A DCR press release stated that the upgrade has taken into consideration healthy capitalisation, conservative credit underwriting policy, favourable asset liability profile and improved asset quality. Although the asset quality deteriorated in fiscal 1997 and 1998, it is now under control.

The release mentions that the net non-performing asset level was Rs 83.48 crore in fiscal 1997, which subsequently declined to Rs 33.88 crore in fiscal 1999 and is expected to be even lower at Rs 22 crore this year.

Unprovided NPA will be close to 4.9 per cent of the net worth.

The asset quality improved with net NPA decreasing to 3.19 per cent in 1999 from 5.51 per cent in fiscal 1997. It is expected to be around 2 per cent in the fiscal 2000.

During the period to September 30, 1999, the debt-equity ratio of the company stood at 2.13 with interest coverage at 1.45, the release stated. The capital adequacy ratio was 25.11 per cent. After the recent Rs 91.2 crore rights issue, the net worth is expected to exceed Rs 440 crore, with Rs 15.72 crore in cash and bank in addition to an unutilised bank limit of over Rs 80 crore.

According to DCR, for the nine-month period to December 1999, total income declined by 8.9 per cent and interest expenses by 16.7 per cent to Rs 58.59 crore.