CIFL - Capital India

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

💰 Financial Performance

Revenue Growth by Segment

Total income for CIFL on a standalone basis declined by 8.02% YoY to INR 113.24 Cr in FY25 from INR 123.11 Cr in FY24. Segmentally, lending operations contributed approximately 87% of total income, while forex services accounted for 13% as of 9MFY25.

Geographic Revenue Split

CIFL operates through a network of 29 lending branches across 7 states and 39 dedicated forex branches under the 'RemitX' brand. Specific percentage revenue contribution per state is not disclosed.

Profitability Margins

Net Profit Margin (NPM) stood at 6.39% for FY25. Profit After Tax (PAT) declined by 41.39% to INR 11.78 Cr in FY25 from INR 20.10 Cr in FY24, primarily due to losses in the forex business segment. Return on Average Assets (RoAA) decreased from 1.60% to 0.91% YoY.

EBITDA Margin

Net Interest Margin (NIM) remained stable at 6.38% in FY24 compared to 6.29% in FY23. Core profitability was impacted in FY25 by the forex division's performance, leading to a drop in Return on Average Net Worth (RoNW) from 3.37% to 1.92%.

Capital Expenditure

While specific CapEx for infrastructure is not detailed, the company concluded a major disinvestment by selling its 100% stake in Capital India Home Loans (CIHL) for INR 267 Cr in August 2025 to boost liquidity and capital for lending operations.

Credit Rating & Borrowing

CIFL maintains an 'Adequate' liquidity profile with a Stable outlook. The company has a strong Capital Adequacy Ratio (CRAR) of 36.08% as of March 31, 2025, significantly above the 15% regulatory requirement. Borrowing costs are reflected in an Interest Coverage Ratio of 1.38x (FY24).

⚙️ Operational Drivers

Raw Materials

As a financial institution, CIFL's primary 'raw material' is capital/debt. Interest expense on borrowings is the major cost driver, with a Debt/Equity ratio of 1.15x as of March 31, 2025.

Import Sources

Not applicable for financial services; capital is sourced from domestic banks, NCD issuances, and internal accruals.

Key Suppliers

Key financial backers and equity suppliers include Capital India Corp Private Limited (73% stake), Dharampal Satyapal Group (12%), and RJ Corp Limited (5%).

Capacity Expansion

Current operational capacity includes 29 lending branches and 39 forex branches. AUM grew to INR 1,004.52 Cr as of March 31, 2025, up from INR 913.04 Cr in FY24, representing a 10.02% increase.

Raw Material Costs

Interest costs are the primary expense. The company maintains a low gearing of 1.15x (FY25) to manage cost of funds. Procurement strategy involves shifting from wholesale to granular MSME lending to improve yields.

Manufacturing Efficiency

Efficiency is measured by collection efficiency and asset quality. Gross NPA stood at 1.83% and Net NPA at 0.98% as of March 31, 2025, with a Provision Coverage Ratio (PCR) of approximately 47%.

Logistics & Distribution

Distribution is handled via 616 professionals across 68 total branches (lending and forex) to ensure credit delivery efficiency.

📈 Strategic Growth

Expected Growth Rate

32%

Growth Strategy

CIFL is pivoting from wholesale lending (which dropped from 93% of AUM in FY20 to 9% in 9MFY25) to MSME lending. The strategy involves deploying the INR 267 Cr proceeds from the CIHL stake sale into granular MSME portfolios, leveraging its AD-II license for forex expansion, and utilizing its 52.5% stake in RapiPay Fintech for digital reach.

Products & Services

MSME Business Loans, Loan Against Property (LAP), Money Changing, Foreign Exchange Services, and Remittances.

Brand Portfolio

RemitX (Forex), RapiPay (Fintech/Neo-banking), Capital India.

New Products/Services

Expansion into digital financial services through RapiPay and potential commencement of operations for NYE Insurance Broking Private Limited.

Market Expansion

Focusing on increasing penetration in the 7 states where lending branches currently exist, targeting a 32% CAGR seen in the broader NBFC MSME lending segment.

Market Share & Ranking

CIFL is classified as a 'Middle Layer' non-deposit taking NBFC by the RBI. Specific market share percentage is not disclosed.

Strategic Alliances

Strategic partnership with RapiPay Fintech Private Limited (52.5% subsidiary) to integrate fintech capabilities with traditional NBFC lending.

🌍 External Factors

Industry Trends

NBFCs are seeing a surge in MSME credit, with the segment's share in overall loan portfolios rising from 5.9% in FY21 to 9.1% in H1 FY25. The industry is evolving toward digital-first delivery and granular credit.

Competitive Landscape

Faces severe competition from traditional banks and specialized NBFCs in the MSME and LAP segments.

Competitive Moat

Moat is built on a diversified revenue stream (Lending + Forex) and a strong capital base (CRAR 36.08%). The shift to granular MSME lending (81% of portfolio) provides a defensive cushion against large-ticket wholesale defaults.

Macro Economic Sensitivity

Highly sensitive to MSME sector health; the segment is vulnerable to downward economic cycles and macro-economic shifts which impact borrower cash flows.

Consumer Behavior

Increasing demand for inclusive credit and digital-led neo-banking services among MSME borrowers.

Geopolitical Risks

Trade barriers or global travel restrictions would directly impact the 'RemitX' forex business, which contributed to the subdued performance in FY25.

⚖️ Regulatory & Governance

Industry Regulations

Regulated as a Middle Layer NBFC by the RBI; holds an AD-II license for forex. Compliance includes mandatory KYC, RBI-aligned modules, and CRAR maintenance above 15%.

Environmental Compliance

The company issues a Business Responsibility & Sustainability Report (BRSR) in accordance with Regulation 34(2)(f) of Listing Regulations.

Taxation Policy Impact

Standard corporate tax rates apply. Provision for tax for subsidiaries like RapiPay was INR 23.20 Cr in the reporting period.

Legal Contingencies

The Secretarial Audit Report for FY25 confirms compliance with the Companies Act and SEBI regulations. Specific values for pending litigations are not disclosed in the available documents.

⚠️ Risk Analysis

Key Uncertainties

The primary uncertainty is the ability to deploy the INR 267 Cr cash surplus profitably while maintaining asset quality. Forex business volatility remains a risk to consolidated PAT.