CRISIL has enhanced the rated amount while retaining 'AA+/Stable/A1+' on the debt instruments of Gruh Finance (Gruh). The rated amount enhanced to Rs 35 billion from Rs 27 billion. The ratings continue to be underpinned by Gruh's healthy asset quality, strong earnings profile, and adequate capitalisation. These rating strengths are partially offset by Gruh's modest asset liability management (ALM) profile given its high dependence on short-term funds, modest overall market share, and geographical concentration.

CRISIL believes that HDFC will retain its majority shareholding in Gruh, and will continue to extend financial and management support to the company. Gruh is likely to maintain its healthy asset quality and adequate capitalisation over the medium term. The outlook may be revised to 'Positive' if Gruh significantly improves its market position or ALM profile, or considerably increases the degree of integration in operations with that of HDFC.

Conversely, the outlook may be revised to 'Negative' if there is significant deterioration in Gruh's asset quality, or a substantial decline in its earnings profile. A reduction in the extent of support from HDFC, or a change in CRISIL's view on HDFC may also result in the outlook being revised to 'Negative'.

Shares of the company gained Rs 2.2, or 0.92%, to trade at  Rs 241.  The total volume of shares traded  was  7,101 at the BSE (11.19 a.m., Wednesday).