Q1 FY25 Performance of InCred Financial

Document Summary

InCred Financial Services Limited Performance Update Q1 FY25.

InCred Overview:

InCred acquired its NBFC license and hired a leadership team between 2016-18, launching 2 retail and 3 MSME products and raising INR 585 Cr of equity. The employee count reached over 100, and the company was profitable in its first year of operations in 2017. By 2019-20, InCred had raised INR 427 Cr through marquee investors, and its employee base grew to 500+. Between 2021-25, InCred raised approximately INR 500 Cr, becoming the second Unicorn produced in India in 2023. The company's rating was upgraded to AA-/Stable by CRISIL. The merger of KKR India and InCred was successfully completed in July 2022. InCred has over 400,000 customers, employs over 1,800 people, and operates through 70+ branches. The company has a long-term rating of 'AA-' by CRISIL & ICRA with a Stable outlook. As of Q1 FY25, Asset under Management is INR 9,416 Cr.

Robust Performance Q1 FY25:

In Q1 FY25, InCred Financial Services Limited showcased robust financial performance. The Asset under Management (AUM) stood at INR 9,416 Cr, while the net worth was INR 3,420 Cr. The company reported a profit before tax (PBT) of INR 126 Cr and a profit after tax (PAT) of INR 93 Cr. The GNPA/NNPA ratio was 2.1%/0.8%. The Return on Assets (ROA) was 5.5% (PBT) and 4.1% (PAT). The Capital to Risk Asset ratio was 32%, the LCR (Liquidity Coverage Ratio) was 367%, and the Debt to Equity ratio was 1.5x.

Key Benefits of Diversified Product Portfolio:

A diversified product portfolio helps in risk minimization, safeguarding from macro and external risks, while enabling significant growth opportunities at reasonable risk-reward in existing products. It fosters opportunity to grow by expanding the existing portfolio through deepening presence across geographies and tactically growing product lines depending on market opportunity. Liability management is achieved through creating a borrowing basket with a balanced mix of long and short-term liabilities, supported by diversified sources of lenders.

Tech Enabled Business Processes:

InCred has technology backbone design for multi-product play and scalability focus. There is access application anytime and from anywhere. It's scalable to handle millions of transactions seamlessly. Near real-time data availability for all critical business functions. Fast product launches and quick integration with third-party providers.

Financial Performance (FY21 - Q1 FY25):

The report provides a table of financial performance parameters from FY21 to Q1 FY25. The AUM increased from INR 2,645 Cr in FY21 to INR 9,416 Cr in Q1 FY25. Net worth grew from INR 1,046 Cr in FY21 to INR 3,420 Cr in Q1 FY25. Debt increased from INR 1,673 Cr in FY21 to INR 5,111 Cr in Q1 FY25. Net Interest Income was INR 232 Cr in Q1 FY25. Profit before Tax was INR 126 Cr in Q1 FY25. The CRAR was 32%, the Debt/Equity ratio was 1.5x, GNPA was 2.1%, and NNPA was 0.8% in Q1 FY25.

Structural Liquidity:

As of June 2024, InCred's LCR (Liquidity Coverage Ratio) stood at 367%. A cumulative GAP (%) for different time buckets, ranging from 1-14 days to Beyond 5 years, illustrates prudent liquidity management leading to cumulative positive gap in all buckets.

Shareholding Structure:

As of June 2024, key shareholders of InCred Holdings Ltd include KKR Consortium (29.5%), Bhupinder Singh (18.8%), Ranjan Pai (Manipal Group) (10.7%), OAKS Assets Management (7.0%), Anshu Jain (3.2%), Moore Strategic Ventures (2.0%), Dalmia Group (1.6%), and Elevar Equity (1.6%).

Board of Directors: The board includes independent directors, non-executive directors, and executive directors with experience in finance and banking.