Purple Finance - Purple Finance

📊 BSE: 544191 🏢 Non Banking Financial Company (NBFC) 📅 Last Updated: 11/13/2025 15:25

💰 Financial Performance

Revenue Growth by Segment

Gross income grew by 234% YoY, rising from INR 4.44 Cr in FY24 to INR 14.85 Cr in FY25, primarily driven by a 156% increase in loan disbursements which reached INR 78.66 Cr.

Geographic Revenue Split

The company operates through 32 branches (up from 19) covering over 150 towns, though specific percentage revenue contribution per region is not disclosed.

Profitability Margins

Operating profit margin improved significantly from -275% to -99% YoY, while net profit margin improved from -171% to -105%, indicating narrowing losses as the business scales.

EBITDA Margin

EBIT remains negative as the company is in a growth phase; however, the operating loss as a percentage of total income reduced from -275% to -99% due to better cost absorption.

Capital Expenditure

Infrastructure and talent investments increased staff costs and total expenses from INR 3.78 Cr to INR 6.1 Cr to support the expansion from 19 to 32 branches.

Credit Rating & Borrowing

The Debt-to-Equity ratio increased from 0.46 to 0.93 to fund AUM growth; the company issued Senior, Secured, Rated, Listed NCDs in January 2026 to diversify funding.

⚙️ Operational Drivers

Raw Materials

Capital and debt funding represent 100% of the 'raw material' for lending operations.

Import Sources

Domestic sources including Banks, Mutual Funds, and capital markets via NCDs.

Key Suppliers

Funding is sourced from various Banks, Mutual Funds, and 3 specific co-lending partners.

Capacity Expansion

Branch network expanded 68% from 19 to 32 branches; workforce grew to 335 employees to manage an AUM of INR 103.05 Cr as of March 31, 2025.

Raw Material Costs

Cost of funds is a critical driver; the company is shifting toward NCDs and securitization to manage the 0.93 Debt-Equity leverage.

Manufacturing Efficiency

Utilizes 'straight-through processing' and paperless disbursement to increase productivity and reduce the turnaround time for MSME loan approvals.

Logistics & Distribution

Distribution is handled via a 'high-tech high-touch' model across 32 branches to build customer trust in local sourcing locations.

📈 Strategic Growth

Expected Growth Rate

15%

Growth Strategy

Growth will be achieved by targeting the unbanked MSME market where only 11% of micro-enterprises have credit access. Strategies include a proposed INR 40.33 Cr rights issue (June 2025), expanding the branch footprint beyond 32 locations, and leveraging 3 co-lending partnerships to scale AUM beyond the current INR 110 Cr.

Products & Services

Secured MSME loans, with 80% of the portfolio consisting of loans under INR 10 Lakhs.

Brand Portfolio

Purple Finance

New Products/Services

The company aspires to transition into a Small Finance Bank to offer full-scale banking services to the MSME sector.

Market Expansion

Focusing on small cities where 64% of micro-enterprises are located and credit needs are only 30% met.

Market Share & Ranking

Not disclosed; company is a niche player in the MSME lending segment.

Strategic Alliances

Active co-lending tie-ups with 3 partners to enhance disbursement capabilities.

🌍 External Factors

Industry Trends

The MSME lending industry is evolving toward digital-first models with a matching equity demand of USD 1.7 Bn and an expected IRR of 15%.

Competitive Landscape

Faces intense competition from banks, Fintechs, and large NBFCs entering the attractive MSME lending segment.

Competitive Moat

Sustainable advantage through a 'high-tech high-touch' model, AI-driven risk management, and a leadership team with 130+ years of cumulative experience.

Macro Economic Sensitivity

Highly sensitive to MSME sector health and rural economy resilience; any slowdown in the Indian economy directly impacts the financing business.

Consumer Behavior

Shift toward digital-enabled secured lending among micro-enterprises seeking quick capital for business expansion.

Geopolitical Risks

India's geopolitical importance provides a stable macro environment, though changes in government policies could impact growth.

⚖️ Regulatory & Governance

Industry Regulations

Subject to RBI regulations including asset classification, capital adequacy, and solvency requirements; transitioned to Ind AS reporting in FY24.

Environmental Compliance

Focus on social impact through ESG; 100% of the portfolio supports women's financial inclusion.

Taxation Policy Impact

The company reported a deferred tax credit of INR 4.97 Cr in FY25 compared to INR 5.64 Cr in FY24.

⚠️ Risk Analysis

Key Uncertainties

Asset Quality Risk (NPAs) and Liquidity Risk (refinancing challenges) are primary uncertainties that could impact profitability if economic growth mutes.