CRISIL has maintained its top 'AAA' ratings on Citicorp Maruti Finance Ltd's (Citicorp Maruti) non-convertible debentures and the P1+ rating on its short term debt. These continue to be based on its ultimate majority ownership by Citigroup Inc, which owns the company through Citicorp Finance India Limited (Citicorp Finance, rated 'AAA/Stable/P1+' by CRISIL), enabling Citicorp Maruti to enjoy a strong asset quality, a good resource profile and comfortable financial flexibility. The company's standalone risk profile is, however, constrained by its concentrated business of financing Maruti cars alone, and its low and declining profitability.

Citicorp Maruti was promoted by Citibank Overseas Investment Corporation, USA, as a joint-venture between Citicorp Finance (74 per cent) and Maruti (26 per cent) in October 1997, to finance vehicles manufactured by Maruti. Citicorp Finance is owned by global financial services conglomerate Citigroup Inc (rated 'AA-/Stable/A1+' by Standard and Poor's).

Maruti, India's largest car manufacturer, is a joint venture between the government of India and Suzuki Motor Company, Japan. Citicorp Maruti is a medium-sized player in the car financing market with total funds deployed of Rs8,144 million as at March 31, 2004. The company reported a net profit (PAT) of Rs21.6 million for the year ended March 31, 2004 and an unaudited PAT of Rs15.08 million for the quarter ended December 31, 2004.

Outlook: Citicorp Maruti will continue to benefit from the expertise and funding support provided by Citigroup Inc. While CRISIL expects Citicorp Maruti to maintain its strong asset quality in the medium term, its ability to improve its market position and profitability given the intense competition in the car financing segment will influence its standalone credit risk profile.