💰 Financial Performance

Revenue Growth by Segment

Total income grew 47% YoY to INR 182.2 Cr in FY24 from INR 124.0 Cr in FY23. However, Q2 FY26 income dropped to INR 22.8 Cr, a significant decline from INR 45.6 Cr in Q2 FY25, as disbursements fell 56% from INR 2,100 Cr to INR 920 Cr.

Geographic Revenue Split

Not disclosed in available documents, though the company operates a network of 117 branches across India as of FY25.

Profitability Margins

Net profit for FY24 was INR 11.7 Cr (6.4% net margin), up from INR 5.5 Cr in FY23. Profitability turned negative in Q2 FY26 with a net loss of INR 33.1 Cr due to AUM contraction and high operating expenses.

EBITDA Margin

Operating expenses were INR 91.1 Cr against Total Income of INR 182.2 Cr in FY24, representing a core operating margin of approximately 50% before provisions and taxes.

Credit Rating & Borrowing

Downgraded to 'CARE D' (Default) in July 2025 from 'CARE BB+' following the company's inability to make interest and principal payments on NCDs due on July 16, 2025.

⚙️ Operational Drivers

Raw Materials

Debt Capital (Bank Facilities, NCDs) and Equity Capital represent the primary 'raw materials' for lending operations.

Import Sources

Not applicable for financial services.

Key Suppliers

Incred Financial Services (slump sale partner), MCG Group (incoming promoter), and 40+ active lenders.

Capacity Expansion

Current capacity is 117 branches (optimized from 128 in FY24). Planned expansion focuses on scaling AUM through the existing network and L-a-a-S strategies.

Raw Material Costs

Interest costs are the primary raw material expense; however, the company is in default as of July 2025. Operating expenses rose 97% YoY to INR 91.1 Cr in FY24 due to branch expansion.

Manufacturing Efficiency

Branch network optimization (117 active branches) and a proprietary underwriting model are used to drive operational efficiency.

Logistics & Distribution

Not applicable for financial services.

📈 Strategic Growth

Expected Growth Rate

2.80%

Growth Strategy

The company plans to achieve growth by transitioning to a new promoter (MCG Group) which will infuse capital to raise CAR above 50%, and by executing a slump sale of its gold loan business to Incred Financial Services to improve liquidity. Future focus is on higher-yielding MSME products and expanding the L-a-a-S (Lending-as-a-Service) model with 6 current partners.

Products & Services

Gold-backed MSME Loans, Green Energy Finance, and Collateral-free MSME Business Loans.

Brand Portfolio

TruCap, Dhanvarsha (associated with ESOP plan).

New Products/Services

Expansion into higher-yielding MSME Gold-backed loans and Green Energy Finance to maximize output from the branch network.

Market Expansion

Focus on underserved and unserved MSMEs in India through a multi-channel distribution network.

Strategic Alliances

Incred Financial Services (slump sale partner), MCG Group (new promoter), and 6 L-a-a-S partners.

🌍 External Factors

Industry Trends

The NBFC sector is seeing growth in gold loans (driven by rising gold prices) and digital innovation, though it faces tighter RBI liquidity norms and digital lending regulations.

Competitive Landscape

Faces intense pressure from established NBFCs, aggressive fintechs, and traditional banks in the MSME lending space.

Competitive Moat

Durable advantages include a proprietary underwriting model, a network of 117 branches, and established L-a-a-S partnerships with 6 entities, providing a robust multi-channel distribution framework.

Macro Economic Sensitivity

Highly sensitive to global growth (projected to drop to 2.8% in 2025) and domestic MSME credit demand.

Consumer Behavior

Shift toward digital lending and resilient demand for gold-backed credit among underserved MSMEs.

Geopolitical Risks

US tariffs reaching Great Depression levels and retaliatory trade measures create epistemic uncertainty affecting the economic outlook.

⚖️ Regulatory & Governance

Industry Regulations

Complies with RBI prudential norms, digital lending norms, and SEBI listing regulations.

Environmental Compliance

ESG committee reviews performance annually; Business Responsibility Report (BRR) published as part of the Annual Report.

Taxation Policy Impact

Effective tax rate of approximately 4% in FY24 (INR 0.5 Cr tax on INR 12.2 Cr PBT).

Legal Contingencies

Default on interest and principal for NCDs due July 16, 2025; reported covenant breaches with certain lenders during FY25.

⚠️ Risk Analysis

Key Uncertainties

Liquidity crisis following NCD default (CARE D rating), GNPA stress in unsecured business loans, and successful transition to the new promoter (MCG Group).

Geographic Concentration Risk

Not disclosed, but operates through 117 branches.

Third Party Dependencies

High dependency on 100+ distribution partners and 6 L-a-a-S partners for AUM growth.

Technology Obsolescence Risk

Accelerating pace of fintech innovation may outpace internal technology upgrade cycles.

Credit & Counterparty Risk

GNPA rising due to stress in the unsecured business loan portfolio and contraction in AUM.