The Escorts Investment Bank has broadened the base of business activities over the last couple of years and earnings have improved considerably over this period. A 40 percent rights issue has also improved capitalisation with equity increasing by about 60 percent from June 04 to September 05. Improved diversification in the institution's earning base would further support assigned ratings.
The short-term ratings reflect the bank's currently strong liquidity profile. The JCR-VIS believes that reducing reliance on short-term money markets for funding and cultivating presence in the primary funds market can also provide increased financial flexibility to non-banking finance companies.