Regency Fincorp - Regency Fincorp
Financial Performance
Revenue Growth by Segment
Total income grew 37.7% YoY to INR 21.66 Cr in FY25, driven by a 36.5% increase in AUM to INR 170.18 Cr.
Geographic Revenue Split
Chandigarh (38.61%), Punjab (20.40%), Delhi (19.49%), Uttar Pradesh (12.88%), and Haryana (4.84%).
Profitability Margins
Net Profit Margin improved from 12.88% to 24.93% (up 93.63% YoY); Net Interest Margin (NIM) increased from 5.89% to 8.27% in FY25.
EBITDA Margin
Operating Profit Margin increased from 21.65% to 38.22% (up 76.55% YoY), reflecting rationalization in operating expenses.
Capital Expenditure
Planned capital infusion of INR 136 Cr for business expansion, including INR 96 Cr from preferential allotments and INR 40 Cr from family offices.
Credit Rating & Borrowing
Credit rating upgraded to IVR BBB- / Positive in September 2025; borrowing costs include a 14% p.a. fixed interest rate for proposed NCDs.
Operational Drivers
Raw Materials
Debt capital (Term Loans, NCDs) and Equity capital represent the primary inputs for lending operations.
Import Sources
Sourced from domestic Indian financial markets and institutional investors.
Key Suppliers
Promoters, institutional investors (family offices), and banks/financial institutions providing debt facilities.
Capacity Expansion
AUM grew 36.5% to INR 170.18 Cr in FY25; secured loan book increased to 25.60% of total portfolio by June 2025 from 0% in FY24.
Raw Material Costs
Interest expense is the primary cost; interest coverage ratio improved 42.8% YoY to 1.84x in FY25.
Manufacturing Efficiency
Cost to income ratio improved from 62.15% to 49.52% in FY25 due to income growth and expense rationalization.
Logistics & Distribution
Not applicable for financial services.
Strategic Growth
Expected Growth Rate
36.5%
Growth Strategy
The company plans to achieve growth by pivoting its portfolio toward secured loans (aiming for 100% secured by December 2026), raising INR 136 Cr in fresh capital, and expanding digital lending operations in Tier II/III cities.
Products & Services
Secured and retail credit, micro-entrepreneurial loans, and education-linked loans.
Brand Portfolio
Regency Fincorp Limited.
New Products/Services
Secured loan portfolio, which grew from 0% in FY24 to 25.60% of the total book by June 2025.
Market Expansion
Targeting Tier II/III cities for secured and retail credit demand with a focus on technology enablement.
Strategic Alliances
Co-lending partnerships with banks and fintech companies leveraging AI-based credit scoring.
External Factors
Industry Trends
NBFC sector growth is driven by digital adoption and the RBI's Scale-Based Regulatory (SBR) framework, which emphasizes governance and risk classification.
Competitive Landscape
Stiff competition from varied-sized NBFCs, fintechs, small finance banks, and unorganized lenders.
Competitive Moat
Last-mile connectivity and agile underwriting systems provide a competitive edge in underserved Tier II/III markets.
Macro Economic Sensitivity
Sensitive to interest rate cycles and inflation, which impact credit demand and borrowing costs in the NBFC sector.
Consumer Behavior
Shift toward digital lending platforms and increasing demand for secured retail credit in smaller cities.
Regulatory & Governance
Industry Regulations
RBI Scale-Based Regulatory (SBR) framework for Base Layer NBFCs and Fair Lending Practices Code for digital lending.
Risk Analysis
Key Uncertainties
Geographic concentration (78.5% in top 3 regions) and credit risk in the remaining unsecured/subprime segments.
Geographic Concentration Risk
Chandigarh (38.61%), Punjab (20.40%), and Delhi (19.49%) account for the majority of the portfolio.
Third Party Dependencies
Dependency on IT system vendors and outsourcing partners for digital lending operations.
Technology Obsolescence Risk
Risk of technology becoming obsolete due to rapid innovation in AI-based credit scoring and API-driven platforms.
Credit & Counterparty Risk
Gross NPA of 0.42% and Net NPA of 0.32% in FY25, reflecting healthy asset quality.