellery, adequate capitalisation and stable funding profile, and strong profitability. The upgrade reflects improvement in business risk profile driven by changed business model, and stable operating environment backed by an established regulatory regime. 

The rating upgrade also factors in the company's strong earnings profile. It may be recalled that the company had revised its business model in June 2014 by introducing short-term products with 3, 6, and 9 months' tenure and increasing focus on, monthly interest collection and getting new clients. Short-tenure products (over 80% of portfolio comprises products with 3 months' tenure) reduce risk of interest reversals on delinquent loans. The rating on short-term debt of the company was reaffirmed at 'A1+'.

Shares of the company gained Rs 3.05, or 4.42%, to settle  at  Rs 72.00.  The total volume of shares traded  was  1,432,258 at  the BSE (Friday).