MONEY MATTERS FINANCIAL SERVICES LIMITED
Long Term Bank Facilities
Rating
CARE has assigned ‘CARE BBB – [Triple B Minus]’
rating to the bank facilities of MMFSL. This rating is
applicable to facilities having tenure of more than one
year. Instruments with this rating are considered to offer
moderate safety for timely servicing of debt obligations.
Such instruments carry moderate credit risk. The rating
mainly takes into account MMFSL’s comfortable
profitability parameters as well as its comfortable capital
adequacy levels. However, the rating is constrained by
the relatively limited track record of operations, high
dependence on key managerial personnel for business
opportunities, the recent departure of key management
executives associated with the debt syndication division
being the core business activity of MMFSL, susceptibility
to volatilities in income profile on account of high
dependence on fee based income and high
concentration risk from top clients. The rating also takes
into consideration the steps taken by the company to
alleviate the impact of the departure of the key personnel
by putting together a new business team as well as
broad-basing of the Board by induction of some
prominent names from Indian Financial Services Sector.
Background
MMFSL was originally incorporated as “Daiwa Securities
Limited” in November 1994. The Company’s name was
changed to Dover Securities Limited on May 19, 1999.
In April 2007, Mr. Rajesh Sharma and Money Matters
(India) Private Limited (promoter group company) took
over Dover Securities Ltd. Subsequently, the name of
the Company was changed to Money Matters Financial
Services Ltd in October 2008.
Money Matters Financial Services Ltd (MMFSL) is a BSE
Listed non deposit taking NBFC primarily focused in the
business of financial advisory services (debt
syndication) and trading in debt securities. It is also the
holding company for Merchant Banking & Broking
Businesses housed in its subsidiaries. The company
became a systemically important non deposit taking
NBFC w.e.f from March 31, 2009.
CREDIT ANALYSIS & RESEARCH LIMITED
CARE BBB-
Management
The management team of MMFSL is headed by Mr.
Rajesh Sharma, Chairman and Managing Director. He
is the promoter director of Money Matters (India) Private
Limited (MMIPL), the co-promoter of MMFSL. Mr.
Sharma started MMIPL in 1995 and has been looking
after the overall affairs of MMIPL. In August 2009, the
company also saw induction of some prominent names
from Indian Financial Services Sector on the Board.
Business Operations
MMFSL primarily obtains its revenues by way of fees
on its debt syndication business (accounted for over
90% of its total income in FY09). The company is also
into trading in debt securities both Corporate and Gsec.
Though the debt syndication business was set up mainly
in Q3FY08, the growth of the business picked up only
in FY09. In FY09 the Company has handled around 70
debt issues (FY08:- 3 issues) aggregating to Rs.12490
crore (FY08:- Rs.305 crore). The client base of MMFSL
consists mainly of private sector entities.
The debt syndication business of the company is mainly
dependent on the professional experience of few key
managerial personnel. In September 2009, the company
saw departure of key executives associated with the debt
syndication business. Given the recent departure of its
key managerial personnel as well as nature of the
business, which is more people centric, it is too early to
assess the impact on the future business prospects of
the company. However, the company has taken steps
to alleviate the impact of the departure of the key
personnel by putting together a new business team.
Asset Profile
MMFSL witnessed increase in its scale of operations
post take-over by the present management in FY08.
Total assets jumped substantially from Rs.91.40 crore
as on March 31, 2008 to Rs.227.36 crore as on March
31, 2009 mainly on back of internal accruals in FY09.
As on Mar 31, 2009 the company’s funds were mainly
held in the form of cash and bank balances (39.25% of
1
total assets as on March 31, 2009) and investments Key Financials
(24.42% of total assets as on March 31, 2009) on (Rs Cr)
account of its debt trading and subsidiary holdings. As on/For the Year Ended Mar.31, 2008 Mar.31, 2009
MMFSL increased its investment in its subsidiaries from
Rs.6.20 crore as on March 31, 2008 to Rs.30.50 crore Fees from Financial advisory services 3.21 157.90
as on March 31, 2009. Investment Income 2.71 5.84
Total Income 7.78 169.76
Investment in subsidiaries Finance Charges 1.25 1.61
 MMFSL has the following wholly owned PAT 4.26 101.45
subsidiaries :- Total Assets 91.40 227.36
Investments 23.21 55.50
a) Money Matters Securities Private Limited Cash and Bank 2.10 89.24
(MMSPL) – Broking subsidiary
Total Borrowings 60.00 21.75
b) Money Matters Investment Advisors Private Networth 29.21 148.60
Limited (MMIAPL) – Investment banking Ratios (%)
subsidiary holding Category I Merchant Overall Debt/ Equity ratio (times) 0.15
Banking Licence
Interest coverage (times) 96.73
c) Money Matters Distribution Company Private Total Income/Avg. Cap. Emp (%) 130.78
Limited. – Subsidiary engaged in distribution Op. expenses /Avg. cap. Emp (%) 11.97
of financial products Interest/Borrowed Funds (%) 3.94
PAT/total income (%) 59.76
The broking subsidiary MMSPL accounted for around
Return on Net worth (%) 113.79
82% of the total investments of Rs.30.5 cr in its
subsidiaries as on Mar 31, 2009. The company has set Return on capital employed (%) 120.05
up a new subsidiary by the name Money Matters Capital Return on Total Assets (%) 63.65
Private Limited for undertaking margin funding and loan
against shares and to carry on the NBFC related the total income. Expansion in scale of operations in
activities in FY10. FY09 as well as the non capital intensive nature of its
business resulted in substantial improvement in PAT
Resource Profile
from Rs.4.27 crore in FY08 to Rs.101.44 crore in FY09.
Rights issue (aggregating to Rs.18 cr) coupled with
Performance for H1FY10 (unaudited)
substantial increase in profitability in FY09 (PAT of
Rs.101.44 crore) and 100% retention of profit resulted MMFSL recorded substantial jump in income from
in increased networth from Rs.29.21 crore as on March advisory services from Rs.49.65 crore in H1FY09 to
31, 2008 to Rs.148.60 crore as on March 31, 2009. This Rs.86.35 crore in H1FY10 on account of increase in
has also resulted in improvement in gearing levels from volume of debt syndication business. Substantial surge
2.05 times as on March 31, 2008 to 0.15 times as on in total income coupled with control over operating
March 31, 2009. MMFSL has availed sanction for an expenses has resulted in increase in profitability from
overdraft facility of Rs.100 crore to fund the debt trading Rs.30.66 crore in H1FY09 to Rs.60.98 crore in H1FY10
.The O/D facility is granted against the pledge of
government securities and debt securities rated “A” and Risk Assessment
above with margins depending on the type of security
The company is primarily affected by two sets of risks
pledged.
1) Business and concentration risk emerging out of the
Financials Debt syndication Advisory business and 2) Liquidity Risk
on account of its Debt trading business.
The company saw its Total income rising from Rs.7.78
crore in FY08 to Rs.169.76 crore in FY09 on account of  The debt syndication business is mainly dependent
substantial jump in fee income from debt syndication on the professional expertise of its key
advisory business. Advisory fees contributed to 93% of management team. In September 2009, the

2 CAREVIEW
 company witnessed major changes in its key
management team, impact of which is difficult to
ascertain at the moment.
 Concentration Risk in MMFSL’s advisory business
is high with top 5 clients accounting for 43% of fee
income in FY09. Considering that the company has
just commenced its operations the concentration
risk may ease with expansion in scale of operations.
 The company takes proprietary positions in debt
issues, the company can face liquidity issues in the
event it is unable to dispose of its investments in a
timely manner. The company has tried to address
this risk by setting qualitative and quantitative limits
on its investment portfolio. The investment policy
of the company prescribes a minimum “AA-” debt
rating for investments in PSU Bank bonds and
“AAA” debt rating for investments in any other entity
including investments in Private Bank bonds
 Presently the company’s underwiritng risk is low
as it is yet to commence the underwriting business
on a large scale considering that its merchant
banking subsidiary (MMIAPL) has commenced full
fledged operations only in April 2009. However
broad limits have been set by the company in
respect of the quality of issues to be underwritten.

October 2009

Disclaimer
CARE’s ratings are opinions on credit quality and are not recommendations to sanction, renew, disburse or recall the concerned bank
facilities or to buy, sell or hold any security. CARE has based its ratings on information obtained from sources believed by it to be
accurate and reliable. CARE does not, however, guarantee the accuracy, adequacy or completeness of any information and is not
responsible for any errors or omissions or for the results obtained from the use of such information. Most entities whose bank
facilities/instruments are rated by CARE have paid a credit rating fee, based on the amount and type of bank facilities/instruments.

CREDIT ANALYSIS & RESEARCH LIMITED 3

CARE is headquartered in Mumbai, with Offices all over India. The office addresses and contact numbers are given below:

HEAD OFFICE: MUMBAI

Mr. D.R. Dogra Mr. Rajesh Mokashi
Managing Director Dy. Managing Director
Cell : +91-98204 16002 Cell : +91-98204 16001
E-mail : dr.dogra@careratings.com E-mail: rajesh.mokashi@careratings.com

Mr. Ankur Sachdeva

Head - Business Development
Cell : +91-9819698985
E-mail: ankur.sachdeva@careratings.com

4th Floor, Godrej Coliseum, Somaiya Hospital Road, Off Eastern Express Highway,
Sion (East), Mumbai 400 022 Tel.: (022) 67543456 Fax: (022) 67543457
Website: www.careratings.com

OFFICES

Mr.Mehul Pandya Mr.Sundara Vathanan

Regional Manager Regional Manager
32 TITANIUM No.G1, Canopy Royal Manor,
Prahaladnagar Corporate Road, Near Manipal Hospital,
Satellite, Rustombagh, Off Airport Road,
Ahmedabad - 380 015. Bangalore - 560 017.
Tel - 079 4026 5656 Tel - 080 2520 5575
Mobile - 98242 56265 Mobile - 98803 60878
E-mail: mehul.pandya@careratings.com E-mail: sundara.vathanan@careratings.com

Mr.Ashwini Jani Mr. Rahul Patni

Regional Manager Regional Manager
Unit No. O-509/C, Spencer Plaza, 401, Ashoka Scintilla
5th Floor, No. 769, 3-6-520, Himayat Nagar
Anna Salai, Hyderabad - 500 029
Chennai 600 002 Tel - 040 4010 2030
Tel: 044 2849 7812/2849 0811 Mobile - 91600 04563
Mobile - 91766 47599 E-mail: rahul.patni@careratings.com
E-mail :ashwini.jani@careratings.com

Mr. Sukanta Nag Ms. Swati Agrawal

Regional Manager Regional Manager
3rd Floor, Prasad Chambers 710 Surya Kiran,
(Shagun Mall Building) 19 K.G. Road,
10A, Shakespeare Sarani New Delhi - 110 001.
Kolkata - 700 071. Tel - 011 2331 8701/2371 6199
Tel - 033 2283 1800/1803 Mobile - 98117 45677
Mobile - 98311 70075 E-mail :swati.agrawal@careratings.com
E- mail: sukanta.nag@careratings.com

CREDIT ANALYSIS & RESEARCH LIMITED 1