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Bharti Airtel Stock Hits Fresh 52-Week High on Strong Market Momentum
Market News - June 18, 2025

Aditya Birla Capital Hits 52-Week High Amid Strong Market Momentum

Aditya Birla Capital Hits 52-Week High Amid Strong Market Momentum

Aditya Birla Capital Limited (ABCL) has captured market attention after its stock surged to a new 52-week high on the National Stock Exchange (NSE). On June 17, 2025, the company’s share price touched ₹259.30, driven by consistent bullish sentiment and increased investor confidence. This significant milestone reflects the market’s optimistic outlook towards the company’s financial health and growth prospects.

Technical Indicators Signal Bullish Breakout

The stock’s recent movement has shown strong technical support, indicating a bullish breakout pattern. Aditya Birla Capital’s share price has not only crossed its previous resistance levels but is also trading well above its key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages. This multi-level support signals a sustained uptrend.

Technical experts highlight that the Relative Strength Index (RSI) currently ranges between 60 to 75, which shows that the stock has healthy momentum but is not yet in the overbought zone. In addition, recent trading sessions have seen a notable increase in volume, further confirming the strength behind the stock’s rally. Analysts suggest that immediate targets now lie at ₹309 and ₹342, with key support expected around ₹233 to ₹242.

Strong Quarterly and Annual Financial Performance

Aditya Birla Capital’s recent financial results have supported this bullish momentum. For the quarter ending March 2025, the company reported impressive revenue of ₹12,214 crore along with a net profit of ₹691 crore. On an annual basis, the company achieved a revenue of ₹40,590 crore and posted a net profit of ₹2,993 crore for the fiscal year 2025.

These figures mark a noticeable improvement from the previous fiscal year. In March 2024, the company reported revenue of ₹34,506 crore with a net profit of ₹3,135 crore. Although the profit slightly dipped on a year-on-year basis, the improvement in revenue and steady operational growth have reinforced investor trust.

The company’s book value per share also improved from ₹110 in the previous year to ₹116 in the latest fiscal period, indicating stronger asset backing for shareholders.

Valuation Metrics and Financial Ratios

Aditya Birla Capital’s financial ratios reflect a stable and well-rounded financial position. As of March 2025, the company’s Return on Equity (RoE) stands at 10.96%, while the Return on Capital Employed (ROCE) is steady. The company’s debt-to-equity ratio is currently around 4.59, showing high leverage, but this is typical in financial services and lending businesses.

The stock is currently trading at a Price-to-Earnings (P/E) ratio of 14.46 and a Price-to-Book (P/B) ratio of 1.59, suggesting that the stock is moderately valued compared to the sector. However, some analysts point out that the rising stock price may lead to an increase in valuation levels if the rally continues.

Robust Technical and Fundamental Setup

The stock’s bullish setup is further supported by key technical patterns, including a confirmed breakout from a falling wedge and the formation of bullish candles over consecutive trading sessions. The stock’s price has comfortably breached its 52-week high, supported by rising trading volumes and strong investor participation.

Year-to-date, Aditya Birla Capital’s stock has gained nearly 40%, significantly outperforming broader market indices which have posted modest gains of around 5% during the same period. This strong relative performance highlights the company’s leadership position in the financial services sector.

Potential Risks and Cautionary Notes

Despite the strong rally, investors should approach with caution. The stock’s elevated Price-to-Earnings ratio suggests that further price appreciation may depend heavily on continued earnings growth. Moreover, the company’s relatively high debt level could pose risks if macroeconomic conditions change or if interest rates rise in the future.

There is also a possibility of profit booking in the near term, especially after the recent sharp uptrend. Analysts recommend keeping a close watch on support levels between ₹233 and ₹242 to safeguard positions against potential downside corrections.

Future Outlook: Bullish with Disciplined Approach

Looking ahead, Aditya Birla Capital is expected to maintain its growth momentum driven by expanding assets under management, increasing loan disbursements, and improving asset quality. The company is well-positioned to benefit from India’s strong credit demand and favorable interest rate environment.

While the medium to long-term outlook remains positive, market experts advise investors to adopt a disciplined approach with defined entry points and strict stop-loss levels. With near-term targets set at ₹309 and ₹342, the stock offers attractive potential, provided investors manage risks carefully.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Pharma Stocks Decline Sharply Amid Fresh US Tariff Concerns

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UGRO Capital Acquires Profectus Capital in Ambitious ₹1,400 Crore Deal
business update - June 18, 2025

UGRO Capital Acquires Profectus Capital in Ambitious ₹1,400 Crore Deal

UGRO Capital Acquires Profectus Capital in Ambitious ₹1,400 Crore Deal

Strategic acquisition aims to turbocharge MSME lending, expand reach, and boost profitability for UGRO Capital

Introduction: A Landmark Deal in Indian Lending
The Indian non-banking finance company (NBFC) landscape is witnessing a transformative moment as UGRO Capital, a data-tech-driven lender focused on MSMEs, moves to acquire Profectus Capital for ₹1,400 crore in cash. This acquisition is not just a scale-up; it’s a strategic leap that will reshape UGRO’s business profile, enhance its risk metrics, and accelerate its ambition to capture a larger share of the MSME lending market.

The Acquisition: Key Details and Rationale
• Deal Structure:
The all-cash transaction will see UGRO Capital purchase 100% of Profectus Capital’s shares from its current owners, including global private equity firm Actis. The consideration will be paid in a single tranche at closing, funded through a mix of UGRO’s recent equity raise and internal accruals.
• Scale and Reach:
Profectus brings a fully secured loan book of ₹3,468 crore, a 28-branch network across seven states, and a workforce of over 800 employees. The acquisition will increase UGRO’s consolidated assets under management (AUM) by 29% to ₹15,471 crore, while expanding its branch footprint to 263 locations.
• Financial Impact:
The deal is expected to add approximately ₹150 crore to UGRO’s annualized profits and deliver operational cost savings of ₹115 crore post-merger. The company anticipates an improvement in return on assets (ROA) by 0.6–0.7 percentage points, with projections to reach 3.5% in FY26 and 4.5% in FY27.

Why Profectus? Strategic Fit and Synergies
• Robust Portfolio:
Profectus has maintained steady growth, reporting a gross NPA of just 1.6% and a net NPA of 1.1% as of March 2025. Its focus on fully secured lending complements UGRO’s risk appetite and strengthens the overall loan book quality.
• Diverse Lender Network:
The acquisition gives UGRO access to Profectus’ relationships with private sector banks and development finance institutions, broadening its liability profile and funding options.
• Operational Efficiency:
With zero origination costs for the acquired portfolio and significant cost synergies, UGRO expects to unlock substantial value from the integration.
• Market Expansion:
The deal positions UGRO to accelerate growth in high-yield segments such as supply chain finance, machinery loans, and embedded finance. It also marks UGRO’s entry into school financing, a new vertical for the company.

Integration and Next Steps
Both companies will maintain independent operations and strategies during the integration phase, which is expected to last two to three months pending regulatory and shareholder approvals. UGRO plans a seamless transition to maximize synergies while preserving the strengths of both organizations.
UGRO’s founder and managing director, Shachindra Nath, emphasized that the acquisition leverages the company’s recent equity raise to achieve instant scale and operational efficiency. Profectus CEO K.V. Srinivasan highlighted the complementary nature of the businesses and the potential for greater profitability and efficiency.

Market Reaction and Industry Impact
The announcement has been well received by the market, with UGRO Capital’s shares rising sharply following the news. Analysts view the acquisition as a value-accretive move that positions UGRO as a major force in MSME lending, with improved profitability and a stronger risk profile.
This deal also signals a broader trend of consolidation and strategic expansion in the NBFC sector, as lenders seek scale, diversification, and operational efficiencies to navigate a competitive and evolving market landscape.

Conclusion: A New Chapter for UGRO Capital
UGRO Capital’s acquisition of Profectus Capital marks a watershed moment in its growth journey. By combining Profectus’ robust secured lending portfolio and branch network with UGRO’s data-driven approach and capital strength, the merged entity is poised to set new benchmarks in MSME lending. The deal not only enhances UGRO’s scale and profitability but also strengthens its foundation for sustainable, long-term growth in India’s dynamic financial sector.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Polycab Secures ₹6,448 Crore BharatNet Project!

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HDB Financial Services Gets Regulatory Nod for ₹12,500 Crore IPO
Market News - June 4, 2025

HDB Financial Services Gets Regulatory Nod for ₹12,500 Crore IPO

HDB Financial Services Gets Regulatory Nod for ₹12,500 Crore IPO

HDFC Bank’s NBFC arm gears up for one of India’s largest IPOs, following SEBI’s green light and RBI’s listing mandate for top-tier non-banking finance companies.

Introduction

India’s capital markets are set for a major event as HDB Financial Services, the retail-focused NBFC arm of HDFC Bank, prepares to launch its much-anticipated ₹12,500 crore IPO. The move comes after SEBI granted its formal approval in late May 2025, paving the way for one of the largest public offerings by a non-banking lender in the country’s history. This IPO is not just a capital-raising exercise but also a regulatory milestone, as it fulfills the Reserve Bank of India’s (RBI) requirement for large NBFCs to list by September 2025.

IPO Structure and Details

HDB Financial Services plans to raise ₹12,500 crore through its IPO, including a ₹2,500 crore fresh share issuance and a ₹10,000 crore offer for sale by HDFC Bank, which currently holds a 94.36% ownership in the subsidiary. The proceeds from the fresh issue will be utilized to bolster the company’s Tier-I capital, aiding future lending activities and growth plans.
Key facts:
• Fresh Issue: ₹2,500 crore
• Offer for Sale: HDFC Bank selling shares worth ₹10,000 crore
• Parent Stake Pre-IPO: 94.36%
• IPO Size: Biggest IPO by a non-banking financial company (NBFC) in India; ranks fifth among all Indian IPOs.
• Listing Mandate: In accordance with the Reserve Bank of India’s directive for upper-tier NBFCs to go public.

Regulatory and Market Context

SEBI’s approval came as part of a batch of six IPO clearances, including companies from sectors such as solar energy and specialty chemicals. For HDB Financial, the timing is crucial: the RBI’s October 2022 guidelines require all “upper-layer” NBFCs—those with significant size and systemic importance—to be listed on stock exchanges by September 2025. This regulatory push aims to enhance transparency, governance, and market discipline among large non-banking lenders.
The IPO also marks the first public float from the HDFC group since its last listing seven years ago, underscoring the significance of this event for both the group and the broader financial sector.

Company Profile and Growth

Established in 2007, HDB Financial Services has expanded to become one of India’s leading NBFCs, operating through a network of more than 1,680 branches across the country. The company offers a mix of secured and unsecured loans, catering to retail and small business customers. As of March 2025, HDB Financial reported a loan book of ₹1.07 trillion and a net worth of approximately ₹13,300 crore.
In the most recent financial quarter, the company posted a profit of ₹5.5 billion and net revenue of ₹26.2 billion, reflecting robust operational performance and a strong foundation for future growth.

Implications for HDFC Bank and Investors

For HDFC Bank, this IPO represents a calculated move to unlock the value of its NBFC arm while meeting regulatory mandates. By selling a portion of its stake through the offer for sale, the bank can boost its capital position and concentrate more on its primary banking activities.
From an investor’s perspective, the HDB Financial IPO provides an opportunity to invest in a prominent NBFC with a broad national presence, solid backing from its parent company, and a consistent growth history. The listing will also enhance transparency and governance, as the company becomes subject to public market scrutiny and disclosure norms.

Industry and Peer Comparison

The IPO landscape for NBFCs has been relatively quiet in recent years, making HDB Financial’s public issue a landmark event. Its size—both in terms of capital raised and loan book—places it among the top-tier NBFCs in India, rivaling other listed entities in the sector. The company’s diversified loan portfolio, extensive branch network, and focus on retail lending position it well to benefit from India’s ongoing economic growth and rising consumer credit demand.

What’s Next?

With SEBI’s approval in hand, HDB Financial Services is expected to proceed with the IPO launch in the coming months. The company will finalize its offer price, engage with institutional and retail investors, and complete the listing process on the BSE and NSE. The fresh capital will be deployed to support lending growth, enhance technology infrastructure, and meet evolving regulatory requirements.

Conclusion

The SEBI nod for HDB Financial Services’ ₹12,500 crore IPO sets the stage for a transformative chapter in the company’s journey and the Indian NBFC sector at large. By combining regulatory compliance, capital infusion, and enhanced market visibility, the IPO is poised to create value for HDFC Bank, HDB Financial, and a new generation of public investors. As the financial services landscape continues to evolve, this listing will be closely watched as a bellwether for future NBFC public offerings.

 

 

 

 

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Warburg Pincus Secures CCI Green Light for Major Stake in IDFC First Bank

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UGRO Capital Acquires Profectus Capital in Ambitious ₹1,400 Crore Deal
Market News - June 2, 2025

UGRO Capital’s ₹400 Crore Rights Offering to Drive Growth in MSME Finance

UGRO Capital’s ₹400 Crore Rights Offering to Drive Growth in MSME Finance

Empowering Shareholders and Strengthening Growth in India’s MSME Finance Landscape

Introduction

UGRO Capital, a leading DataTech-driven non-banking financial company (NBFC) focused on micro, small, and medium enterprises (MSMEs), has unveiled plans for a significant capital infusion through a rights issue. The company aims to raise ₹400 crore by issuing new equity shares at ₹162 apiece, directly offering its existing shareholders the opportunity to participate in its next phase of growth. This move follows a robust fiscal year and a recent preferential issuance of ₹915 crore in compulsorily convertible debentures (CCDs), further solidifying UGRO’s financial foundation.

The Rights Issue: Structure and Rationale

Shareholder-Centric Approach
For every 189 shares owned, shareholders are entitled to purchase 50 new shares at ₹162 each. This pro-rata mechanism ensures that all public shareholders can maintain their stake and avoid dilution as the company expands its operations.
Pricing and Market Context
The issue price of ₹162 per share is notably below the recent market price, which stood at ₹177.45 on the Bombay Stock Exchange at the time of announcement. This pricing strategy is intended to make the offering attractive and accessible, reinforcing the company’s commitment to equitable participation and inclusive growth.

Key Dates and Process

Record and Subscription Periods
The subscription window will open on June 13 and close on June 20, 2025, with the possibility of an extension by up to 30 days if needed. This timeline provides shareholders with a clear and fair opportunity to participate in the capital raise.

Strategic Imperatives Behind the Fundraise

Scaling Up MSME Lending
UGRO Capital’s primary objective is to accelerate its lending to India’s underserved MSME sector. The company has been consistently adding ₹3,000 crore to its assets under management (AUM) annually, reflecting strong demand for its tailored credit solutions. The fresh capital from the rights issue will enable UGRO to further scale its asset book and expand its national footprint.
Strengthening DataTech Edge
As a DataTech-driven NBFC, UGRO Capital leverages advanced analytics and digital platforms to assess creditworthiness and streamline loan disbursement. The capital injection will fund continued technology upgrades, improving both operational performance and customer satisfaction.

Institutional Confidence and Management Commitment

Backing from Global and Domestic Investors
The rights issue has already attracted strong commitments from both institutional and internal stakeholders. Significantly, IFU has committed ₹150 cr, with UGRO’s promoters, promoter group, and employees together pledging ₹34 cr.
This robust backing underscores the confidence that both external and internal investors have in UGRO’s growth strategy.
Management’s Vision
Shachindra Nath, Founder and Managing Director of UGRO Capital, highlighted that this fundraising is crucial for sustaining the company’s expansion trajectory.
By offering shareholders the same price as institutional investors, UGRO is ensuring that all stakeholders can participate in the company’s future success.

Financial Performance and Growth Trajectory

Record Growth in FY25
UGRO Capital’s financial results for fiscal year 2024–25 highlight a period of remarkable expansion. The company’s AUM surged to ₹12,003 crore, while its profit before tax more than doubled to ₹203 crore. This performance reflects both the strength of its business model and the growing demand for MSME finance in India.
Healthy Capital Adequacy
Despite rapid growth, UGRO has maintained a healthy capital adequacy ratio, ensuring that it remains well-positioned to meet regulatory requirements and continue its expansion. The rights issue will further bolster this ratio, providing additional headroom for future lending.

The Broader Impact on India’s MSME Sector

Addressing the Credit Gap
India’s MSME sector is widely recognized as the backbone of the economy, yet it continues to face a significant credit gap. UGRO Capital’s focus on leveraging technology to serve this segment is helping to bridge this gap, enabling more small businesses to access timely and affordable finance.
Supporting Economic Recovery and Job Creation
By expanding its lending capacity, UGRO Capital is contributing to broader economic recovery and job creation. MSMEs play a critical role in employment generation, and improved access to finance can unlock their potential to drive inclusive growth.

Looking Ahead: Future Plans and Ambitions

Market Share Targets
UGRO Capital aims to secure a 1% share of India’s MSME lending market within the next three years.
Achieving this target will require continued investment in technology, talent, and distribution networks—all of which will be supported by the proceeds from the rights issue.
Innovation and Partnerships
The company is also exploring new partnerships and innovative product offerings to further differentiate itself in the competitive NBFC landscape. By staying at the forefront of DataTech and customer-centric solutions, UGRO aims to solidify its position as a leader in MSME finance.

Conclusion

UGRO Capital’s ₹400 crore rights issue represents a significant milestone in the company’s growth trajectory.
By empowering existing shareholders to participate in its growth, UGRO is reinforcing its commitment to inclusive finance and sustainable expansion. The strong backing from institutional and internal investors, coupled with robust financial performance and a clear strategic vision, positions UGRO Capital for continued success in India’s dynamic MSME lending market.

 

 

 

 

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Kia India Posts 14.43% Yearly Sales Growth in May 2025

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Zerodha Capital's FY25 Net Profit Soars 78%, Plans to Expand Credit Offerings
Result Updates - May 30, 2025

Zerodha Capital's FY25 Net Profit Soars 78%, Plans to Expand Credit Offerings

Zerodha Capital’s FY25 Net Profit Soars 78%, Plans to Expand Credit Offerings

 

Zerodha’s NBFC subsidiary posts strong profit gains and reveals plans to broaden its business by expanding loan offerings.

Introduction

Zerodha Capital, the non-banking finance subsidiary of India’s leading stockbroking firm Zerodha, has reported a remarkable 78% increase in its net profit for the fiscal year 2024-25. This significant growth underscores the company’s strong financial performance and sets the stage for its strategic expansion into the credit segment.

Financial Performance Overview

For the fiscal year ending March 2025, Zerodha Capital achieved a net profit of ₹12.5 crore, up from ₹7 crore in the previous year. The company’s total revenue doubled to ₹36 crore, reflecting a substantial increase in its lending activities and operational efficiency.
This growth is attributed to the company’s innovative approach in offering loans against securities, providing clients with a seamless and efficient borrowing experience. The rise in both revenue and earnings reflects Zerodha Capital’s successful approach and its skill in leveraging emerging market trends.

Strategic Focus on Credit Expansion

Looking ahead, Zerodha Capital is focusing on scaling up its credit offerings to diversify its revenue streams and strengthen its position in the financial services market. The company plans to introduce term loans in the near future, expanding its product portfolio to cater to a broader range of customer needs.
Currently, Zerodha Capital offers loans against securities, utilizing a wide array of over 1,300 approved securities as collateral. This approach allows clients to leverage their existing investments to secure financing at competitive interest rates, typically around 11.5% per annum. The average loan size stands at approximately ₹6 lakh, with a minimum loan value of ₹25,000.

Market Position and Competitive Advantage

Zerodha Capital’s unique value proposition lies in its ability to provide quick and efficient loan disbursements, often transferring funds to clients’ bank accounts within a single working day. This efficiency is facilitated by the company’s digital platform, which streamlines the loan application and approval processes.
The company’s focus on leveraging technology and its strong brand association with Zerodha, a well-established name in the Indian financial market, provides it with a competitive edge in the lending space. By offering transparent and customer-centric services, Zerodha Capital aims to build long-term relationships with its clients and expand its market share.

Future Outlook

As Zerodha Capital continues to grow, it remains committed to enhancing its product offerings and expanding its reach. The planned introduction of term loans is expected to attract a new segment of borrowers, further diversifying the company’s customer base.
Additionally, Zerodha Capital is exploring partnerships with other financial institutions and fintech companies to broaden its distribution channels and enhance its service delivery. Through continuous innovation and a strong focus on customer needs, Zerodha Capital is well-positioned to emerge as a leading force in India’s lending sector.

Conclusion

Zerodha Capital’s impressive financial performance in FY25 reflects its strong operational capabilities and strategic vision. With plans to expand its credit offerings and leverage technology to improve customer experience, the company is well-positioned for sustained growth in the competitive Indian financial services market.

 

 

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NBCC’s Financial Triumph: Q4 Profit Jumps and Revenue Steadily Rises

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₹130 Crore NCD Boost Positions Standard Capital for Market Upswing
Market News - May 15, 2025

₹130 Crore NCD Boost Positions Standard Capital for Market Upswing

₹130 Crore NCD Boost Positions Standard Capital for Market Upswing

 

Non-banking lender raises funds via private NCD issue to strengthen operations, reduce liabilities, and support future business expansion.

Commencing Discourse: A Micro-Cap Non-Banking Financial Entity Initiates a Deliberate Financial Maneuver.

Standard Capital Markets Limited (SCML), a non-banking financial company (NBFC) listed on the Bombay Stock Exchange (BSE), has announced the successful allotment of non-convertible debentures (NCDs) worth ₹130 crore. This strategic capital move comes as the company aims to enhance its financial foundation and invest in its long-term development goals. The fundraising effort is seen as a significant step forward for SCML, especially considering its status as a penny stock with a market value of less than ₹1 per share.

Company Overview: A Glimpse into SCML’s Operations

SCML has carved out a niche in India’s financial services industry. As an NBFC, it provides a broad suite of services, including investment advisory, financing solutions, and lending operations. The company has developed a strong presence in the capital markets, leveraging its financial expertise to serve both retail and institutional clients.

Over the last five years, SCML’s stock has appreciated over 900%, a notable achievement for a firm trading in the penny stock category. This pronounced escalation underscores a burgeoning appetite among capital allocators and a strengthening conviction within the financial sphere regarding the progressive trajectory of its operational architecture. Despite being undervalued in price terms, the stock has delivered substantial returns, capturing the attention of seasoned market participants and retail investors alike.

Details of the NCD Issuance

During their latest convocation of directorial members, the entity known as SCML sanctioned the distribution of ten thousand guaranteed, privately held, and risk-assessed non-convertible debentures, individually valued at a lakh of Indian currency, these totaled a thousand million rupees. This followed an earlier issuance of 1,500 NCDs worth ₹15 crore, bringing the total raised via this route to ₹130 crore. These NCDs were issued on a private placement basis, meaning they were not made available to the general public but rather offered to selected institutional and high-net-worth investors.

The NCDs are structured to offer regular interest payouts to investors, a common feature of such instruments. Although unlisted and unrated, their secured nature indicates that the issuance is backed by specific assets or guarantees, which could provide a layer of safety to subscribers.

Utilization of Funds: Driving Operational Efficiency and Growth

SCML intends to channel the funds toward several key areas of business. A major portion will go into strengthening its operational backbone—investing in technology upgrades, enhancing digital platforms, and expanding service reach. These improvements are essential to improving the overall customer experience and maintaining competitiveness in a crowded NBFC market.

In addition to operational improvements, the company will use the proceeds to address working capital needs. This includes managing short-term expenses, paying off certain liabilities, and optimizing the capital structure. The funding will also help SCML improve its credit portfolio and increase its lending capabilities, enabling it to serve a larger base of clients.

The strategic deployment of these funds is aimed at not just maintaining, but accelerating the company’s growth trajectory over the coming years. SCML’s management believes this capital raise will support scalability and help it penetrate new markets and segments.

Market Performance: Stock Movement and Investor Sentiment

Following the announcement of the NCD allotment, SCML’s stock showed minor fluctuations and was last reported trading at ₹0.80 per share. While this represents a slight dip, the broader performance of the stock over the years remains impressive. Investors who entered at earlier stages have witnessed exponential returns, and the recent capital raise has reaffirmed market confidence in the company’s future.

The relatively stable stock behavior post-announcement indicates that the market had already factored in expectations of a capital infusion. However, further upward movement is likely if the funds are utilized effectively and the company reports improved quarterly results in the near future.

Regulatory Landscape: RBI’s Guidelines on NCDs

Over the span of recent fiscal cycles, the authoritative bodies overseeing the initial placement of non-equity convertible debt instruments have instituted a more formalized system of operational mandates. The RBI has recalibrated the private debt issuance norms for HFCs to mirror the existing framework for NBFCs, thereby fostering regulatory alignment. These reforms aim to bring about uniformity in the issuance process, improve transparency, and protect investor interests.

For companies like SCML, these regulatory changes provide clarity and create a level playing field. They also ensure that investors in instruments like NCDs are well-informed and protected by standardized compliance requirements. While SCML’s NCDs are unlisted and unrated, adherence to regulatory norms plays a crucial role in sustaining investor trust and mitigating financial risk.

Conclusion: Strategic Capital Raising Positions SCML for Future Growth

SCML’s decision to raise ₹130 crore through a private placement of NCDs represents a well-planned step in its journey toward long-term financial sustainability and market leadership. The company’s ability to attract substantial investment despite being a penny stock underscores its credibility and the confidence investors have in its operational model.

As the company works toward executing its expansion plans and utilizing the funds judiciously, market analysts and stakeholders will closely track key performance indicators in upcoming quarters. If SCML successfully translates this capital infusion into tangible results, it could potentially transition from a penny stock to a more mainstream financial player.

The NCD issuance is not just a fundraising activity—it’s a strategic move that could redefine the company’s growth path and reputation in India’s NBFC landscape.

 

 

 

 

 

 

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Tata Capital Delivers Robust Q4 Surge as IPO Momentum Builds

 

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CRISIL sees strong 12–13% credit growth ahead
Economy - April 17, 2025

CRISIL sees strong 12–13% credit growth ahead

CRISIL sees strong 12–13% credit growth ahead

 

It is anticipated that the expansion of credit will positively impact the banking sector in India. The credit rating agency CRISIL Ratings has predicted a 12–13% increase in bank lending for the fiscal year 2025–2026 (FY26) due to the renewed optimism in the Indian economy. Numerous factors, including reduced interest rates, tax breaks, increased consumption, and loosened regulations, all support this growth forecast.
Compared to the expected 11–11.5% increase in FY25, the projected growth is an improvement, suggesting that India’s financial ecosystem may be about to enter a more expanding phase.

One important catalyst is regulatory support.

The Reserve Bank of India’s (RBI) regulatory relaxation is one of the main factors contributing to this positive outlook. Credit prospects have improved dramatically, especially with the rollback of the 25 percentage point risk weight hike on bank loans to specific Non-Banking Financial Companies (NBFCs), which goes into effect on April 1, 2025. It is anticipated that this regulatory change will increase banks’ capital adequacy and increase lending to NBFCs, which are essential in helping last-mile borrowers.

Increased Consumption as a Result of Tax Benefits

New tax benefits were implemented in the Union Budget 2025–2026, which mostly benefited middle-class and salaried individuals. It is anticipated that these incentives will enhance consumer consumption, which will raise demand for retail loans—particularly home, auto, and personal loans. As per CRISIL’s projection, retail credit—which accounts for approximately 31% of overall bank lending—is anticipated to grow by 13–14% in the fiscal year 2026, marking an increase from the 12% growth expected in FY2025.
Increased discretionary income from lower personal income taxes also helps customers become more creditworthy and encourages them to take up loans for expensive things like homes, cars, and schooling.

Interest rates and monetary policy

A key contributor to the optimistic credit outlook is the Reserve Bank of India’s decision to lower the repo rate by 25 basis points, reducing it to 6%. Monetary accommodation is shown by the central bank’s softer attitude, which lowers borrowing costs for both individuals and companies.
In general, lower interest rates make it more affordable for consumers to get credit and for firms to fund capital expenditures, which increases demand for loans. This rate reduction follows a protracted period of rate increases meant to curb inflation, indicating a change in the central bank’s emphasis to promoting growth.

Sectoral Outlook and Corporate Lending

Corporate credit, which makes up roughly 41% of all bank credit, is predicted to expand by 9–10% in FY26, up from about 8% in FY25, while retail loans are likely to grow consistently. The credit rating agency observes a recovery in private sector investments, especially in capital-intensive industries that significantly rely on institutional financing, like steel, cement, aluminum, and infrastructure.
Increased bank funding is also anticipated to help NBFCs. The RBI’s loosened risk weights will allow banks to fund NBFCs more freely, promoting overall credit expansion after a halt brought on by stricter regulations and increased risk assessments.

Lending to MSME and Agriculture

With the support of government incentives like loan guarantee programs and priority sector lending mandates, as well as strong demand, credit growth to MSMEs is predicted to stay strong at 16–17%.
Depending mostly on monsoon performance, the agriculture sector may have loan growth of 11–12% in the interim. Due to the need for farm inputs, mechanization, and rural consumption, the demand for rural loans will continue to rise if monsoons are typical and crop production stays constant.

Growth of Deposits: A Juggling Act

Mobilizing deposits is one of the main obstacles banks may encounter in maintaining credit development. Deposit growth has been comparatively moderate in FY25 because of restricted systemic liquidity, which is necessary to enable credit expansion.
However, the RBI’s recent liquidity initiatives are starting to relieve some of the pressure on the banking system. As interest rates on deposits progressively rise, deposit growth is anticipated to catch up. Banks can lend sustainably without affecting their credit-deposit ratio or jeopardizing their financial stability if they have a strong deposit base.

Obstacles & Hazards to Come

Even while the outlook is mostly favorable, some domestic and international dangers could nevertheless put doubt on it:
• Uncertainty in the world economy, particularly if developed markets experience financial instability or slowdowns.
• Geopolitical conflicts that might impact oil prices and raise India’s inflation rate.
• Risks associated with credit quality, particularly in the unsecured retail lending market.
• A slower-than-expected increase in deposits, which would limit banks’ capacity to lend.
Notwithstanding these reservations, the Indian economy’s structural strength, together with proactive regulatory actions and financial assistance, instills optimism that the banking industry would continue to grow steadily.

Conclusion

The 12–13% loan growth forecast by CRISIL for FY26 is encouraging for the Indian banking sector and the overall economy. The industry appears well-positioned to lead the next phase of economic expansion because to accommodative monetary policy, retail lending fueled by spending, regulatory flexibility, and a recovery in corporate credit. But sustaining this upward trend will require ongoing attention, particularly in the areas of deposit growth and credit quality.

 

 

 

 

 

 

 

 

 

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Business, Equities, Markets - January 27, 2025

The stable growth of Shriram Finance driven by policy aid and balance credit mix

The stable growth of Shriram Finance driven by policy aid and balance credit mix

Shriram Finance remains the biggest Non-Banking Financial Company in the retail segment. Its current market price is about Rs. 527 and market capitalisation is around Rs. 99,157 crore. The ratings given to the stock is over-weight.

The performance of the company was affected by a hike in operating spendings and provisions. Despite the prevailing contraction in the industry, the quality of assets of the company continued to be strong due to a healthy balance of different credits.

Performance of the stock
During the period of the previous three months, the shares of the company recorded a decline of about 19 percent. Since 10th January, 2025, the stock has traded in accordance with a new split basis as it was split into a ratio of 1:5.

Healthy credit mix
The commercial auto industry is facing a declining trend in the present times. Despite this, the growth in AUM was higher than predicted due to a rise in loans taken for passenger vehicles, MSME, and two-wheelers.

The progress in medium and heavy commercial vehicles was not much due to bad weather conditions, prolonged elections, and also due to contraction in spending on infrastructure. In contrast to this, the two-wheelers and Passenger vehicles recorded a strong growth potential. Further, rise in rural consumption levels lead to boost to growth in demand for farm equipment and tractors.

There is a potential for Commercial vehicles to grow in case of increase in market activity. Apart from this, the growth in loans for the non-auto segment will lead to expansion of credit growth. The company recorded a consecutive fall in the gold loans segment. Despite this, it is anticipated to record a slight hike in the growth following the fourth quarter of the financial year 2025. The company expects its AUM to grow in the range of 15 to 20 percent.

Sale of its subsidiary
In the month of December 2024, the company sold shares of about 84.44 percent of its housing finance subsidiary to Warburg Pincus. The sale was worth about Rs. 3,929 crore. The money acquired from the sale of the subsidiary will help to finance its further growth in its key business areas having high returns. It will give an opportunity to the company to focus on growth of operations which give high returns to the company.

This sales agreement helped the company to raise its capital adequacy ratio to about 84 basis points on a quarter-on-quarter basis in the third quarter of the current financial year. The sale of the housing finance subsidiary of the company led to a special profit of about Rs. 1,489.39 crore to the company after deduction of its taxes.

Performance of asset class
In midst of tension across the industry, the company was able to maintain low cost of loans. The reason for this is efforts taken regarding collection of loan amounts and loan approvals. This has resulted in a good quality of assets of the company. The company has maintained a target of keeping the cost of loans below the range of 2 percent. The company was able to keep its loan cost in the range of 1.85 percent.

Performance of NIMs
Even though the loan cost is low and stable returns observed by the company, the contraction in net interest margins was recorded. The reason for this is surplus liquidity in the company. In the fourth quarter of the current financial year, the company is projected to record a hike of 20 basis points in the net interest margins, when the issues of cash flow are resolved. The expansion in assets with higher returns will help to improve net interest margins. Further, the possibility of RBI reducing interest rates will help in the progress of the company.

In the third quarter of the financial year 2025, the cost of employees and other overhead was spiked. This resulted in the expansion of the cost-to-income ratio of the Shriram Finance company compared to being in range of about 28 percent in the current financial year. Further, the ratio is anticipated to fall in the financial year 2026. The reason for this is progress in digitization and productivity of the company.

In addition to this, expansion of NIMs, stable loan cost and a healthy growth in AUM will lead to boost to Return on Equity (ROE) of the company.

Projection
Shriram Finance was able to tackle the prevailing economic challenges in the economy. It was able to outshadow its competitors. One of the reasons for this is power to set prices as it has a strong position in the rural areas and financing of used vehicles segments. It also has the advantage of selling extra products to their existing consumers.

Following its merger, the company is able to diversify its services resulting in better risk management and not depending on one type of financing only.

Further, the recovery would be observed in the commercial vehicles segment due to rise in rural demand and better macroeconomic situation. It is also due to growth in logistics operations due to good monsoon and expansion in infrastructure expenditure in the first half year of the financial year 2026.

In present times, the company’s stock price is about 1.8 times compared to its projected book value for the financial year 2026. Further, the current fall in the stock price can act as a chance for long-term investors to purchase and hold the stock.

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Business, Equities, Markets - January 14, 2025

NBFC & HFC Loan Growth to Slow in FY25 Amid Softer Demand and RBI Norms

NBFC & HFC Loan Growth to Slow in FY25 Amid Softer Demand and RBI Norms

Overview
A Jefferies study projected that the loan growth of Indian Non-Banking Financial Companies (NBFCs) and Housing Finance Companies (HFCs) (apart from Infrastructure Finance Companies (IFCs)) would slow to 17% in FY25 from 21% in FY24. According to the research, this moderation is the result of softer macroeconomic conditions, which have led to a decline in loan demand. It predicted that growth would level off and settle at healthy levels in FY26e. It predicted that growth would level off and settle at healthy levels in FY26e. With the exception of IFC, we anticipate that sector loan growth will slow to 17% in FY25e (compared to 21% in FY24) and level off around these levels in FY26e. Additionally, according to an article published in the Economic Times, most lenders recorded reduced credit growth in the three months due to a combination of factors, including slower consumer demand, risk aversion toward unsecured loans, and lackluster deposit growth until late into the December quarter.

RBI’s guidelines on lending to NBFCs led to a slowdown in credit growth
According to the research, this moderation has been aided by a cyclical downturn in industries like automobiles as well as decreased lending to unsecured and microfinance loans (MFI), in accordance with RBI advice.

In November of last year, the RBI released guidelines on the NBFC’s lending criteria which increased risk weights on bank funding to NBFCs. This acted as the preliminary reason behind the slowing down in credit growth. The shadow banks diversified their funding sources as a result of this action. These days, NBFCs are more often using the domestic capital market to raise money through bonds and the international market to access dollar bonds and syndicated loans. Put this in figures, compared to a 19% increase in the same time in 2023, lending growth to the NBFC sector fell to 7.8% year-over-year in the two weeks ended November 29, 2024. As a result of this slowdown, sectoral deployment data issued by the RBI showed that credit growth to the services sector decreased from 22.2% year over year to 14.4%.

In absolute terms, credit to the NBFC sector was Rs 15.75 trillion at the end of the two weeks ending November 29, 2024, as opposed to Rs 15.48 trillion at the end of the two weeks ending March 22, 2024, according to RBI data. In its most recent “trend and progress report,” the RBI emphasized that NBFCs must further diversify their funding sources as a risk mitigation tactic because, notwithstanding recent moderation, their reliance on banks is still significant.

Jefferies report further stated that during 1HFY25e, growth moderation was comparatively milder in other areas, although it has been significant in unsecured PL, consumer lending, and MFI.

According to the RBI’s Financial Stability Report, shadow bank loan growth slowed to 6.5% on a half-year-on-half-year (H-O-H) basis in September 2024 after the RBI increased risk weights on NBFC lending to specific consumer credit categories and bank lending to NBFCs. The RBI claims that the upper-layer NBFCs segment, which is mainly made up of NBFC-Investment credit companies and has a large percentage of retail lending (63.8%) in its loan book, was where the effects of the credit moderation were most noticeable. Nonetheless, middle-layer NBFCs—apart from government-owned NBFCs—maintained strong credit growth, particularly in portfolios of retail loans.

Additionally, private placement is the preferred method for bonds listed on reputable exchanges, and NBFCs continue to be the biggest issuers in the corporate bond market. NBFCs tried to diversify their funding sources by issuing more listed non-convertible debentures (NCDs) in the face of a slowdown in bank direct lending. In order to diversify their funding sources and keep total expenses under control, NBFCs are now taking out more foreign currency loans. Nevertheless, the RBI has issued a warning that, to the extent that these NBFCs remain unhedged, the increase in foreign currency borrowings may present currency concerns.

Asset Under Management of NBFCs on a decline
According to the research, NBFCs’ Asset Under Management (AUM) growth is anticipated to decrease to 20% in FY25 from 24% in FY24. HFCs might, however, experience better AUM growth, increasing from 11% in FY24 to 12–13% in FY26. Further, economic activity is expected to rise in FY26, which would help stabilize growth in the sector.For the FY25–27 period, the coverage AUM (excluding IIFL) is expected to grow at a CAGR of 19%, which is slightly higher than the 18% predicted for FY25. As of September 2024, the growth in loans for Housing Finance Companies (HFCs) and NBFCs has decreased from 22% in March 2024 to 20%.

Further, the slowdown has been most noticeable in consumer financing, MFI loans, and unsecured personal loans, while growth in other areas has slowed down somewhat in the first half of FY25. About 30% of NBFC and HFC lending is provided by infrastructure finance companies (IFCs), whose share of the sector’s asset under management (AUM) growth slowed to 15% in September 2024 from 18% in March 2024.

Sectoral credit growth trends to follow in 2025
By segment, incremental growth trends in 2025 are probably going to differ. Auto loans and other segments are forecast to stabilize and possibly pick up if macroeconomic conditions improve as planned, the research noted, even if growth in unsecured loans and MFI loans is predicted to remain muted throughout the first half of the year.

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Business, Equities, Market News, Markets - October 18, 2024

RBI Bars Four NBFCs for Regulatory Breach

RBI Bars Four NBFCs for Regulatory Breach

RBI Suspends Four NBFCs from Loan Issuance: A Regulatory Crackdown
In a significant regulatory move, the Reserve Bank of India (RBI) has prohibited four non-banking financial companies (NBFCs) from issuing new loans. The action follows these firms’ violations of regulatory norms related to lending practices, signaling the central bank’s growing vigilance toward the sector.

The four entities impacted by the RBI’s order are:

Muthoot Microfin Ltd
Handygo Technologies Pvt Ltd
Vibrant Microfinance Ltd
Pai Power Solutions Pvt Ltd
This development has far-reaching implications, given the crucial role of NBFCs in extending credit, especially to underserved segments such as small businesses and low-income households.

Reasons Behind the Regulatory Action
The RBI has not disclosed the precise nature of each company’s violations. However, it indicated that the affected NBFCs breached guidelines governing fair lending practices and responsible operations. These norms are critical to ensuring transparency, borrower protection, and financial stability within the sector.

Given the RBI’s emphasis on systemic health, even relatively minor lapses in governance, documentation, or compliance can attract swift punitive actions. Analysts speculate that the infractions could involve issues such as improper loan underwriting, failure to maintain sufficient capital buffers, or mismanagement in lending portfolios.

Implications for the NBFC Sector
The RBI’s regulatory action sends a clear message to the broader NBFC ecosystem. As financial intermediaries with less stringent regulatory oversight compared to banks, NBFCs have expanded aggressively in recent years. However, this growth has heightened concerns over asset quality and operational transparency.

For investors, the incident highlights the risks associated with non-bank lenders. Companies that fail to maintain proper compliance structures risk not only regulatory action but also a deterioration in market reputation. On the other hand, NBFCs that demonstrate robust governance may find it easier to attract capital and enhance customer trust.

This crackdown may prompt other NBFCs to reassess their processes and tighten internal controls to avoid similar repercussions. Furthermore, it underscores the importance of regulatory arbitrage—a phenomenon where NBFCs operate with fewer restrictions relative to banks—remaining in check.

Impact on Credit Flow and Borrowers
The immediate impact of the ban is expected to be limited to the operations of the four affected NBFCs. However, if systemic tightening across the sector follows, it could temporarily disrupt the flow of credit to small businesses and individuals who rely heavily on non-bank lenders.

Additionally, the affected companies will likely experience increased scrutiny from stakeholders, including investors and rating agencies. Operational constraints may also hinder their ability to grow loan portfolios, further constraining profitability.

Broader Market Implications
The regulatory crackdown aligns with the RBI’s broader objective of maintaining financial discipline across the financial services ecosystem. With the sector growing rapidly, the central bank’s proactive stance aims to mitigate risks that could destabilize the economy.

NBFCs play a vital role in filling credit gaps left by traditional banks, especially in rural and semi-urban areas. However, incidents like these highlight the need for robust compliance frameworks to ensure that the sector continues to grow sustainably.

Conclusion
The RBI’s ban on four NBFCs from issuing loans serves as a reminder of the importance of regulatory adherence within India’s financial system. It demonstrates the central bank’s focus on strengthening governance practices in non-bank lending to protect borrowers and investors.

For the affected NBFCs, the path forward will require addressing the compliance gaps identified by the regulator. On a broader level, this regulatory action reinforces the need for financial institutions to operate transparently while balancing growth with sound governance.

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