A DESK RESEARCH REPORT

ON
NON-BANKING FINANCIAL INSTITUTIONS (NBFC’S)

SUBMITTED TO
SAVITRIBAI PHULE PUNE UNIVERSITY, PUNE

IN PARITAL FULFILLING OF THE REQUIREMENT

FOR THE AWARD OF THE DEGREE
MASTER OF BUSINESS ADMINISTRATION

SUBMITTED BY
A07 MR. ANURAG GODSE
A14 MR. DEVEN JADHAV
A31 MS. RITUJA KOKATE
A40 MR. KRISHNAKANTH MANIYAR
A44 MR. DRUSHYA NAIR

GUIDED BY
DR. NAMRATA DESHMUKH

MET’S INSTITUTE OF MANAGEMENT,

BHUJBAL KNOWLEDGE CITY, ADGAON, NASHIK
AY 2024-25
 INDUSTRY ANALYSIS REPORT
ON
NON-BANKING FINANCIAL INSTITUTIONS
(NBFC)

ROLL NO. NAME

A07 MR. ANURAG GODSE
A14 MR. DEVEN JADHAV
A31 MS. RITUJA KOKATE
A40 MR. KRISHNAKANTH MANIYAR
A44 MR. DRUSHYA NAIR
 DECLARATION

We, the undersigned, hereby declare that the Desk Research Report titled "IndustryAnalysis
Report of Non-Banking Financial Institutions (NBFC)" has been prepared by us as part of
our academic requirements.

We affirm that:

 The content of this report is the result of our own independent research, analysis, and
interpretation.
 All sources of information, data, and ideas from other authors or materials have been
properly acknowledged and cited in accordance with academic standards.
 No part of this report has been copied or reproduced from any unauthorized source or
submitted elsewhere for any academic or professional purpose.

We understand that any form of academic dishonesty or plagiarism is a serious offense and
may result in disciplinary action.

ROLL NO. NAME SIGN

A07 MR. ANURAG GODSE

A14 MR. DEVEN JADHAV
A31 MS. RITUJA KOKATE
A40 MR. KRISHNAKANTH MANIYAR
A44 MR. DRUSHYA NAIR
 ACKNOWLEDGEMENT

We are pleased to present our group project titled “Desk Research: Industry Analysis of
Online Services-”, undertaken as part of our academic curriculum. This project has been a
valuable learning experience, and we would like to take this opportunity to express our
gratitude to all those who contributed to its successful completion.

First and foremost, we extend our sincere thanks to Dr. Namrata Deshmukh, our subject
mentor, for their expert guidance, constructive feedback, and continuous support throughout
the course of this research. Their insights have been instrumental in enhancing the depth and
relevance of our study.

We are also grateful to MET Institute of Management for providing us with the necessary
academic environment and resources that facilitated the smooth execution of this project.

Furthermore, we acknowledge the dedicated efforts and active collaboration of all our group
members. The commitment, research, and analytical contributions of each member played a
significant role in completing this project with quality and precision.

Group Members:
 INDEX

Chapter no. Particulars Page No.

Title Page
Index
Unit 1 : Industry Analysis – The Basics.
1.1 Nature of the Industry.
1.2 Players in the Industry.
1.3 Nature of Competition.
1.4 Market Share of Top Five and Bottom Five Players.
1.5 Possible classification of players into leaders.
1.6 Challengers.
1.7 Followers.
1.8 Niche.
1.9 Positioning and differentiation strategies of Key Players.
1.10 Branding Strategies.
1.11 Pricing Policies.
1 1.12 Cartilization . 8
1.13 Capacity Analysis.
1.14 Current Capacity Utilization rates.
1.15 Planned future capacity additions.
1.16 Geographical spread of plants/facilities/capacities.
1.17 Demand Supply balance in the Industry.
1.18 Key factors affecting Demand.
1.19 Key supply side constraints.
1.20 Professional Trade Bodies of the Industry.
1.21 Business Functions carried out Online by the Key Players.
1.22 Online Presence of the Players.
1.23 Incremental Innovation in the Industry.
1.24 Disruptive Innovations in the Industry
 Unit 2 : Promoters and Management Ethos.

2.1. Background of Promoter Group of Top Five and Bottom Five

Players in the Industry.

2.2. Management Ethos and Philosophy.

2.3 Brief Profile of CMD’s , CEO’s and Key Top Management

Personnel with their career highlights.
2 57
2.4. Detailed Profile of one distinguished Top Management Personnel
each from any two players in the Industry.

2.5. CSR Policy.

2.6. Corporate Governance Initiative.

2.7. Initiative towards Social Inclusion.

2.8. Initiative towards Environment Conservation.

Unit 3 : External Environment .

3.1. Controlling ministry and/or regulator if any for the Industry

3.2. Regulatory Policies at the state, national and global level and their
impact on the industry as a whole with analysis of impact on top 5 players
and bottom 5 players,

3.3. Key National and Global issues affecting the Industry.

3 3.4. Key initiatives by the Government to promote the Industry

3.5. Environmental Issues

3.6. CSR Initiatives

3.7. Regulatory actions against the players for e.g. Action by SEBI,
72
Competition Commission of India, MTRP Commission, FDA, etc. against
irregularities, legal violations.

Unit 4 : Financials:

4.1. Bajaj Finance

4.2. IRFC Ltd
4.3. Bajaj Holdings
4.4. Chola Invest
 Chapter 1
Industry Analysis
1.1Nature of Industry:

Non-Banking Financial Companies (NBFCs) in India are financial institutions that provide
various types of financial services but do not have a full banking license. While they operate
similarly to banks, they cannot accept demand deposits or offer services like savings accounts
or checking accounts. Non-banking financial companies (NBFCs) operate by raising funds
through deposits, loans, or other financial instruments, excluding traditional demand deposits.
NBFC companies in India lend to individuals, businesses, or other entities, often focusing on
specific sectors or niches. NBFCs earn revenue through interest on loans, fees, and other
financial services. Regulatory compliance, risk management, and maintaining liquidity are
essential aspects of their operations. NBFCs play a vital role in complementing traditional
banking services, catering to a diverse range of financial needs.

NBFCs are regulated by the Reserve Bank of India (RBI) and are an essential part of the
financial sector, particularly in extending credit to segments that may not be adequately
served by traditional banks. The Reserve Bank of India (RBI) regulates NBFCs through
specific guidelines and regulations, including the Non-Banking Financial Companies
(Reserve Bank) Directions, 2016. The framework ensures these institutions follow prudent
business practices and manage risks effectively. NBFCs are financial institutions that provide
banking services, but are not banks. They are registered under the Companies Act, 1956 and
are regulated by the Reserve Bank of India (RBI).

1.2Types of NBFCs in India

Listed below are a few types of NBFCs in India and their respective contributions to the
nation's financial landscape.
1. Asset Finance Companies (AFCs)

Asset Finance Companies, as the name suggests, primarily engage in financing assets such as
machinery, vehicles, equipment, and other tangible assets. AFCS cater to individuals, small
and medium-sized enterprises (SMEs), and corporates by offering customised financing
solutions for the acquisition of essential assets. By providing loans and lease options, AFCs
help businesses expand their operations while also promoting economic growth.

2. Loan companies

Loan Companies are significant players in the consumer finance sector, offering personal
loans, home loans, education loans, and more. Additionally, they extend credit facilities to
businesses in the form of working capital loans, trade finance, and project financing. Loan
companies fill the gap left by traditional banks by serving customers with specific financial
needs or limited access to formal credit channels.

3. Infrastructure Finance Companies (IFCs)

With the objective of funding infrastructure projects, IFCs play a crucial role in supporting
the nation's infrastructural development. IFCs primarily finance projects in sectors like
power, roads, telecommunications, and transportation. By providing long-term loans and
project-specific funding. IFCs contribute to the creation of robust infrastructure, enabling
economic progress and enhancing the overall quality of life.

4. Microfinance Institutions (MFIs)

Microfinance Institutions have emerged as essential players in financial inclusion, targeting

the economically disadvantaged sections of society. MFIs provide small loans, also known as
microloans to low-income individuals and self-help groups (SHGs). By extending credit to
micro-entrepreneurs and marginalised communities, MFIs empower them to establish or
expand small businesses, lifting them out of poverty and fostering sustainable livelihoods.

5. Investment companies

Investment companies are predominantly engaged in the acquisition and management of

financial assets such as stocks, bonds, mutual funds, and securities. These NBFCs cater to
both retail and institutional investors, facilitating investment opportunities across various
asset classes. Through their expertise in financial markets, Investment companies contribute
to capital formation, mobilising funds for productive use and encouraging responsible
investing practices.

6. Systemically Important Core Investment Companies (CICs-SI)

Systemically Important Core Investment Companies (CIC-SI) are a subset of Investment

Companies that play a significant role in the Indian financial system. A CIC-SI is an NBFC
that holds at least 90% of its total assets in the form of investments in the equity shares, debt,
or other financial assets of its group companies. These entities are systematically important
due to their potential to impact the stability of the financial sector. To maintain financial
stability, the Reserve Bank of India (RBI) regulates and supervises these companies more
closely.

1.3.Nature of Competition of NBFC’s in India:

1. Intense Competition: The NBFC sector is highly competitive, with many players
offering similar products and services.
2. Market Share Competition: NBFCs compete to gain market share in various segments,
such as personal loans, vehicle finance, and microfinance.
3. Product Competition: NBFCs compete to offer innovative and competitive products,
such as digital lending platforms and mobile apps.
4. Price Competition: NBFCs compete on pricing, with some offering lower interest rates
or fees to attract customers.

1.4. Market Share of top and bottom Five NBFC’s in India :

Top Five NBFC’s in India - as of March 13, 2025 (listed on BSE)

Company Stock price Market capitalization
(in crores)
1. Bajaj Finance ₹8,410.45 ₹520,575.91
2. IRFC (Indian Railway Finance ₹117.69 ₹153,816.32
Corporation LTD.)
3. Bajaj Holdings ₹11,336.55 ₹126,168.44
4. Chola Invest ₹1439 ₹121,007.92
5. Shriram Finance ₹619.85 ₹116,555.59
 Bottom Five NBFC’s in India - as of March 13, 2025 (listed on BSE)
Company Stock price Market capitalization
(in crores)
1. HB Stockholdings ₹75.16 ₹53.65
2. Futuristic Solutions LTD ₹51.01 ₹53.43
3. Aastamangalam Finance LTD ₹32.65 ₹52.36
4. Ladderup Finance ₹45.16 ₹47.88
5. Gowra Leasing and Finance LTD ₹63.42 ₹34.59

1.5. Classification of the Companies based on their Market Position:

Classificationof the players as Leader, Challengers, Followers and Nichersare mentioned

below:

Leader Bajaj Finance:

Challenger Shriram Finance

Nicher  Chola Invest

 IRFC (Indian Railway Finance Corporation LTD.):

Follower Bajaj Holdings

1.Leader: A market leader is a company that holds the largest market share in a particular
industry and sets the standard for others to follow. It influences market trends, pricing
strategies, and product innovation. Market leaders often enjoy strong brand recognition,
customer loyalty, and economies of scale, allowing them to dominate the competition. To
maintain their position, they invest heavily in research and development, marketing, and
customer engagement.

Bajaj Finance:

Bajaj Finance is a prominent player in the Indian financial services sector, known for its
extensive portfolio in lending, asset management, and insurance. It has strong market
presence and brand recognition with diversified product portfolio and wide distribution
network which leads to consistent growth and profitability.
2. Challenger: Market challengers are companies that aggressively compete with the market
leader to gain a larger share. They often differentiate themselves through competitive pricing,
unique marketing strategies, superior customer service, or technological innovations. Unlike
market followers, challengers take risks and are willing to disrupt the status quo to gain an
edge. Some challengers engage in direct competition, attacking the leader's weaknesses,
while others create alternative value propositions to attract customers.

Shriram Finance

Shriram Finance is a Market Challenger in the NBFC sector, actively competing with major
players like Bajaj Finance. It focuses on commercial vehicle financing, MSME loans, and
retail finance, targeting underserved customer segments. The company continuously expands
its portfolio, enhances digital lending capabilities, and adopts competitive pricing strategies
to gain market share. While it is not the market leader, its aggressive growth and efforts to
challenge dominant players position it as a strong competitor. This makes Shriram Finance a
Market Challenger in India's financial services industry.

3.Nicher: Market nichers are businesses that specialize in serving a specific segment of the
market, catering to a particular group of customers with unique needs. Instead of competing
on a broad scale, they focus on differentiation, quality, or specialized services. Nichers thrive
by offering tailored solutions that larger competitors may overlook, allowing them to build
strong brand loyalty within their niche. They often command higher profit margins despite a
smaller market share.

i. Chola Invest:

Chola Invest primarily focuses on vehicle financing, affordable housing finance, and SME
loans, catering to specific segments like commercial vehicle owners, small businesses, and
rural customers. It focuses on specific segments, such as commercial vehicle finance and
home loans and has a strong presence in southern India. Its targeted approach and expertise in
select financial products make it a specialist in its domain, allowing it to differentiate itself
rather than directly challenging the market leaders.

ii. IRFC (Indian Railway Finance Corporation LTD.):

IRFC serves as the dedicated financing arm of the Indian Railways, focusing on raising funds
for railway development. Its specialized role and alignment with a specific sector position it
as a Market Nicher. it focuses on financing Indian Railways' projects and assets which has
strong presence in the infrastructure finance segment

It is also growing presence in other segments, such as renewable energy and urban
infrastructure

4.Follower: Market followers are companies that do not challenge the leader directly but
instead adopt similar strategies and business models to maintain a stable position. These firms
often benefit from the leader’s innovations and marketing efforts without taking the risks
associated with pioneering new ideas. Instead of competing aggressively, they focus on
efficiency, cost reduction, and serving existing customer bases. Market followers tend to
avoid price wars and major investments in research and development, relying on steady
demand.

Bajaj Holdings:

Bajaj Holdings is a Market Follower as it primarily functions as an investment company

rather than an active NBFC. It holds significant stakes in Bajaj Finance, Bajaj Auto, and
Bajaj Finserv, benefiting from their growth instead of competing directly. The company does
not introduce disruptive financial products or aggressively expand its market presence.
Instead, it follows industry trends and capitalizes on the success of its subsidiaries. This
passive yet stable approach aligns with the characteristics of a Market Follower in the
financial sector.

1.6. Positioning and Differentiation Strategies of Key Players :

1. Bajaj Finance Ltd.

Positioning: Bajaj Finance positions itself as a leading non-banking financial company

(NBFC) in India, focusing on consumer finance, SME lending, and wealth management.
It targets urban and semi-urban customers seeking quick, accessible credit solutions.

Differentiation: It stands out with its extensive product portfolio—ranging from personal
loans to EMI financing for consumer durables—and its robust digital platform. The
company’s use of technology (e.g., the Bajaj Finserv app) and a vast distribution network
 (over 3,000 touchpoints) differentiates it from traditional banks and smaller NBFCs by
offering speed, convenience, and tailored financial solutions.

2. IRFC (Indian Railway Finance Corporation Ltd.)

Positioning: IRFC positions itself as the dedicated financing arm of the Indian Railways,
a government-backed entity focused on funding railway infrastructure projects, rolling
stock, and modernization efforts.

Differentiation: Its unique monopoly as the sole financier of Indian Railways sets it
apart. Backed by sovereign guarantees, IRFC offers low-risk, stable returns to investors,
distinguishing it from private-sector financial players. Its focus on long-term, large-scale
infrastructure funding contrasts with retail-focused NBFCs.

3. Bajaj Holdings & Investments Ltd.

Positioning: Bajaj Holdings positions itself as a strategic investment company within the
Bajaj Group, managing stakes in high-growth subsidiaries like Bajaj Auto and Bajaj
Finserv for long-term value creation.

Differentiation: Unlike operational NBFCs or manufacturers, it differentiates through a

passive, portfolio-driven approach. Its strength lies in leveraging the Bajaj Group’s
diversified success across automotive and financial services, offering stability and
dividend income to shareholders without direct market competition.

4. Cholamandalam Investment and Finance Company Ltd. (Chola Invest)

Positioning: Chola positions itself as a diversified NBFC catering to vehicle finance,

home loans, and business loans, primarily targeting semi-urban and rural India alongside
urban markets.

Differentiation: It differentiates through its deep penetration into vehicle financing (e.g.,
tractors, commercial vehicles) and a customer-centric approach. Its risk management
practices and focus on underserved markets set it apart from urban-centric competitors
like Bajaj Finance, balancing growth with asset quality.

5. Shriram Finance Ltd.

 Positioning: Shriram Finance positions itself as a retail-focused NBFC specializing in
commercial vehicle financing, small business loans, and consumer finance, with a strong
presence in rural and semi-urban India.

Differentiation: Its niche lies in serving the unorganized and underserved sectors (e.g.,
small truck operators, first-time borrowers) with customized loan products. Its grassroots-
level understanding of customers and flexible credit assessment processes differentiate it
from larger, standardized players.

1.7. Branding Strategies:

1. Bajaj Finance Ltd.

Bajaj Finance leverages the Bajaj Group’s legacy of trust while carving its own
identity as a dynamic, customer-friendly financial brand. Campaigns like “EMI Hai
Na” emphasize ease and accessibility.
Key Elements: It focuses on digital-first marketing, vibrant ads, and partnerships
with e-commerce platforms (e.g., Flipkart, Amazon) to reach tech-savvy consumers,
projecting a modern, solution-oriented image.
2. IRFC (Indian Railway Finance Corporation Ltd.)
IRFC’s branding is understated, relying on its government-backed status and
association with Indian Railways. It targets institutional investors and bond markets
rather than retail customers.
Key Elements: Stability and reliability are core to its brand, with minimal consumer-
facing marketing. Its identity is tied to national infrastructure development, appealing
to conservative investors seeking secure returns.
3. Bajaj Holdings & Investments Ltd.
Bajaj Holdings adopts a low-profile, professional branding strategy, leaning on the
Bajaj Group’s reputation for reliability and innovation. It focuses on investor
confidence rather than mass appeal.
Key Elements: Its messaging emphasizes financial prudence and long-term value,
targeting shareholders and institutional investors through annual reports and investor
meets rather than flashy campaigns.
4. Cholamandalam Investment and Finance Company Ltd.
 Chola builds its brand around accessibility and trust, aligning with the Murugappa
Group’s ethos of integrity. It markets itself as a dependable partner for middle-class
and rural borrowers.
Key Elements: Regional advertising, community engagement, and a focus on
“financing dreams” (e.g., vehicle ownership) shape its approachable, grounded brand
image.
5. Shriram Finance Ltd.
Shriram Finance emphasizes inclusivity and empowerment, branding itself as a
financial ally for the “common man” in underserved markets. Its messaging highlights
reliability and customer loyalty.
Key Elements: Local-language campaigns, testimonials from small business owners,
and a focus on “Shriram’s family” vibe reinforce its grassroots appeal, distinct from
urban-centric competitors.

1.8. PricingPolicies :

NBFCs determine their pricing policies based on multiple factors, including market
conditions, regulatory guidelines, competition, and risk assessment. Unlike traditional
banks, NBFCs have more flexibility in setting interest rates, allowing them to tailor
pricing strategies according to their customer segments and risk appetite. The pricing of
financial products such as loans, credit facilities, and investment plans plays a crucial role
in attracting customers while maintaining profitability.

1. Risk-Based Pricing:NBFCs charge interest rates based on the borrower’s

creditworthiness. Customers with a strong credit history get lower interest rates, while
those with higher risk (low credit score or irregular income) pay higher rates.
Ex–BajajFinance:
Bajaj Finance offers personal loans at interest rates ranging from 11% to 35%, depending
on the customer’s credit score, income stability, and repayment capacity.
2. Cost-Plus Pricing:The lending rates are determined by adding a profit margin to the
cost of funds. This ensures the NBFC covers its operational costs and earns a margin on
loans provided.
 Ex–IRFC:
IRFC provides long-term loans to Indian Railways at an interest rate slightly above its
borrowing cost, ensuring it remains profitable while offering affordable financing to the
rail sector.
3. Competitive Pricing: NBFCs set their loan interest rates in line with competitors to
attract customers while maintaining profitability. This strategy helps in capturing market
share in a competitive industry.
Ex–BajajHoldings:
As an investment company, Bajaj Holdings ensures that its returns on investments in
Bajaj Group companies are competitive compared to mutual funds and other financial
instruments, attracting long-term investors.
4. Product Bundle Pricing: NBFCs offer multiple financial products together at a
bundled price, making them more attractive to customers and increasing cross-selling
opportunities.
Ex – Chola Invest:
Cholamandalam Investment offers bundled financing solutions for commercial vehicles,
where customers can avail of vehicle loans along with insurance and maintenance
packages at a combined rate.
5. Penetration Pricing:NBFCs initially offer lower interest rates to attract new customers
and gain market share. Later, they gradually increase rates or introduce additional
charges.
Ex–ShriramFinance:
Shriram Finance provides lower interest rates on commercial vehicle loans for first-
time borrowers, ensuring they can afford repayments. Once the customer establishes a
credit history, interest rates may be adjusted.

The pricing strategies and market influence of the companies are as follows:

1) Bajaj Finance Ltd.

Pricing Strategy: Bajaj Finance uses competitive, risk-based pricing for its loans (e.g.,
personal loans at 11-15% p.a., EMI financing at 0% for select products). It balances
affordability with profitability, often cross-subsidizing through high-volume transactions.

Market Influence: Its pricing undercuts traditional banks for quick loans while leveraging
scale to maintain margins, appealing to cost-conscious borrowers.
2) IRFC (Indian Railway Finance Corporation Ltd.)

Pricing Strategy: IRFC’s pricing is tied to low-cost borrowing (e.g., bonds at 6-7% p.a.) due
to government backing, which it passes on to Indian Railways at marginal markups. It
prioritizes stability over aggressive profit margins.

Market Influence: Its rates are dictated by government policy and bond market dynamics,
offering predictable, low-risk returns rather than competing on price with private players.

3) Bajaj Holdings & Investments Ltd.

Pricing Strategy: As a holding company, Bajaj Holdings doesn’t set consumer prices. Its
“pricing” reflects dividend policies and investment returns, shaped by the performance of
subsidiaries like Bajaj Finance and Bajaj Auto.

Market Influence: It benefits indirectly from subsidiaries’ pricing strategies but focuses on
optimizing shareholder value through conservative financial management.

4) Cholamandalam Investment and Finance Company Ltd.

Pricing Strategy: Chola employs tiered pricing based on customer risk profiles (e.g., vehicle
loans at 9-14% p.a.), balancing competitive rates with asset security. It offers flexibility for
rural borrowers with irregular incomes.

Market Influence: Its pricing competes with banks and NBFCs in vehicle finance,
maintaining profitability through high recovery rates and a diversified loan book.

5) Shriram Finance Ltd.

Pricing Strategy: Shriram uses risk-adjusted pricing (e.g., commercial vehicle loans at
12-18% p.a.), higher than urban peers due to its focus on higher-risk, underserved
segments. It offsets this with strong collection mechanisms.

Market Influence: Its rates reflect the cost of serving unorganized sectors, competing with
local moneylenders rather than banks, prioritizing accessibility over the lowest price.

1.9. Capacity Analysis – Total Industry Capacity and Breakup Among Key
Players:
The capacity of the Non-Banking Financial Companies (NBFCs) industry is measured in
terms of total assets under management (AUM), lending capacity, and market share.

Industry-Wide Capacity(as of 2023-24)

The NBFC sector in India manages a total AUM of ₹50 lakh crore.

NBFCs contribute to about 25% of total credit disbursed in India, next only to banks.

The total loan book of NBFCs has grown at a CAGR of ~15-18% over the last decade.

Breakup of Capacity Among Key Players

NBFCs are classified into different segments based on their focus areas. The capacity
breakup is as follows:

Market Share
Segment Key Players
(%)

Bajaj Finance, Tata Capital, Aditya Birla

Retail & Consumer Finance 40%
Finance

HDFC Ltd, LIC Housing Finance, PNB

Housing Finance 30%
Housing Finance

Bandhan Bank, Ujjivan Small Finance

Microfinance (MFI) 10%
Bank, Spandana Sphoorty

Gold Loans 10% Muthoot Finance, Manappuram Finance,

 Market Share
Segment Key Players
(%)

IIFL Finance

Infrastructure & Wholesale

10% L&T Finance, PFC, REC Ltd
Lending

1.10.Current Capacity Utilization Rates:

Capacity utilization in NBFCs is determined by their credit deployment rate, borrowing-to-

lending ratio, and asset quality.

Key Capacity Utilization Metrics

 Credit-to-Borrowing Ratio: 85-90%, indicating NBFCs efficiently utilize borrowed

funds.
 Loan Disbursement Growth: Grew 20% year-on-year in FY 2023-24, driven by
demand in MSME and consumer finance.
 Gross NPA (Non-Performing Assets) Levels: Around 6%, which is an improvement
from 8% in 2020.
 Capital Adequacy Ratio (CAR): Average of 18%, higher than the minimum 15%
required by RBI.

Segment-wise Utilization Rates -

Utilization Rate
Segment Remarks
(%)

Consumer Finance 85-90% High demand for personal and vehicle loans

Housing Finance 80-85% Lower risk but impacted by interest rate changes

Microfinance 75-80% Increasing rural penetration but high risk

Gold Loans 90-95% Highly utilized due to secured lending

Infra & Wholesale 70-75% Slow disbursement due to long-term projects

1.11. Planned Future Capacity Additions :

NBFCs are expanding their lending capacity through capital infusion, fintech partnerships,
and new product offerings.

1. Tech-Driven Expansion

NBFCs are increasing digital lending platforms (AI-based credit scoring, paperless
processing).

Example: Bajaj Finance plans to invest ₹1,500 crore in technology over the next 3 years to
improve digital lending.

2. Capital Infusion & Fundraising

Many NBFCs are raising capital through IPOs, rights issues, and bond offerings.

Example: LIC Housing Finance plans to raise ₹10,000 crore for expanding housing loans.

3. Growth in MSME & Affordable Housing Segments

NBFCs are focusing on Tier 2 & 3 cities for MSME loans.

Example: PNB Housing Finance is targeting a 20% AUM growth in affordable housing.

4. New Product Launches

NBFCs are entering EV financing, green loans, and digital SME lending.

HDB Financial Services and Mahindra Finance are investing in EV loan portfolios

5. Mergers & Acquisitions

HDFC Ltd merged with HDFC Bank to boost its lending capacity.

L&T Finance is restructuring its lending business to improve retail finance penetration.

1.12. Geographical Spread of Plants and Facilities :

Unlike banks, NBFCs do not have manufacturing plants but operate through physical
branches, digital platforms, and financial hubs.

Domestic Presence
  Total NBFC Branches in India: Over 20,000 branches

 Rural & Semi-Urban Focus: 50-60% of NBFC branches are in Tier 2 and Tier 3 cities.

 Strong Regional Presence:

 South India: Muthoot Finance, Manappuram Finance dominate the gold loan
sector.
 West & North India: Bajaj Finance, Mahindra Finance have high penetration in
vehicle and personal loans.
 East India: Bandhan Bank, Ujjivan Small Finance Bank lead in microfinance.

Global Expansion

 Some large NBFCs have expanded internationally:

o Edelweiss and IIFL Finance operate in wealth management and global

investments.

o Muthoot Finance has a presence in UAE, Sri Lanka, and UK.

o L&T Finance has overseas funding partnerships for infrastructure projects.

Digital Expansion

 Over 60% of NBFC loan disbursements are now done via digital platforms.

 Paytm, Bajaj Finserv, and Tata Capital lead in app-based lending.

1.13. Demand Supply balance at global, national and regional level:

The demand-supply balance for Non-Banking Financial Companies (NBFCs) at the global,
national, and regional levels involves complex dynamics influenced by various factors such
as regulatory environment, economic conditions, financial inclusion goals, and market
demand for financial services. The demand is typically driven by the need for credit and
financial services, while supply is influenced by the number of NBFCs, their financial
resources, and the regulatory frameworks they operate under.

Demand-Supply Balance of NBFCs at Global, National, and Regional levels:

Level Demand Drivers Supply Factors Example
Strict regulations, foreign
High credit demand in
investments, multinational SoFi (USA), Ant Financial
emerging markets, fintech
Global NBFC expansion, (China) expanding digital
growth, SME financing,
alternative funding (P2P lending.
consumer loans.
lending).
Growing middle class, RBI regulations, liquidity
Bajaj Finance & Shriram
MSME & rural credit constraints, fintech
National Finance growing in
needs, low banking competition,
(India) personal/vehicle loans;
penetration, government securitization & bond
IRFC financing railways.
schemes. funding.
State-level infrastructure, Local lending policies, Chola Invest funds
agriculture finance, SME presence of state-specific vehicles in South India;
Regional
loans, microfinance NBFCs, cooperative Shriram Finance supports
demand. funding. transport sector.

1.14. Key factors affecting Demand :

 A few years back, Banks were the only other option for getting a loan, apart from
traditional lenders, but over time the role of non-banking finance companies (NBFCs)
increased in Indian financial sector. NBFC offer various banking services but do not
have a banking license, because NBFCs are not allowed to take traditional demand
deposits as banks do. However, NBFCs are engaged in the business of Loans and
advances, leasing, hire-purchase, insurance, chit business etc. NBFCs cater to all your
desired financial services. Every year, these NBFCs are expected to witness a growth of
4%-6%. Several factors have been cumulatively responsible for increasing the
importance of these NBFCs in India.
 NBFCs do play a critical role in participating in the development of an economy by
providing employment generation, wealth creation, bank credit in rural segments and
supporting financially weaker sections of the society. In short, NBFCs allow and
provide with the mobilization of resources, Funds and capitals.
1. Technological Advancements and Digital Integration

NBFCs have embraced technology to enhance efficiency and customer experience. The
adoption of digital platforms has streamlined services, making them more accessible and
user-friendly. This technological shift has been a significant driver of growth in the NBFC
sector.

2. Economic Growth and Investment Rates

A surge in the economy's investment rate implies increased aggregate demand for goods and
services. This escalation necessitates financial institutions, including NBFCs, to meet the
emerging financial needs of the economy.

3. Financial Inclusion and Rising Middle Class

The expansion of the middle class and enhanced financial inclusion have opened new
markets for NBFCs. These demographic shifts have increased the demand for financial
products and services, contributing to the sector's growth.

4. Regulatory Environment

The Reserve Bank of India's (RBI) policies significantly impact NBFC operations. For
instance, the RBI's relaxation of banks' lending norms has led NBFCs to adjust their funding
strategies, influencing their lending capabilities and demand.

5. Alternative Financing Options

The rise of financial technology (fintech) companies offering alternative lending solutions
has affected the traditional demand for NBFCs. These fintech platforms provide innovative
credit options, influencing the borrowing landscape.

1.15. Key Supply Constraints of NBFC in India :

1. Funding Challenges

NBFCs have historically depended on short-term funding instruments like commercial papers
(CPs). However, the Reserve Bank of India's (RBI) recent relaxation of lending norms is
expected to make bank funding more accessible and cost-effective. This shift may lead
NBFCs to adjust their funding strategies over the coming year.

2.Regulatory Adjustments

The RBI has partially reversed stricter loan rules for microcredit and non-bank lenders,
reducing risk weight requirements for certain loans. While this move aims to support growth,
it may take time for its effects to materialize in NBFCs' lending activities.

3. Liquidity Constraints

Despite regulatory easing, NBFCs continue to face liquidity challenges. The Finance Industry
Development Council (FIDC) has urged the government to establish a liquidity facility to
enhance lending to priority sectors, indicating ongoing concerns about funding adequacy.

4. Competition from Alternative Lenders

The rise of fintech companies offering alternative lending solutions has intensified
competition, challenging traditional NBFCs to innovate and adapt to changing market
dynamics.

5. Asset Quality Concerns

An increase in unsecured lending, particularly among younger demographics, has raised

concerns about higher delinquencies. This trend poses risks to the asset quality of NBFCs,
potentially affecting their lending capacity.

1.16. Professional Trade Bodies :

Trade Body Description Website Link

The INBF works to promote the interests
Association of of NBFCs, enhance the financial services
https://www.inbfin.com/
NBFCs (INBF) sector, and provide a platform for NBFCs
to interact with regulators.
Finance FIDC is a representative body for NBFCs
Industry in India, focusing on policy advocacy, https://www.fidcindia.org/
Development research, and setting industry standards to
 Council (FIDC) promote the sector's growth.
IFA represents the NBFCs, financial
Indian
institutions, and entities engaged in
Financial
providing financial services, focusing on http://www.ifaindia.org/
Association
improving industry standards and
(IFA)
regulations.

Microfinance MFIN is a self-regulatory organization that

Institutions works for the promotion and development
https://www.mfinindia.org/
Network of the microfinance sector, focusing on
(MFIN) ethical practices and sustainability.

National
NASSCOM is an industry association for
Association of
the Indian IT and business process
Software and
management (BPM) sector, which https://www.nasscom.in/
Service
includes NBFCs that utilize technology for
Companies
financial services.
(NASSCOM)

1.17 Business function carried out online by key players.

Non-Banking Financial Companies (NBFCs) play a crucial role in India’s financial

ecosystem by offering services such as loans, asset financing, insurance, and investment
solutions. With the rapid adoption of digital technology, NBFCs have significantly expanded
their online operations to provide seamless financial services to customers.

1. Bajaj Finance

Online Business Functions:

Digital Lending Platform where Customers can apply for personal, business, home, and
vehicle loans through the website and mobile app. EMI Card Management for The Bajaj
Finserv EMI Card allows users to shop online and convert expenses into easy EMIs.
Investment Services having Digital access to fixed deposits, mutual funds, and insurance
plans. Customer Service for AI-powered chatbot for instant query resolution and grievance
redressal. Credit Health Check providing Online credit score checking and financial planning
tools.

2. IRFC (Indian Railway Finance Corporation LTD.)

Online Business Functions:

Bonds and Debentures where Investors can buy and track IRFC bonds online. Financial
Reports & Disclosures for Regular updates on financial performance and corporate
announcements. Investor Grievance Redressal having Online portal for investors to raise
concerns and seek resolutions. Regulatory Compliance for Online submission of compliance
documents through the SEBI and stock exchange portals.

3. Bajaj Holdings & Investment Limited

Online Business Functions:

Portfolio & Asset Management for Online tracking of investments and asset allocation.
Investor Relations preparing Financial reports, regulatory filings, and investor presentations
available digitally. Digital Wealth Management to access to various investment opportunities
in equity, fixed deposits, and insurance.

4. Cholamandalam Investment and Finance Company Limited (Chola Invest)

Online Business Functions:

Digital Loan Applications: Customers can apply for vehicle, home, SME, and gold loans
online. Insurance & Investments: Digital access to insurance policies and fixed deposits. AI-
Based Credit Assessment: Quick loan approvals using AI-driven risk analysis. Repayment &
Account Management: Online EMI payments, loan tracking, and financial planning tools.

5. Shriram Finance Limited

Online Business Functions:

Loan Services where Customers can apply for commercial vehicle loans, MSME loans, gold
loans, and personal loans online. Customer Support having Chatbots and helplines for real-
time query resolution. Digital Payment Options: Online EMI payment and auto-debit
facilities. AI-Powered Loan Eligibility Check: Customers can check their loan eligibility
using AI-driven digital tools.

The digital transformation of NBFCs has significantly improved accessibility and efficiency
in financial services. Companies like Bajaj Finance and Shriram Finance lead the way with a
strong online presence, mobile applications, and AI-powered services. Others, like IRFC and
Bajaj Holdings, focus more on investor relations through digital platforms. As digital
adoption increases, NBFCs will continue to enhance their online services, providing seamless
financial solutions to customers.

1.18. Incremental Innovation vs. Disruptive Innovation in NBFCs :

Non-Banking Financial Companies (NBFCs) have undergone rapid digital transformation in

recent years. Their innovations can be classified into incremental innovations (small but
continuous improvements) and disruptive innovations (game-changing technological shifts
that redefine the industry).

Incremental innovation focuses on enhancing existing financial products and services by

Incremental innovation in Non-Banking Financial Companies (NBFCs) refers to gradual
improvements in existing processes, products, and services to enhance efficiency, customer
experience, and operational effectiveness. Unlike disruptive innovation, which creates
entirely new markets, incremental innovation focuses on refining and optimizing current
offerings. Below are the key areas where NBFCs are implementing incremental innovations:

1. Enhanced Digital Onboarding & E-KYC

NBFCs have improved the customer onboarding process by integrating paperless and AI-
powered e-KYC (electronic Know Your Customer) systems. This reduces the time required
for loan approvals and enhances customer convenience. Example: Bajaj Finance has
streamlined e-KYC verification, allowing instant loan approvals with Aadhaar-based
authentication.

2. AI-Powered Risk Assessment & Fraud Detection

NBFCs are leveraging Artificial Intelligence (AI) and Machine Learning (ML) to improve
credit risk assessment and detect fraudulent transactions. By analyzing vast amounts of data,
AI helps NBFCs reduce non-performing assets (NPAs) and improve loan disbursal accuracy.
Example: Shriram Finance uses AI-based risk models to assess borrowers' repayment ability
before approving vehicle loans.

3. Improved Loan Repayment & Collection Mechanisms

NBFCs have introduced automated EMI reminders, digital collection systems, and flexible
repayment options to reduce loan defaults and improve customer retention. These innovations
make the repayment process seamless and hassle-free. Example: Chola Invest provides
customers with multiple digital payment modes, including UPI, net banking, and mobile
wallets, for easier EMI payments.

4. Personalized Loan Products & Credit Offerings

NBFCs are using data analytics to customize loan products based on individual borrower
needs. Instead of offering generic loan products, they provide personalized credit solutions
with flexible tenure and repayment structures. Example: Bajaj Finserv offers pre-approved
loans tailored to customers' financial profiles, reducing paperwork and processing time.

5. Omni-Channel Customer Support & Chatbots

NBFCs are adopting AI-driven chatbots and 24/7 customer support via websites, mobile
apps, and WhatsApp to assist customers in real-time. This enhances customer service quality
and reduces reliance on manual customer support teams. Example: IRFC has improved its
investor relations with automated query resolution on its digital platform.

6. Securitization & Alternative Funding Strategies

NBFCs are enhancing their funding capabilities by tapping into capital markets through
securitization, bond issuances, and co-lending partnerships with banks. These incremental
innovations improve liquidity and financial stability. Example: IRFC regularly issues bonds
and collaborates with government institutions for railway financing.

7. Fintech Partnerships for Better Credit Accessibility

NBFCs are collaborating with fintech startups and digital lending platforms to reach a wider
customer base and offer more efficient loan services. These partnerships enable better data
analysis and quicker loan disbursement. Example: Shriram Finance partners with fintech
firms to expand digital lending for SMEs and self-employed individuals.
20.Disruptive Innovation in NBFCs :

Disruptive innovation fundamentally changes how financial services are provided, often
replacing traditional models with new technology-driven solutions.

1. Digital Lending Platforms

Digital lending platforms have revolutionized the way NBFCs process loans by eliminating
manual paperwork and enabling instant approvals. Through AI-powered verification and e-
KYC, customers can apply for loans online and receive funds within minutes. Bajaj Finance,
for example, offers pre-approved personal loans via its mobile app, reducing dependency on
traditional branch-based approvals.

2. AI & Machine Learning-Based Credit Scoring

Traditional credit scoring relies on financial history, making it difficult for first-time
borrowers to access credit. AI and machine learning use alternative data, such as transaction
behavior and social media activity, to assess creditworthiness. Chola Invest leverages AI-
driven credit assessment to evaluate borrowers' repayment capability, especially in the
vehicle loan segment.

3. Blockchain for Secure Transactions

Blockchain technology ensures tamper-proof financial records, reducing fraud risks and
improving transparency in lending. NBFCs are exploring blockchain to verify loans, execute
smart contracts, and improve loan tracking mechanisms. This technology enhances security
and minimizes operational risks in financial transactions.

4. Robo-Advisory & Automated Investment Platforms

Wealth management services are becoming automated through robo-advisors, which use AI
to offer personalized investment recommendations. Bajaj Holdings integrates digital tools to
help investors track and manage their portfolios with minimal human intervention. This
makes financial advisory more accessible and cost-effective for customers.

5. Embedded Finance & BNPL (Buy Now, Pay Later)

Embedded finance enables seamless financial transactions within non-financial platforms,

such as e-commerce websites. The Buy Now, Pay Later (BNPL) model allows consumers to
purchase goods on credit and pay in installments. Bajaj Finserv EMI Card is a prime
example, offering zero-cost EMI options on consumer products, making purchases more
affordable.

6. Peer-to-Peer (P2P) Lending

P2P lending platforms connect borrowers directly with investors, eliminating the need for
traditional financial intermediaries. This model provides faster access to funds while offering
competitive returns to lenders. NBFCs like Lendbox and Faircent are disrupting conventional
banking by facilitating unsecured digital loans through their platforms.

7. Neobanking& Digital-Only Financial Services

Neobanks operate entirely online, providing customers with low-cost banking solutions,
instant loans, and digital wallets without physical branches. NBFC-backed digital lenders like
KreditBee offer quick personal loans through mobile apps, catering to young, tech-savvy
consumers. This shift to digital banking enhances accessibility and customer convenience.
 Chapter 2:
Promoters and
Management Ethos

2.1 Background of promoter groups of top 5

 Top 5

4.
2. Indian Railway 3. Bajaj Holdings
1. Bajaj Finance Cholamandalam 5. Shriram Finance
Finance and Investment
Ltd investment and Ltd.
Corporation Ltd
finance Co. Ltd.

1. Bajaj Finance Ltd

Bajaj Finance Ltd., a leading non-bank financial services company, is promoted by
Bajaj Finserv Ltd. and its subsidiaries, with Bajaj Finserv holding a significant
52.49% stake. The Bajaj Group, founded by Jamnalal Bajaj, has a history rooted in
philanthropy and business, evolving from sugar and textiles to a diverse
conglomerate.

 Promoter Group: Bajaj Finance Ltd. is promoted by Bajaj Finserv Ltd. and its
subsidiaries.

 Bajaj Finserv's Role: Bajaj Finserv is a core investment company and holds a
controlling stake in Bajaj Finance Ltd.

 Bajaj Group's History: The Bajaj Group was founded by Jamnalal Bajaj, a freedom
fighter, philanthropist, and close confidant of Mahatma Gandhi.

Jamnalal Bajaj Founder of the Bajaj Group

Kamalnayan Succeeded Jamnalal Bajaj as the head of the Bajaj Group and
Bajaj played a pivotal role in diversifying its business interests

Rahul Bajaj Chairman Emeritus and former Managing Director of the

Bajaj Group
Sanjiv Bajaj Current Chairman of Bajaj Finserv Ltd
2. Indian Railway Finance Corporation (IRFC)
The Indian Railway Finance Corporation (IRFC), a Navratna Public Sector
Enterprise, is promoted by the Government of India, with the Ministry of Railways
having administrative control, and it was established on December 12, 1986, as the
dedicated financing arm of Indian Railways.

 Promoter: The Government of India is the sole promoter of IRFC.

 Administrative Control: The Ministry of Railways, Government of India, has

administrative control over IRFC.
 Establishment: IRFC was established on December 12, 1986, as the dedicated
financing arm of Indian Railways.

3. Bajaj Holdings and Investment Ltd.

The promoter group of Bajaj Holdings & Investment Limited (BHIL) traces its roots
to Jamnalal Bajaj, an industrialist, philanthropist, and freedom fighter, who founded
the Bajaj Group in 1926.
Key figures in the promoter group include:
 Rahul Bajaj, the grandson of Jamnalal Bajaj
 Sanjiv Bajaj and Niraj Bajaj

The promoter shareholding of Bajaj Finance Limited is 54.7%.

Sanjiv Bajaj is the Managing Director & CEO of Bajaj Holdings & Investment Limited.

4. Cholamandalam investment and Finance Co. Ltd.

Cholamandalam Investment and Finance Company Limited (CIFCL) is a part of the
Murugappa Group, a large Indian conglomerate founded in 1900, and its promoter
group includes Tube Investments of India Limited and other companies within the
Murugappa Group.
 Headquarters - Chennai.
 Established in - 1978 as the financial services arm of the Murugappa Group.
 Operates as - a diversified non-banking finance company.
 Holdings - As of March 31, 2024, the promoter and promoter group hold
50.35% in the company.
  In 2005, DBS Bank acquired a 37.5% stake in Cholamandalam Investment
and Finance Company, with the Murugappa Group lowering its stake to 37.5%

5. Shriram Finance Ltd.

Shriram Finance Limited (SFL), a leading financial services company, was promoted
by R. Thyagarajan,, A.V.S. Raja, and T. Jayaraman

It initially focused on chit funds and later expanded into lending and
insurance.Shriram Group has been a key player in the Indian financial services sector.
The core strength of the group lies in the financial services as the pioneers in truck
financing and chit business. Shriram Group was founded by Mr. R.Thyagarajan with
the motive of serving the common man for financial empowerment. Mr.
R.Thyagarajan was awarded India's third highest civilian award, the Padma Bhushan
in 2013 in the field of trade and industry. Shriram Group believes and follows his one
mantra of “People First”. This value system has been methodically instilled and
institutionalized into the Shriram group over the last 4 decades.

2.2 Background of Promoter groups of bottom 5 players in the Industry

Bottom 5

1. HB 4.
2. Ladderup 3. Futuristic 5. Gowra Leasing
Stockholdings Aastamangalam
Finance Solutions LTD. and Finance LTD.
LTD. Finance LTD.

1. HB Stockholdings Ltd.
HB Stockholdings Ltd. was incorporated in 1985 and is promoted by the Bhasin
family, with Lalit Bhasin being the primary promoter and owning 51.54% of the total
equity.
 The company was promoted by Shri Harish Bhasin.

 Promoter Group:
 The primary promoter and Chairman of the company is Lalit Bhasin.
 Lalit Bhasin owns 51.54% of the total equity.
 Other members of the promoter group include Shri Kanishk Kapur, Shri
Ayush Kapur, Shri Manasvin Arora, Ms. Mehar Arora, and Merygold.
2. Ladderup Finance

Ladderup Finance Limited, founded by a group of Chartered Accountants and led by

Sunil Goyal, is recognized for its expertise in investment banking, corporate finance, and
corporate advisory services. Sunil Goyal, a well-known investment banker, is a Fellow
member of The Institute of Chartered Accounts of India (ICAI) and has served as the
Chairman of Western India Regional Council of ICAI. The founder of Ladderup Group,
Sunil is a well-known investment banker with over 20 years of experience.

3. Futuristic Solutions Ltd.

Futuristic Solutions Limited was originally incorporated under the Companies Act, 1956
on 21st September 1983 under the name of Moral Leasing Pvt.Ltd.. Subsequently it
changed its status from Private Limited Company to Public Limited Company and
obtained a fresh Certificate of Incorporation on 23rd day of September 1983.

After the public issue, the company twice offered shares to their shareholders on Right
basis in the year 1988 and 2000 respectively. In 2002, the name of the Company was
changed from MORAL LEASING LTD. TO FUTURISTIC SOLUTIONS LIMITED.
The capital of the company was further increased by Preferential Issue and Bonus issue.

4. Aastamangalam Finance LTD.

Aastamangalam Finance Limited (Formerly known Upasana Finance Ltd) was promoted
by theTVS family in Jan.'85 with a Share Capital of Rs 5 lacs. Subsequently, it became a
Deemed Public Company and the Share Capital increased to Rs 30 lacs. The name of the
company was changed in Jan.'95. The Company is currently carrying on the business of
short term and long term financing to both corporate and non-corporate entities. Prior to
this, the Company was in the business of leasing, hire-purchase and fixed deposits. It
 went public with its maiden issue at a premium of Rs 25 to strengthen the capital base and
fund expansion in hire-purchase and leasing. The promoters' holding after the issue stood
at 70.13%.

5. Gowra Leasing and Finance LTD.

GOWRA LEASING & FINANCE LIMITED (GLFL) is a Non-Banking Financial
Company (NBFC) registered with Reserve Bank of India. GLFL was incorporated on
9th February, 1993. GLFL is categorized as a Loan Company by Reserve Bank of
India, serving mid corporate and retail customers. The shares of the Company are
listed in Bombay Stock Exchange (BSE).

2.3 Management Ethos & Philosophy

Bajaj Finance Limited (BFL), one of India's leading non-banking financial companies
(NBFCs), operates with a strong management ethos and philosophy rooted in customer-
centricity, innovation, and responsible lending.

1.Bajaj Finance :

Principle Description

Customer-Centric Focuses on delivering value-driven financial products and seamless

Approach service.

Invests in technology, AI, and analytics for a superior digital

Innovation & Digital-First
experience.

Ensures asset quality through robust risk frameworks and data-

Prudent Risk Management
driven decisions.

Strong Governance & Maintains transparency, regulatory compliance, and high corporate
Ethics governance standards.
 Diversified Product Offers loans, insurance, wealth management, and other financial
Portfolio services.

Expands strategically while maintaining profitability and financial

Sustainable Growth Model
stability.

Fosters leadership, innovation, and accountability within the

Employee Empowerment
workforce.

2. Indian Raailway Finance Corporation (IRFC) LTD :

Indian Railway Finance Corporation (IRFC) is a public sector enterprise under the Ministry
of Railways, Government of India. Established in 1986, IRFC serves as the dedicated
financing arm of Indian Railways, providing funds for infrastructure projects, rolling stock
procurement, and railway expansion.

Management Ethos and Philosophy :

Principle Description

Financial Backbone of Primarily finances railway infrastructure and rolling stock

Indian Railways acquisitions.

Sustainable & Cost-

Ensure low-cost, long-term funding for railway projects.
Effective Financing

Prudent Risk & Asset

Maintains strong credit discipline and risk mitigation strategies.
Management

Government-Backed Operates as a public sector enterprise under the Ministry of

Stability Railways.

Strong Corporate
Adheres to high ethical, regulatory, and compliance standards.
Governance
 Diversified Funding Raises capital through domestic and international markets,
Sources including bonds and loans.

Focus on National Supports India’s infrastructure growth through sustainable

Development railway financing.

3. Bajaj Holdings:

Bajaj Holdings & Investment Ltd. (BHIL) is a non-banking financial company (NBFC) and
the investment arm of the Bajaj Group. Formed in 2007 after Bajaj Auto’s demerger, BHIL
holds major stakes in Bajaj Auto, Bajaj Finserv, and Bajaj Finance. As a core investment
company (CIC), it focuses on long-term value creation through strategic investments, earning
revenue from dividends, capital appreciation, and interest income.

Management Ethos and Philosophy :

Principle Description

Mission-Driven Dedicated to financing Indian Railways’ infrastructure and

Financing rolling stock.

Cost-Effective Capital Ensures long-term, low-cost funding for railway projects.

Prudent Risk Maintains strong credit discipline and asset-liability

Management management.

Government-Backed Operates as a public sector enterprise under the Ministry of

Stability Railways.

Strong Corporate Follows high ethical standards, regulatory compliance, and

Governance transparency.

Diversified Funding Raises funds through domestic and international markets,

Mechanisms including bonds.

Sustainable Plays a key role in India’s railway expansion and modernization

Infrastructure Growth efforts.
4. Cholamandalam Investment and Finance Company Ltd(Chola Invest) :
Cholamandalam Investment and Finance Company Ltd. (Chola Invest) is a non-banking
financial company (NBFC)and part of the Murugappa Group. Established in1978, it provides
vehicle finance, home loans, SME loans, and wealth management services, catering primarily
to retail and semi-urban customers.

Management Ethos and Philosophy :

Principle Description

Customer-Centric Focuses on providing tailored financial solutions to customers

Approach across various segments.

Ethical & Transparent Upholds high corporate governance standards with regulatory
Governance compliance and ethical business practices.

Risk Management & Maintains prudent risk management and asset-liability

Financial Discipline strategies to ensure financial stability.

Diversified Lending Offers a wide range of financial products, including vehicle

Portfolio finance, home loans, SME loans, and wealth management.

Technology-Driven Leverages digital innovation for seamless customer

Operations experience and operational efficiency.

Sustainable & Inclusive Supports economic development by financing underserved

Growth segments like SMEs and rural businesses.
 Employee & Stakeholder Encourages employee development, leadership, and
Engagement stakeholder value creation.

5. Shriram Finance :

Shriram Finance Ltd. is a leading non-banking financial company (NBFC) and part of the
Shriram Group, specializing in vehicle finance, SME loans, personal loans, gold loans, and
other financial services. Formed through the merger of Shriram Transport Finance, Shriram
City Union Finance, and Shriram Capital, it is one of India’s largest retail-focused NBFCs.

Management Ethos and Philosophy :

Principle Description

Customer-Centric Focuses on serving underserved and rural segments with tailored

Approach financial solutions.

Ethical & Transparent Adheres to strong corporate governance, regulatory compliance, and
Governance ethical business practices.

Implements robust risk assessment and credit evaluation to maintain

Prudent Risk Management
asset quality.

Diversified Financial Offers vehicle finance, SME loans, gold loans, personal loans, and
Services other financial products.

Leverages digital transformation to enhance customer experience and

Technology & Innovation
operational efficiency.

Inclusive & Sustainable Supports financial inclusion by catering to small businesses and first-
Growth time borrowers.
 Employee & Stakeholder Encourages employee development and long-term value creation for
Value stakeholders.

2.4 CMD’s ,CEO’s and Key Management Personnel

1.Bajaj Finance LTD: As of April 1, 2025, Bajaj Finance Limited has implemented
significant leadership changes. Anup Saha has been appointed as the Managing Director,
succeeding Rajeev Jain, who now serves as the Vice Chairman.
The current top management team includes:
 Sandeep Jain: Chief Operating Officer and Chief Financial Officer
 Fakhari Sarjan: Chief Risk Officer
 Anupam Sirbhaiya: Chief Human Resources and Administrative Officer
 Deepak Bagati: Chief Operating Officer and President - Debt Management Services
 Deepak Reddy: President - Rural Lending, Gold Loans & Insurance Businesses
 Anurag Chottani: Chief Operating Officer and Chief Technology Officer

Indian Railway Finance Corporation (IRFC) Ltd. :

As of April 2025, the Indian Railway Finance Corporation (IRFC) Ltd. is led by Manoj
Kumar Dubey, who serves as the Chairman and Managing Director (CMD).

The key top management personnel include:

 Shelly Verma: Director of Finance.

 Sunil Kumar Goel: Chief Financial Officer (CFO) and Key Managerial Personnel.
 Vijay Babulal Shirode: Joint General Manager (Law) and Company Secretary.
 Sanjay Jain: Chief Compliance Officer.
 Manish Chandra: Executive Director of Human Resources.
 Pranav Kumar Mallick: Part-Time Chief Vigilance Officer

Bajaj Holdings & Investment Ltd. :

As of April 2025, Bajaj Holdings & Investment Limited (BHIL) is led by a team of seasoned
professionals with extensive experience in the financial and industrial sectors.

 Non-Executive Chairman: Shekhar Ramkrishna Bajaj.

 Shekhar Bajaj serves as the Non-Executive Chairman of BHIL, providing strategic
oversight and guidance to the company's operations.
 Managing Director & Chief Executive Officer (CEO):Sanjivnayan Rahul K. Bajaj
 Sanjiv Bajaj has been at the helm of BHIL since April 2012, overseeing its strategic
investments and growth initiatives. Under his leadership, BHIL has strengthened its
position as a core investment company within the Bajaj Group. .
 Chief Financial Officer (CFO): Anant Marathe
 Anant Marathe manages the financial operations of BHIL, ensuring fiscal discipline
and overseeing investment portfolios.
 Chief Investment Officer (CIO): Purav Jhaveri Purav Jhaveri serves as the President
- Investments and CIO at BHIL, responsible for managing the company's investment
strategies and portfolios.

Cholamandalam Investment and Finance Company Ltd. (Chola Invest) :

As of April 2025, Cholamandalam Investment and Finance Company Limited

(Chola Invest) is led by a distinguished team of professionals:
 Chairman & Non-Executive Director: Vellayan Subbiah
 Vellayan Subbiah, associated with the Murugappa Group, has played a pivotal role in
the company's strategic direction.
 Managing Director: Ravindra Kumar Kundu
 Ravindra Kumar Kundu has been instrumental in driving the company's growth and
innovation in financial services.
 Chief Financial Officer (CFO): Arulselvan Dharmalingam
 With over three decades of experience, Arulselvan Dharmalingam oversees the
financial operations of the company.
 Company Secretary: P. Sujatha
 P. Sujatha manages corporate governance and compliance matters.

Shriram Finance Limited

 As of April 2025, Shriram Finance Limited is led by a team of seasoned
professionals who have significantly contributed to the company's growth and
success.
 Executive Vice Chairman: Umesh Revankar
 Umesh Revankar has been associated with the Shriram Group for several decades,
holding various leadership positions. His extensive experience in the financial
services sector has been instrumental in driving the company's strategic initiatives
and expansion.
 Managing Director & CEO: Y. S. Chakravarti
 Y. S. Chakravarti brings a wealth of experience to his role as Managing Director and
CEO. Under his leadership, Shriram Finance has strengthened its market position and
diversified its product offerings.
 Joint Managing Director & Chief Financial Officer (CFO): Parag Sharma
 Parag Sharma serves as the Joint Managing Director and CFO, overseeing the
company's financial operations and strategies. His expertise has been crucial in
maintaining the company's financial health and ensuring robust risk management
practices.
 Company Secretary & Compliance Officer: U. Balasundararao
 U. Balasundararao manages corporate governance and compliance matters, ensuring
that Shriram Finance adheres to regulatory standards and best practices.
 Joint Managing Director (not being part of the Board): S. Sunder
 S. Sunder holds the position of Joint Managing Director, contributing to the
company's operational strategies and business development initiatives.

HB Stockholdings Ltd.

 Mr. Lalit Bhasin – Chairman: Mr. Bhasin is a first-class commerce graduate from
Shri Ram College of Commerce, Delhi University. With nearly two decades of
experience in investments and capital markets, he also serves on the Audit Committee,
Nomination & Remuneration Committee, and Stakeholders Relationship Committee.

 Mr. Anil Goyal – Managing Director: A fellow member of the Institute of Chartered
Accountants of India, Mr. Goyal brings over 20 years of expertise in finance, taxation,
investment banking, corporate restructuring, and strategic planning. He is also a
member of the Stakeholders Relationship Committee.
  Mr. Ashish Kapur – Director: Mr. Kapur holds a commerce degree from Panjab
University and an MBA in Finance from NarseeMonjee Institute of Management
Studies (NMIMS). With over two decades of experience in finance, investments, and
capital markets, he began his career in 1993 with Jardine Fleming India as AVP
Capital Markets and serves on the boards of several other companies.

 Mrs. Asha Mehra – Director: A postgraduate from Bombay University and a

qualified IAS officer, Mrs. Mehra has held prestigious positions within the
Government of India, including Assistant/Deputy Commissioner of Income Tax and
Chief Commissioner of Income Tax, Rajasthan. She chairs the Audit Committee and is
a member of the Nomination & Remuneration Committee and Corporate Social
Responsibility Committee.

 Mrs. Urvija Shah – Director: Holding a law degree and a postgraduate degree in
commerce, along with diplomas in Banking, Taxation, and Labour Laws, Mrs. Shah
has over 16 years of diversified experience in corporate and securities laws.

 Mr. Yash Kumar Sehgal – Director: A graduate in English (Hons) and a member of
the Chartered Institute of Bankers, London, Mr. Sehgal has extensive experience in
finance, having held various positions at the Commercial Bank of Kuwait for over two
decades. He also served as Acting Director of Administration & Finance at the College
of Banking & Financial Studies, Muscat, reporting directly to the Governor of the
Central Bank of Oman.

2. Ladderup Finance Ltd.

 Mr. Sunil Goyal – Managing Director: Mr. Goyal is a Chartered Accountant with
over 25 years of experience in financial services, including investment banking,
corporate finance, and advisory services. He has been instrumental in steering
Ladderup Finance Ltd. towards growth and diversification in financial services.

 Mr. Rajeev Thakkar – Director: Mr. Thakkar holds a degree in Chartered

Accountancy and has extensive experience in investment management and financial
analysis. He plays a key role in the strategic decision-making processes at Ladderup
Finance Ltd.
3. Futuristic Solutions Ltd.

 Mr. Sandeep Kumar – Managing Director: Mr. Kumar has a background in law
and over 20 years of experience in legal consultancy and financial services. Under his
leadership, Futuristic Solutions Ltd. has focused on providing innovative financial
solutions and legal advisory services.

 Ms. Priya Sharma – Director: Ms. Sharma holds an MBA in Finance and has over
15 years of experience in financial management and corporate strategy. She
contributes significantly to the company's financial planning and strategic initiatives.

4. Aastamangalam Finance Ltd.

 Mr. Ramesh Iyer – Chairman: Mr. Iyer has a master’s degree in business
administration and over 30 years of experience in the financial sector. He has been
pivotal in shaping the company's vision and expanding its reach in the financial
market.

 Ms. Anjali Desai – CEO: Ms. Desai holds a degree in Economics and an MBA in
Finance. With over 20 years in banking and financial services, she leads the
company's operations and strategic growth initiatives.

5. Gowra Leasing and Finance Ltd.

 Mr. Gowra Srinivas – Managing Director & Executive Director: Mr. Srinivas
holds an M.Sc degree and has been the Managing Director since August 1, 2006, and
an Executive Director since March 26, 2003. He also serves as a Director in other
capacities.

 Mr. Alamuru Venkata Rama Rao – Chief Financial Officer: Serving as the CFO
for over a decade, Mr. Rao has been instrumental in overseeing the company's
financial operations.

 Mr. Zafar Khan – Compliance Officer & Company Secretary: With more than
seven years in his current role, Mr. Khan ensures regulatory compliance and manages
corporate governance matters.
  Mr. Chandrasekhar Suresh – Chairman & Independent Director: Appointed as
Chairman and Independent Director, Mr. Suresh brings over two years of leadership
experience to the board.

 Mr. Gowra Lakshminarayana – Non-Executive Director: With a tenure exceeding

three decades, Mr. Lakshminarayana has been a longstanding member of the board.

 Mr. Gowra Prasad – Non-Executive Director: Also serving for over 31 years, Mr.
Prasad contributes extensive experience to the company's strategic direction.

Below are detailed profiles of distinguished top management personnel from two such
companies: HB Stockholdings Limited and Gowra Leasing & Finance Limited.

1. HB Stockholdings Limited

 Mr. Naresh Khanna – Vice President of Investments & Manager: Mr. Khanna has
been serving as the Vice President of Investments and Manager at HB Stockholdings
Limited since February 22, 2021. He is a Commerce Graduate from the prestigious
Shri Ram College of Commerce (SRCC), University of Delhi. With over three years
in his current role, Mr. Khanna has been instrumental in overseeing the company's
investment strategies and managing its financial portfolio. His leadership has
contributed significantly to the firm's growth and stability in the competitive NBFC
sector.

2. Gowra Leasing & Finance Limited

 Mr. Gowra Srinivas – Managing Director & Executive Director: Mr. Srinivas
holds a Master of Science (M.Sc) degree and has been associated with Gowra Leasing
& Finance Limited for over three decades. He has been serving as the Managing
Director since August 1, 2006, and as an Executive Director since March 26, 2003.
Mr. Srinivas also serves as a Director in other capacities, bringing a wealth of
experience and leadership to the company. His extensive tenure reflects his deep
commitment to the organization's vision and growth.

2.5 CSR POLICY

In India, Corporate Social Responsibility (CSR) obligations for companies, including Non-
Banking Financial Companies (NBFCs), are governed by Section 135 of the Companies Act,
2013. According to this section, companies meeting certain financial thresholds are mandated
to allocate a minimum of 2% of their average net profits from the preceding three financial
years towards CSR activities.

Bajaj Finance Limited: The company's CSR initiatives primarily target the holistic
development of children and youth, emphasizing health, education, skill development,
environmental sustainability, and community welfare.

1. Skill Development and Employability

Bajaj Finance's flagship CSR program, the Certificate Programme in Banking, Finance, and
Insurance (CPBFI), is designed to enhance the employability of first-generation graduates
from smaller towns and rural areas. This 100-hour certification course equips final-year
undergraduate students and fresh graduates with the necessary skills and knowledge for
various roles in the financial services industry. In the fiscal year 2023, 10,781 individuals
enrolled in the CPBFI program.

2. Livelihood Enhancement

The company supports community-based livelihood programs aimed at increasing household

incomes of rural, tribal, and migrant populations. These initiatives encompass activities such
as farming, animal husbandry, fishery, beekeeping, and goat and sheep farming. In FY2023,
approximately 118,350 individuals benefited from these livelihood initiatives.

3. Environmental Sustainability

Bajaj Finance is dedicated to environmental conservation through various initiatives:

 Solar Energy Adoption: The company has installed solar panels with a capacity of
626.8 kilowatts to reduce its carbon footprint.

 Afforestation Efforts: A total of 345,000 saplings have been planted to promote

green cover and biodiversity

 Electric Vehicle Integration: Bajaj Finance has introduced 20 electric vehicles for
inter-office shuttle services and has financed over 54,000 electric vehicles,
encouraging sustainable transportation.

4. Healthcare Initiatives

The company addresses healthcare challenges through various programs:

  Support for Children with Epilepsy: Partnering with healthcare organizations, Bajaj
Finance has provided support for critical surgeries and medicinal assistance to over
300 children affected by epilepsy.

 Skilling Healthcare Professionals: Initiatives have been introduced to strengthen

healthcare manpower in collaboration with various partners.

 Hospital Infrastructure Enhancement: The company has equipped hospitals with

advanced paediatric equipment, improving care for children battling heart conditions
and cancer.

5. Support for Persons with Disabilities

Bajaj Finance's programs aim to rehabilitate individuals with physical, intellectual, and
learning disabilities, facilitating their inclusion into mainstream society. Interventions include
early rehabilitation, educational and medical support, community rehabilitation, provision of
residential homes, and accessible infrastructure. Over 99,000 individuals with disabilities
have benefited from these programs.

6. Bajaj Beyond Initiative

In March 2024, the Bajaj Group launched 'Bajaj Beyond,' committing ₹5,000 crore over five
years to social impact programs, with a significant focus on skill development. This initiative
aims to benefit over two crore youth, enhancing their employability and entrepreneurial
skills.

Through these diverse initiatives, Bajaj Finance Limited demonstrates a profound

commitment to fostering sustainable development and enhancing the quality of life in
communities across India.

IRFC

IRFC's CSR and Sustainability Policy mission is to contribute to a "clean, green, educated,
and capable India" through various initiatives. The policy emphasizes priority areas such as
safe drinking water, sanitation, health, education, and capacity building, particularly
benefiting marginalized and underprivileged sections of society.

1. Healthcare Infrastructure Enhancement

IRFC has invested in developing and upgrading medical facilities, exemplified by its
contribution to the Baranagar Municipality Hospital in Kolkata, West Bengal. The company
funded infrastructure development, refurbishment of existing facilities, and the supply of
essential medical equipment, thereby improving healthcare access for the local community.

2.Educational Support

In the realm of education, IRFC has supported the construction of school buildings and
provided necessary resources such as furniture and computers. A notable project includes
part-funding the construction of a school in Wazirpur, Gurgaon district, catering to
underprivileged sections of society.

3.Environmental Sustainability

IRFC has undertaken several environmental initiatives in collaboration with Indian Railways:

 Waste Water Recycling Plants: Development of recycling facilities at major

railway stations, including New Delhi and Delhi Railway Stations, to promote water
conservation.

 Rainwater Harvesting Systems: Installation of rainwater harvesting infrastructure at

stations such as New Delhi, Anand Vihar Terminal, Hazrat Nizamuddin, and
Safdarjung, aiding in groundwater recharge and sustainable water management.

4.Green Bond Issuance

Demonstrating its commitment to sustainable finance, IRFC issued its first Climate Bonds
Certified Green Bond in December 2017, raising USD 500 million. The proceeds are
allocated to fund eligible green projects, including dedicated freight railway lines and public
passenger transport, supporting India's transition to a low-carbon transportation
infrastructure.

5.Menstrual Hygiene Awareness Program

Under its CSR initiatives, IRFC funded a project in collaboration with Nirman Foundation to
promote menstrual hygiene awareness in 200 schools across seven aspirational districts in
Bihar. The project involved installing sanitary pad vending machines and incinerators,
ensuring easy access to sanitary products and proper disposal methods, thereby reducing
absenteeism among schoolgirls and promoting their health and education.
6.Focus on Health and Nutrition

In line with the Department of Public Enterprises (DPE) guidelines for the year 2023-24,
which emphasized spending on "Health & Nutrition," preferably in aspirational districts,
IRFC allocated approximately 67.27% of its total CSR expenditure towards initiatives in this
sector. Projects included providing healthcare facilities through medical equipment, green
energy initiatives, education, environmental sustainability, contributions to various funds, and
measures benefiting armed forces veterans, war widows, and their dependents.

Through these diverse initiatives, IRFC exemplifies its role as a responsible corporate entity,
dedicated to fostering sustainable development and enhancing the quality of life for
communities across India.

Bajaj Holdings

BHIL's CSR policy underscores its dedication to ethical principles, human rights protection,
environmental stewardship, and enhancing the quality of life for all stakeholders, including
local communities and society at large. The policy emphasizes initiatives in health, education,
environmental sustainability, and rural development, with a focus on marginalized and
underprivileged sections of society. It also highlights the importance of economic
empowerment through grassroots capacity building, particularly in rural India.

1. Health and Sanitation

BHIL supports projects aimed at improving healthcare infrastructure, providing medical

equipment, and facilitating access to quality healthcare services in underserved areas.
Initiatives may include organizing health camps, supporting maternal and child health
programs, and promoting sanitation and hygiene practices.

2. Education and Skill Development

The company invests in educational programs that enhance learning outcomes, provide
scholarships to meritorious and needy students, and support vocational training centres.
These efforts aim to equip individuals, especially youth, with skills that enhance
employability and promote self-reliance.

3. Environmental Sustainability
BHIL engages in activities such as afforestation, water conservation, and promoting
renewable energy sources. These initiatives contribute to environmental conservation and aim
to mitigate the impacts of climate change.

4. Rural Development

The company supports comprehensive rural development programs that focus on improving
livelihoods, infrastructure, and overall quality of life in rural communities. This includes
initiatives like building community centers, supporting self-help groups, and promoting
sustainable agricultural practices.

Chola Invest

Chola's CSR initiatives are designed to foster sustainable development and enhance the
quality of life for underserved communities across the country. Their programs span various
domains, including health, education, environmental sustainability, and rural development,
with a presence in 12 states: Tamil Nadu, Delhi-NCR, Maharashtra, Assam, Karnataka,
Chhattisgarh, Odisha, Uttar Pradesh, Telangana, Rajasthan, West Bengal, and Madhya
Pradesh.

1. Health

 Project Raahi – Trucker Eye Health Program: This flagship initiative aims to
safeguard the vision of commercial vehicle crew members (CVCMs) by providing free
eye examinations and spectacles. Implemented in collaboration with the Royal
Commonwealth Society for the Blind, the program operates in multiple locations,
including Paradeep, Kolkata, Ludhiana, Kanpur, and Indore.

 Little Hearts – Paediatric Cardiac Surgeries: Chola supports free-of-cost treatment for
children of CVCMs suffering from congenital heart disease. Partnering with the Sri
Sathya Sai Health and Education Trust, this initiative has provided life-saving surgeries
in states like Chhattisgarh, Haryana, and Maharashtra.

 Maternal Health Program: This program offers free maternal and newborn care
services to women from CVCM families. Through the Sri Sathya Sai Sanjeevani Mother
& Child Hospital (Mamatva), pregnant mothers receive comprehensive care over nine
months, aiming to reduce neonatal and maternal mortality rates.
2. Water and Sanitation - Swaccha Telangana Project: Chola arranges purified drinking
water for remote villages by installing 'Any Time Water' (ATW) ultra-filtration plants.
This initiative is implemented in partnership with Bala Vikasa Social Service Society.

3. Education

 My Dream Scholarship Program: Aimed at children from the trucking community, this
program provides scholarships for college education, technical education, or higher
studies, empowering underprivileged students in Salem, Tamil Nadu.

 Classroom Construction: Chola has funded the construction of classrooms at the

Government Girls Higher Secondary School in Mogappair, Chennai, facilitating higher
education access for girls from weaker sections of society.

4. Arts and Culture - Arts Education Programme Elements: This project integrates arts
education into students' development, encouraging exploration of local arts and cultural
practices. Implemented in Bangalore, Karnataka, in partnership with the India Foundation
for the Arts.

5. Sports - Supporting Women Golfers: Chola sponsors female golfers, aiding their
training and development to compete successfully in larger arenas. This initiative is
implemented in Karnataka and New Delhi.

6. Rural Development- Farmer Producer Organizations (FPOs): This initiative aims to

transform farmers' lives by providing technical, financial, and marketing support,
promoting sustainable agricultural practices in Chennai, Tamil Nadu, in collaboration
with the ISHA Foundation.

7. Environmental Sustainability - Conservation Programs: Chola supports conservation

efforts in high-altitude regions like Spiti and marine ecosystems, focusing on biodiversity
preservation and sustainable resource management.

Through these diverse initiatives, Cholamandalam Investment and Finance Company Limited
exemplifies its dedication to social responsibility, striving to create a positive and lasting
impact on communities across India.
Shriram Finance

1. Educational Support - Scholarship Scheme: Shriram Finance provides scholarships to

talented students from weaker sections of society, aiming to make learning more
stimulating and help children achieve higher educational levels and a better future.

2. Skill Development - Drivers' Training Program: The company invests in training and
skill development programs for truck drivers, enhancing their employability and
promoting road safety.

3. Community Welfare

 Sanitation and Healthcare: Shriram Finance prioritizes sanitation infrastructure and

healthcare initiatives, contributing to the Swachh Bharat Kosh and supporting projects
that provide safe drinking water and promote preventive healthcare.

 Rural Development: The company engages in rural development projects that aim to
improve the quality of life in underdeveloped regions through infrastructure
development and livelihood enhancement programs.

Shriram Finance collaborates with various implementing agencies and partners to execute its
CSR initiatives effectively. The CSR Committee regularly monitors the progress of these
projects, ensuring transparency and accountability in the utilization of funds and the
achievement of desired outcomes.

Through these concerted efforts, Shriram Finance Limited exemplifies its dedication to social
responsibility, striving to create a positive and lasting impact on communities across India.

HB Stockholdings

HB Stockholdings Limited is committed to corporate social responsibility (CSR) and has

undertaken various initiatives over the years. In the financial year 2022-2023, the company
was required to spend ₹11.34 lakhs on CSR activities and exceeded this obligation by
spending ₹11.50 lakhs. These funds were allocated to promoting healthcare, education, and
eradicating hunger.

During the financial year 2016-2017, HB Stockholdings was required to spend ₹4.22 lakhs
on CSR activities and contributed ₹4.31 lakhs to the Earth Saviour Foundation, supporting
the procurement of modern kitchen appliances and outdoor lighting for their Old Age Home
near Gurgaon. However, in the financial year 2023-2024, the company reported a net loss of
₹195.84 lakhs, resulting in no mandatory CSR expenditure for that year.

HB Stockholding’s CSR policy focuses on areas such as eradicating hunger, promoting

education, and enhancing healthcare. The company prioritizes initiatives in Haryana and
other regions where it operates, demonstrating its commitment to community development.

Futuristic Solutions Limited

Regarding Corporate Social Responsibility (CSR), the company's Directors' Report for the
financial year 2023-2024 states that Section 135 of the Companies Act, 2013, which
mandates certain companies to undertake CSR activities, does not apply to Futuristic
Solutions Limited. As a result, the company has not reported any CSR initiatives.

Corporate Social Responsibility (CSR) is governed by Section 135 of the Companies Act,
2013 in India. A company is required to undertake CSR activities if it meets any of the
following financial criteria in the preceding financial year:

1. Net worth of ₹500 crore or more, OR

2. Turnover of ₹1000 crore or more, OR

3. Net profit of ₹5 crore or more

Since Futuristic Solutions Limited has stated that Section 135 is not applicable to them, this
means that the company does not meet any of the above financial thresholds. As a result, they
are not legally required to allocate funds for CSR initiatives or report any CSR activities.

Aastamangalam Finance LTD

Aastamangalam Finance Limited, formerly known as Upasana Finance Limited, has indicated
in its Directors' Report that it does not meet the financial thresholds specified under Section
135 of the Companies Act, 2013 for mandatory Corporate Social Responsibility (CSR)
activities. As a result, the company is not required to constitute a CSR Committee or
implement a formal CSR policy.
While Aastamangalam Finance Limited is exempt from mandatory CSR obligations, it has
established a Whistle Blower Policy (Vigil Mechanism). This policy provides a framework
for stakeholders to report instances of unethical behavior, actual or suspected fraud, or
violations of the company's Code of Conduct. It ensures protection for individuals who raise
concerns and offers direct access to the Chairman of the Audit Committee.

Ladderup Finance

The CSR Policy emphasizes the company's dedication to contributing positively to society by
focusing on areas such as education, healthcare, environmental sustainability, and rural
development projects. The policy also details the governance structure for CSR initiatives,
including the formation of a CSR Committee responsible for overseeing and implementing
various projects.

Gowra Leasing and Finance LTD

GLFL stated that it was not required to constitute a CSR Committee, as the company did not
meet any of the thresholds mentioned in Section 135 of the Companies Act, 2013, during the
financial year under review. Consequently, reporting on CSR policies and initiatives was
deemed not applicable.

The company has adopted a Whistle Blower Policy to provide employees with a platform to
raise concerns about unethical practices or wrong conduct. This policy ensures protection
against reprisals or victimization for those who report such issues.

2.6 Social Inclusion & Environmental Initiatives of Five Companies

Bajaj Finance

Social Inclusion: Skilling programs for youth, child welfare (cleft care, education).

Environment: Supports solar energy projects in Ladakh & Kargil.

IRFC

Social Inclusion: Funds community infrastructure (hospitals, schools).

Environment: Wastewater recycling, rainwater harvesting at railway stations.

Bajaj Holdings

Social Inclusion: Rural healthcare & education programs.

Environment: Water conservation, renewable energy initiatives.

Chola Invest

Social Inclusion: Health programs for truckers, support for underserved communities.

Environment: Sustainability included in CSR initiatives.

Shriram Finance

Social Inclusion: Scholarships, vocational training, mobile health clinics for truckers.

Environment: Focus on sustainability, though specific projects are unclear.

Chapter 3:
External
Environment
3.1. Controlling ministry /regulator for the industry
In terms of Section 45-IA of the RBI Act, 1934, no Non-banking Financial company can
commence or carry on business of a non-banking financial institution without obtaining a
certificate of registration from the Bank and without having a Net Owned Funds of ₹ 25
lakhs (₹ Two crore since April 1999).

However, in terms of the powers given to the Bank, to remove dual regulation, certain
categories of NBFCs which are regulated by other regulators are exempted from the
requirement of registration with RBI viz. Venture Capital Fund/Merchant Banking
companies/Stock broking companies registered with SEBI, Insurance Company holding a
valid Certificate of Registration issued by IRDA, Nidhi companies as notified under Section
620A of the Companies Act, 1956, Chit companies as defined in clause (b) of Section 2 of
the Chit Funds Act, 1982,Housing Finance Companies regulated by National Housing Bank,
Stock Exchange or a Mutual Benefit company.

In India, Non-Banking Financial Companies (NBFCs) are primarily regulated by the Reserve
Bank of India (RBI) under the provisions of the Reserve Bank of India Act, 1934 and other
relevant laws.

Regulation and Controlling Ministry:

 Reserve Bank of India (RBI) – The main regulator for NBFCs, overseeing their
registration, prudential norms, governance, and compliance.
 Ministry of Finance (Government of India) – The Department of Financial
Services (DFS) under the Ministry of Finance plays a role in policymaking and
legislative matters related to NBFCs.
  Securities and Exchange Board of India (SEBI) – Regulates NBFCs involved in
capital market activities.
 Insurance Regulatory and Development Authority of India (IRDAI) – Regulates
NBFCs that deal with insurance-related activities.
 National Housing Bank (NHB) – Regulates Housing Finance Companies (HFCs),
though RBI now has direct oversight over them.
 State Governments – Certain NBFCs such as Chit Funds and Money Lending
NBFCs are regulated under state laws.

3.2 Regulatory Policies at the state, national and global level and
their impact on the industry as a whole.

1. State-Level Regulations :

While NBFCs are primarily governed by national-level regulations, state governments also
influence their operations in the following ways:

1. Money Lenders Acts (State-Specific) : Some states have specific laws governing NBFC
lending practices, especially those catering to microfinance and small borrowers.

Example: The Andhra Pradesh Microfinance Institutions (Regulation of Money Lending)

Act, 2010 imposed strict regulations on microfinance NBFCs, leading to a liquidity crisis
in the sector.

Impact: Increased compliance burden and operational challenges for NBFCs operating
across multiple states.

2. State-Level Taxation and Stamp Duties :

States impose stamp duties on loan agreements, impacting the cost of lending for NBFCs.

Impact: Higher transaction costs and regional variations in lending costs.

3. State Government Loan Waivers :

 Some states announce loan waivers for farmers and MSMEs, affecting NBFC repayment
collections.

Impact: Increases non-performing assets (NPAs), reduces liquidity, and raises lending
risks.

2. National-Level Regulations :

NBFCs in India are primarily regulated by the Reserve Bank of India (RBI) under the RBI
Act, 1934, and other regulatory frameworks.

1. RBI Regulations :

Classification & Capital Adequacy Norms: NBFCs are categorized into Deposit-taking
(NBFC-D) and Non-Deposit taking (NBFC-ND) entities.

Scale-Based Regulation (SBR) Framework (2022): Classifies NBFCs into Base Layer,
Middle Layer, Upper Layer, and Top Layer, with stricter capital and compliance norms
for larger entities.

Impact: Enhanced financial stability but increased compliance burden.

Liquidity and Risk Management Norms:

RBI introduced the Liquidity Coverage Ratio (LCR) for large NBFCs to maintain a
minimum high-quality liquid assets reserve.

Impact: Strengthens liquidity but reduces available funds for lending.

Asset Classification and NPA Recognition:

New NPA norms (2021): NBFCs must recognize NPAs on a daily rather than a quarterly
basis.

Impact: Stricter provisioning requirements may strain NBFC profitability.

2. SEBI & MCA Regulations :

SEBI (Securities and Exchange Board of India):

Regulates NBFCs that are publicly listed.

Stricter corporate governance norms impact large NBFCs like Bajaj Finance, L&T Finance,
etc.

 Ministry of Corporate Affairs (MCA):Governs compliance with Companies Act,

2013, affecting NBFC governance and financial reporting.
 Impact: Enhanced transparency but increased regulatory burden.

3. Insolvency & Bankruptcy Code (IBC) :

 NBFCs with over ₹500 crore in asset size are subject to IBC proceedings in case of
insolvency.
 Example: Dewan Housing Finance Corporation Ltd. (DHFL) was resolved under
IBC.
 Impact: Strengthened resolution mechanism but increased compliance costs.

4. GST & Taxation Policies :

 GST on financial services (18%) affects NBFC service charges.

 TDS on interest income impacts lending rates.
 Impact: Higher operational costs passed on to borrowers.

3. Global-Level Regulations :

NBFCs are indirectly impacted by global regulatory frameworks such as Basel norms, FATF
guidelines, and international economic policies.
1. Basel III Norms :

 While Basel norms are mandatory for banks, RBI has introduced Basel-like capital
adequacy norms for large NBFCs.
 Impact: Strengthens financial health but increases capital costs.

2. FATF & AML Compliance :

 Financial Action Task Force (FATF) guidelines on Anti-Money Laundering (AML)

and Combating Financing of Terrorism (CFT) are enforced by RBI.
 Impact: Increased due diligence and compliance costs.

3. Foreign Investment Policies :

FDI in NBFCs: 100% FDI is allowed under the automatic route in most NBFC
categories.

ECB (External Commercial Borrowing) Norms: NBFCs can raise funds from
foreign lenders but must meet specific conditions.

Impact: Encourages foreign capital inflows but limits excessive risk-taking.

Impact Analysis on Key NBFC’s.

1. Bajaj Finance :

Bajaj Finance, one of India's largest consumer lending NBFCs, has been affected by
stricter capital adequacy requirements and NPA provisioning norms, reducing its
lending flexibility.

2. IRFC Ltd :

IRFC Ltd, which primarily finances the Indian Railways, faces lower regulatory risks
due to its government-backed model but is still subject to SEBI disclosure norms.

3. Chola Invest :
 Benefited from better investor confidence post stricter governance norms. NPA
recognition changes affect vehicle finance portfolio. Higher provisioning lowers
short-term profitability.
4. Bajaj Holdings :
Bajaj Holdings, an investment-focused NBFC, is impacted by higher taxation on
NBFC investments and SEBI governance mandates, influencing its overall financial
performance.

5. Shriram Finance :
Shriram Finance, with a strong focus on vehicle and SME financing, are more
vulnerable to stricter NPA classification norms and provisioning requirements,
affecting their profitability.

Impact Analysis on Bottom NBFC’s.

1. HB Stockholding :
As an investment-focused NBFC, HB Stockholdings is primarily affected by SEBI’s
governance norms and RBI’s capital adequacy requirements. PA recognition and
provisioning requirements have limited its flexibility in asset management. Stricter
liquidity norms indirectly affect funding availability from banks and institutional
investors.

2. Ladderup Finance :

Being an NBFC focused on investment and advisory services, its key challenges stem
from SEBI’s compliance norms and taxation policies. Higher taxation on investment
income and capital adequacy requirements impact profitability. Increased scrutiny on
financial transactions due to AML and KYC regulations affects ease of business
operations.

3. Futuristic Solutions Ltd :

 This company, engaged in legal and financial solutions, is impacted by state-level
money lending laws that dictate lending terms and recovery processes. SEBI and RBI
disclosure norms increase compliance costs for this small-scale listed NBFC. Limited
access to external funding due to cautious lending by banks and restrictions on
unsecured loans.

4. Aastamangalam Finance Ltd:

Since it operates in the financial lending sector, strict NPA norms and liquidity
requirements make credit recovery more challenging. Loan waivers in states where it
operates may lead to higher NPAs and affect repayment cycles. Lack of access to
foreign capital makes it more dependent on domestic borrowing, which is becoming
costlier.

5. Gowra Leasing and Finance Ltd :

As a leasing and finance NBFC, it is directly impacted by RBI’s risk-based capital

requirements and NPA recognition policies. Basel-like capital adequacy norms
require it to maintain higher capital reserves, affecting profitability. Limited investor
interest due to higher compliance risks and funding constraints.

3.3 Key National and Global Issues Affecting the NBFC Finance Industry
in India

Non-Banking Financial Companies (NBFCs) play a crucial role in India's financial ecosystem
by bridging the gap between traditional banking and financial inclusion. However, the NBFC
sector faces several challenges, both domestically and globally, that impact its growth,
stability, and regulatory environment. This document outlines key national and global issues
affecting the NBFC finance industry in India.

3.3.i. National Issues Affecting the NBFC Sector

Regulatory Changes and Compliance Burden

The RBI has tightened regulations on NBFCs to ensure financial stability. The Scale-Based
Regulation (SBR) framework classifies NBFCs into different categories with varying
compliance requirements. Stricter norms on asset classification and provisioning impact
profitability. The Prompt Corrective Action (PCA) framework imposes restrictions on
financially weak NBFCs. Liquidity Coverage Ratio (LCR) requirements put pressure on
smaller NBFCs. Mandatory audits and reporting increase operational costs.

Liquidity Crunch and Funding Constraints

The IL&FS and DHFL crises have weakened investor confidence, limiting NBFCs’ access to
funds. High borrowing costs and dependence on banks and capital markets create financial
stress. Limited alternative funding sources, such as retail deposits, further constrain liquidity.
Risk aversion among investors affects fundraising through NCDs and CPs. Better refinancing
mechanisms, like government-backed guarantee schemes, are needed. Co-lending
partnerships with banks help mitigate funding challenges.

Asset Quality and Rising NPAs

Economic slowdowns have led to rising NPAs, especially in real estate and microfinance.
Defaults in unsecured retail loans and MSME lending have increased. RBI’s restructuring
norms may temporarily mask actual stress in asset quality. Higher delinquency rates are
observed in vehicle loans and affordable housing finance. Income volatility in the informal
sector affects timely repayments. The RBI is focusing on early warning systems for potential
defaults.

Technology and Cybersecurity Challenges

Digital transformation is necessary for NBFCs but requires significant investment. Cyber
threats, data breaches, and fraud risks have increased in digital lending. Stricter regulatory
compliance is needed, especially in fintech collaborations. Unregulated digital lending apps
raise concerns over unethical practices. AI and machine learning are being adopted for credit
risk assessment. Strengthening data protection frameworks is essential to safeguard consumer
data.

Competition from Banks and Fintech Companies

Banks are expanding into microfinance and small business lending, challenging NBFCs.
Fintech firms offer quick digital lending solutions, increasing competition. BNPL schemes
are disrupting traditional consumer finance models. NBFCs must adopt digital platforms and
strategic fintech partnerships to stay competitive. Embedded finance solutions offer new
opportunities in digital lending. Innovation and adaptability are crucial for NBFCs to sustain
growth.

Inflation and Economic Slowdown

High inflation has raised borrowing costs and reduced consumer demand. Economic
slowdowns have impacted discretionary spending and credit uptake. Rising fuel prices and
supply chain disruptions hurt industries relying on NBFC financing. Real estate volatility
affects housing finance companies. Lower disposable income reduces demand for auto loans
and consumer durables. Government stimulus packages are essential to revive credit growth.

3.3.ii. Global Issues Affecting the NBFC Sector

Global Interest Rate Trends and Monetary Policy

Rising global interest rates have increased borrowing costs for NBFCs. The U.S. Federal
Reserve and ECB policies impact global liquidity. FPI outflows reduce capital availability for
Indian financial institutions. A stronger U.S. dollar increases repayment costs for dollar-
denominated borrowings. External commercial borrowings (ECBs) have become more
expensive. NBFCs must explore alternative funding options to manage risks.

Geopolitical Uncertainty and Trade Wars

Global conflicts, such as the Russia-Ukraine war, affect crude oil prices and inflation. Supply
chain disruptions impact industries financed by NBFCs. Currency fluctuations create
challenges for foreign funding sources. Geopolitical instability reduces FDI in India’s
financial sector. Tighter global credit markets affect overseas investments in Indian NBFCs.
Uncertainty forces NBFCs to reassess risk management strategies.

Global Economic Slowdown and Recession Fears

A global slowdown in the U.S., Europe, and China affects investor sentiment. Declining FDI
inflows impact the Indian financial sector. Trade finance and export credit face increasing
risks. Reduced consumer demand in global markets affects NBFC-financed businesses.
Lower NRI remittances impact liquidity in the financial system. NBFCs must diversify
revenue sources to mitigate economic risks.
Climate Change and ESG Compliance

ESG factors are gaining importance in financial regulations. NBFCs must align with
sustainable finance norms to attract investments. Green financing and impact investing are
being encouraged. Transition risks affect NBFCs financing fossil fuel-dependent industries.
ESG risk assessment is becoming essential in credit underwriting. Funding renewable energy
and sustainable projects can provide growth opportunities.

Technological Disruptions and Digital Transformation

AI, blockchain, and cloud computing are reshaping financial services. NBFCs must invest in
digital lending platforms to enhance efficiency. Regulatory scrutiny on digital lending is
increasing. CBDCs could impact NBFC operations in the future. Open Banking initiatives
improve credit access and risk assessment. UPI integration enables seamless digital
transactions for NBFCs.

Government and Regulatory Measures

The RBI is strengthening NBFC supervision through risk-based audits. Co-lending models
with banks improve credit accessibility. NBFC participation in priority sector lending
supports financial inclusion. Stricter regulations ensure responsible digital lending practices.
The Account Aggregator (AA) framework enhances data-sharing for credit underwriting.
MSME financing and rural credit expansion receive policy support.

Future Outlook and Recommendations

NBFCs must diversify funding sources, including retail deposits and bond markets.
Strengthening risk assessment and AI-driven credit models is crucial. Adapting to regulatory
changes ensures long-term stability. Digital transformation and cybersecurity investments are
necessary. Aligning with ESG norms will attract global investors. Sustainable finance will
drive the future of the NBFC sector.

3.4. Government Initiatives to Promote the NBFC Sector in India

The Indian government, along with the Reserve Bank of India (RBI) and other regulatory
bodies, has implemented various measures to support, regulate, and enhance the growth of
NBFCs. These initiatives focus on liquidity support, regulatory frameworks, financial
inclusion, and digital transformation.

1. Liquidity Support Measures

Liquidity crunch or shortage of cash has been a major challenge for NBFCs, especially after
the IL&FS crisis (2018). The government has introduced several initiatives to improve
liquidity:

a) Partial Credit Guarantee Scheme (PCGS)

PCGS was launched in 2019 and extended in 2020 to help NBFCs raise funds. The
government provided a partial guarantee to banks for first-loss defaults in the purchase of
pooled assets of financially sound NBFCs. It covered assets of up to ₹1 lakh crore, providing
liquidity support to small and medium NBFCs.

b) Special Liquidity Scheme (SLS)

SLS was introduced in 2020 during COVID-19 to support NBFCs, ₹30,000 crore liquidity
support was provided through Special Purpose Vehicles (SPVs).The funds were distributed
through short-term papers (Commercial Papers & Non-Convertible Debentures).

2. Strengthening Regulation and Supervision

NBFCs are regulated by RBI to ensure financial stability and prevent risks. Key regulatory
initiatives include:

a) Scale-Based Regulation (SBR) Framework (2021)

RBI introduced a new classification system for NBFCs:

o Base Layer: Small NBFCs (Microfinance & Investment Companies).

o Middle Layer: Systemically important NBFCs.

o Upper Layer: Large NBFCs (which may be converted into banks in the future).

o Top Layer: Potentially high-risk NBFCs under RBI scrutiny.

The SBR framework helps differentiate regulations based on size and risk profile.

b) Revised Prudential Norms for NBFCs

o Capital Adequacy Ratio (CAR): Minimum capital requirement for systemically

important NBFCs is 15%.
o Asset Classification: Loans overdue for more than 90 days are classified as Non-
Performing Assets (NPAs).
o Large Exposure Framework: Restrictions on lending to a single borrower to mitigate
risk.

c) Linking NBFCs with Credit Bureaus

All NBFCs are required to report credit data to CIBIL, Experian, Equifax, and CRIF High
Mark as it helps prevent fraudulent lending and over-borrowing.

3. Facilitating NBFCs to Promote Financial Inclusion

To deepen credit penetration, the government has encouraged NBFCs to expand their lending
operations in rural and semi-urban areas.

a) Priority Sector Lending (PSL) Classification (2020)

Certain NBFCs are allowed to on-lend funds received from banks towards priority sectors
which helps NBFCs access low-cost funds from banks such as Agriculture, MSMEs,
Education, Affordable Housing, etc.

b) Co-Lending Model (CLM)

CLM was introduced in 2020 to enable NBFCs to partner with banks for lending. NBFCs
originate the loan, and banks fund 80% of the loan amount. This helps in extending loans to
MSMEs and rural borrowers at lower rates.

c) MUDRA (Micro Units Development and Refinance Agency) Scheme

Many NBFCs, especially Microfinance Institutions (MFIs), act as intermediaries in the

Pradhan Mantri MUDRA Yojana (PMMY).

This provides collateral-free loans under three categories:

 Shishu (Up to ₹50,000)

 Kishore (₹50,000 to ₹5 lakh)

 Tarun (₹5 lakh to ₹10 lakh)

4. Digital Transformation and Fintech Integration

To encourage digital lending, the government and RBI have implemented policies to regulate
and promote fintech-based NBFCs.

a) Account Aggregator Framework

It was launched in 2021, which allows NBFCs to access a borrower’s financial data (with
consent) for better loan underwriting. Also, helps in digital lending with faster credit
assessment.

b) E-KYC and Aadhaar-Based Lending

NBFCs can use Aadhaar e-KYC and Video-KYC for quick loan processing which reduces
documentation and improves financial inclusion.

c) Open Credit Enablement Network (OCEN)

OCEN helps NBFCs integrate with digital lenders and fintech platforms to provide credit to
MSMEs which aims to democratize credit access in India.

3.4. Regulatory Actions Against NBFC Players from the top 5 and bottom 5 companies:

1. Bajaj Finance

RBI Action (2018): In 2018, the RBI imposed a penalty of Rs 5 crore for violating norms
related to the classification of non-performing assets (NPAs) and for deficiencies in adhering
to KYC (Know Your Customer) guidelines. This action was part of a broader crackdown on
NBFCs to ensure compliance with asset classification and customer verification norms.

RBI Action (2023-2024): In November 2023, the RBI imposed restrictions, prohibiting the
sanction and disbursal of loans under eCOM and Insta EMI Card products. This was due to
non-compliance with RBI’s digital lending guidelines, specifically for not providing Key Fact
Statements to borrowers for eCOM and Insta EMI loans and deficiencies in statements for
other digital loans. The restrictions were lifted on May 2, 2024, after the issues were
addressed (Business Standard, Moneycontrol).

Delhi High Court Arbitration (2020-2025): In February 2025, the Delhi High Court upheld
an arbitration award of Rs 28 crore, along with interest and legal expenses, in a dispute
stemming from a 2015 loan facility extended to a stock trader. The NBFC sold the trader’s
pledged securities in July 2020, despite claims of maintaining adequate margin coverage and
eligibility for the RBI’s COVID-19 moratorium. The arbitrator ruled the sale unlawful,
awarding compensation (Bar and Bench).

2. Chola Invest (Cholamandalam Investment and Finance Company Ltd.)

RBI Action (2014): In 2014, the RBI imposed a penalty of Rs 5 lakh for non-compliance
with KYC norms and for failing to report certain transactions as per anti-money laundering
(AML) guidelines. This was part of a wider RBI initiative to enforce stricter compliance
among NBFCs.

3. Shriram Finance

RBI Action (2016): In 2016, the RBI fined this NBFC Rs 2 crore for violations related to
improper asset classification and evergreening of loans, a practice where new loans are given
to repay old ones to mask NPAs.

RBI Action (2025): In 2025, the RBI imposed a penalty of Rs 5.80 lakh for regulatory
lapses, including the failure to implement a system for periodic review of risk categorization
of accounts and other compliance issues (Economic Times).

4. HB Stockholdings Ltd.

SEBI Action (2012): In 2012, SEBI issued a warning for failing to comply with disclosure
norms under the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997.
The NBFC did not disclose changes in shareholding patterns in a timely manner, though no
monetary penalty was imposed.
Chapter 4:
 Financials

Particulars Formula

Revenue Total Sales / Income from Operations + Other Operating Income

Net Profit
Total Revenue – Total Expenses
Net Profit (after tax and preference dividend) / Number of Outstanding
Earning Per Share
Equity Shares

Return on Investment (Net Profit / Total Assets or Capital Employed) × 100

Basic EPS (Rs.)

(Net Profit – Preference Dividend) / Weighted Avg. Number of Equity Shares
(Net Profit – Preference Dividend) / (Weighted Avg. Equity Shares +
Diluted Eps (Rs.)
Convertible Securities)
Book Value [Excl.
Reval Reserve]/Share (Equity Share Capital + Reserves – Revaluation Reserves) / Number of Equity
(Rs.) Shares

Dividend/Share (Rs.)
Total Dividend Paid / Number of Equity Shares
Gross Profit Margin
(%) (Gross Profit / Net Revenue) × 100
Operating Margin (%) (Operating Profit / Net Revenue) × 100

Net Profit Margin (%) (Net Profit / Net Revenue) × 100

Return on Networth /
(Net Profit / Shareholders’ Equity) × 100
Equity (%)

ROCE (%) (EBIT / Capital Employed) × 100

Return On Assets (%) (Net Profit / Total Assets) × 100

Current Ratio
Current Assets / Current Liabilities

Quick Ratio (Current Assets – Inventories) / Current Liabilities

Debt to Equity Total Debt / Shareholders’ Equity

Interest Coverage
Ratios EBIT / Interest Expense
Asset Turnover Ratio
(%) (Net Revenue / Average Total Assets) × 100
P/E
(Price_to_Earnings) Market Price per Share / Earnings per Share (EPS)

P/B (Price-to-Book) Market Price per Share / Book Value per Share
Enterprise Value / EBITDA (Enterprise Value = Market Cap + Total Debt –
EV/EBITDA
Cash & Equivalents)

P/S Market Capitalization / Net Sales

Financials : TOP 5 Companies

4.1. Bajaj Finance.

1. Profitability :

Particulars 2020 2021 2022 2023 2024

Revenue 26373.77 26668.1 31632.42 41397.38 54969.49
Net Profit 5263.75 4419.82 7028.23 11506.02 14443.53
Earning Per Share 89.77 73.58 116.64 190.53 263.89
Return on
16.28 11.97 16.07 21.16 18.84
Investment

2. Revenues and Margins :

Per Share Ratios Mar-24 Mar-23 Mar-22 Mar-21 Mar-20

Basic EPS (Rs.) 236.89 190.53 116.64 73.58 89.77
Diluted Eps (Rs.) 235.98 189.57 115.79 73 89.07
Book Value [Excl. 1,241.03 899.53 724.56 613.67 538.84
Reval
Reserve]/Share
 (Rs.)
Dividend/Share
36 30 20 10 10
(Rs.)
Face Value 2 2 2 2 2
Gross Profit
70.42 69.01 62.07 58.99 64.79
Margin (%)
Operating Margin
69.17 67.84 60.86 57.77 63.68
(%)
Net Profit Margin
26.27 27.79 22.21 16.57 19.95
(%)
Return on Networth
18.84 21.16 16.07 11.97 16.28
/ Equity (%)
ROCE (%) 14.65 14.76 12.39 12.63 15.55
Return On Assets
3.84 4.18 3.3 2.57 3.2
(%)
Current Ratio 3.19 3.2 3.67 3.41 2.87
Quick Ratio 3.19 3.2 3.67 3.41 2.87
Debt to Equity 3.82 3.99 3.78 3.57 4.02
Interest Coverage
2.07 2.27 2.01 1.67 1.8
Ratios
Asset Turnover
0.17 0.17 0.16 0.16 0.18
Ratio (%)
P/E 30.58 29.48 62.24 69.99 24.68
P/B 5.83 6.24 10.02 8.39 4.11
EV/EBITDA 18.86 19.31 30.53 27.92 15.29
P/S 8.14 8.2 13.84 11.62 5.04
.

3. Trends / Changes :

Financial Performance:

Revenue Growth: The company's revenue has grown at a compound annual growth rate
(CAGR) of approximately 22% over the past five years.
Profit Growth: Net profit has also seen a significant rise, with a CAGR of about 29.4%
during the same period.

Stock Performance:

Share Price Appreciation: The stock has appreciated by approximately 286.93% over the
past five years

Price-to-Earnings (P/E) Ratio: Currently, the P/E ratio stands at 35.39, compared to a five-
year average of 48.58.

Price-to-Book (P/B) Ratio: The current P/B ratio is 6.22, indicating that the stock is trading
at over six times its book value.

Market Position:

 Bajaj Finance has maintained a strong position in the financial services sector,
consistently outperforming many of its peers in terms of profit growth. However, it's
important to note that the stock is trading at relatively high valuation multiples,
reflecting strong investor confidence but also suggesting a premium pricing.
 Overall, Bajaj Finance Limited has exhibited robust growth over the past five years,
marked by significant increases in revenue, profit, and share price, solidifying its
position as a leading player in the financial services industry.

4. Key factors contributing Costs / Ratio Analysis :

1. Cost of Funds: The cost of funds has seen an upward trend, increasing by 70 basis points
to 7.74% in FY2023-24 from 7.04% in the previous fiscal year.

2. Operating Expenses: Operating expenses have risen due to investments in technology and
expansion. In FY2023-24, total expenditure was ₹15,420.33 crore, up from ₹12,076.06 crore
in FY2022-23.

3. Credit Costs: Provisions for loan losses have fluctuated, with a notable increase in Q1
FY2024-25, where provisions rose by 69% year-on-year, leading to a credit cost of 2.12%.
4. Asset Quality: The company's asset quality has shown resilience, with Gross NPA at
1.60% and Net NPA at 0.68% as of March 31, 2022.

In summary, Bajaj Finance's cost ratios over the past five years have been shaped by rising
funding costs, increased operating expenses due to strategic investments, fluctuating credit
costs, and stable asset quality.

Bajaj Finance
Amount (in Crores)

2.5
2
1.5 Revenue (₹ Cr)
1 Net Profit (₹ Cr)
0.5
0
2020 2021 2022 2023 2024
Fiscal Year

4.2. IRFC LTD.

1. Profitability:

Particulars 2020 2021 2022 2023 2024

Revenue (₹ 13,421 15,770 20,298 24,686 27,696

Cr)

Net Profit 3,192 4,416 6,090 6,167 6,412

(₹ Cr)

Earnings Per 3.93 3.66 4.66 4.85 4.91

Share (₹)

Return on 11.92 12.29 14.85 13.93 13.03

Investment
(%)
2. Revenues and Margins:

Particulars Mar-24 Mar-23 Mar-22 Mar-21 Mar-20

Basic EPS (₹) 4.91 4.85 4.66 3.66 3.93

Diluted EPS (₹) 4.91 4.85 4.66 3.66 3.93

Book 37.63 34.79 31.37 27.48 26.06

Value/Share (₹)

Dividend/Share 1.50 1.50 1.40 1.05 0.17

(₹)

Face Value 10 10 10 10 10

Gross Profit - - - - -
Margin (%)

Operating 99.54 99.60 99.40 99.28 99.52

Margin (%)

Net Profit 24.06 26.52 30.00 28.00 26.68

Margin (%)

Return on 13.03 13.93 14.85 12.29 11.92

Networth /
Equity (%)

ROCE (%) 53.32 9.08 48.56 7.25 7.39

Return on Assets 1.32 1.29 1.35 1.16 1.33

(%)

Current Ratio 1.09 2.08 1.06 2.28 3.06

Quick Ratio 1.09 2.08 1.06 2.28 3.06

Debt to Equity 8.38 9.21 9.47 9.00 7.57

Interest Coverage 1.32 1.36 1.43 1.39 1.37

 Ratio

Asset Turnover 0.05 0.05 0.05 0.05 5.01

Ratio

P/E 29.07 5.49 4.60 6.79 -

P/B 3.78 0.76 0.68 0.84 -

EV/EBITD 22.53 19.04 20.62 22.52 -

3.Trends / Changes:

 Revenue and Profit Growth: Revenue almost doubled from FY2020 to FY2024. Net
profit also grew steadily, but the growth rate slowed after FY2022, showing signs of
stabilization.

 Margins: Operating margins stayed very high (around 99%), showing IRFC’s low
cost of operations. However, net profit margins declined slightly, indicating some
pressure on profitability.

 Return Ratios: Return on Net Worth and Return on Assets remained moderate,
slightly declining in recent years—suggesting flat earnings efficiency.

 Leverage: The debt-to-equity ratio remained above 8, showing high reliance on debt.
While this is typical for a financing company, it limits flexibility.

 Liquidity: Current and quick ratios dropped over the years, hinting at reduced short-
term liquidity.
4. Key Factors Affecting Costs / Ratios:

 Debt Dependency: As IRFC is highly debt-funded, interest costs make up a major

part of expenses. Any change in interest rates affects profitability.

 Low Operational Costs: With a simple business model (leasing to Indian Railways),
costs remain very low, keeping margins high.

 Fixed Return Model: Profit growth is limited as the company operates under fixed
returns and long-term agreements.

 Low Asset Turnover: Asset turnover is very low due to capital-intensive and long-
tenure lending structure.
IRFC has performed steadily over the past five years. Its revenue and profit have increased,
but the pace of growth has slowed in the last two years. The company benefits from a low-
cost business model and strong operating margins. However, it is highly dependent on debt,
which limits flexibility and return potential. Liquidity has slightly reduced and return ratios
have stayed moderate. Overall, IRFC is a safe and stable NBFC with consistent earnings,
though not very high returns.

IRFC LTD.
2.5

2
Amount (in Crores)

1.5
Revenue (₹ Cr)
Net Profit (₹ Cr)
1

0.5

0
2020 2021 2022 2023 2024

Fiscal Year
4.3. Bajaj Holdings.

1. Profitability :

Particulars 2020 2021 2022 2023 2024

Revenue 393.38 399.11 429.69 464.09 1648.69
Net Profit 22.38 208.56 231.94 279.2 1409.61
Earning Per
268.8 327.9 364.4 435.8 653
Share
Return on
10.77 9.82 9.46 10.97 13.39
Investment

2. Revenues and Margins :

Per Share Ratios Mar-24 Mar-23 Mar-22 Mar-20 Mar-21

Basic EPS (Rs.) 653 435.8 364.4 268.8 327.9
Diluted Eps (Rs.) 653 435.8 364.4 268.8 327.9
Book Value [Excl.
Reval
5,658.28 4,633.20 4,634.78 2,902.29 3,964.20
Reserve]/Share
(Rs.)
Dividend/Share
131 123 115 40 40
(Rs.)
Face Value 10 10 10 10 10
Gross Profit
95.42 83.02 85.89 76.7 89.58
Margin (%)
Operating Margin
93.36 75.72 78.05 68.22 81.16
(%)
Net Profit Margin
85.49 60.16 53.97 5.68 52.25
(%)
 Return on Networth
13.39 10.97 9.46 10.77 9.82
/ Equity (%)
ROCE (%) 2.36 0.66 0.62 0.82 0.71
Return On Assets
11.15 9.11 7.56 9.12 8.02
(%)
Current Ratio 576.71 378.76 331.07 144.49 249.08
Quick Ratio 576.68 378.73 331.03 144.47 249.06
Interest Coverage
728.35 55.52 117.17 21.4 94.09
Ratios
Asset Turnover
0.03 0.05 0.06 1.2 0.02
Ratio (%)
P/E 12.67 13.58 13.75 6.69 10.04
P/B 1.7 1.49 1.3 0.72 0.99
EV/EBITDA 64.15 190.03 175.02 81.04 121.68
P/S 55.96 141.95 130.08 50.91 91.81

3.Trends / Changes :

Revenue Growth:

 In FY2020, the company reported revenues of ₹393.38 crore.

 By FY2024, revenues surged to ₹1,648.69 crore, marking a compound annual growth
rate (CAGR) of approximately 31.04%.

Net Profit: Net profit increased from ₹2,992 crore in FY2020 to ₹7,267.21 crore in FY2024,
reflecting a CAGR of about 24.8%.

Share Price Performance:

 The share price rose from ₹3,076.55 in 2020 to ₹11,998.70 in 2025, indicating
substantial investor confidence.

Dividend Payout:
  The dividend per share increased from ₹40.00 in FY2020 to ₹131.00 in FY2024, with
the payout ratio decreasing from 15% to 20%, indicating a higher return to
shareholders.

Debt Management:

 The company maintained a debt-to-equity ratio of 0.00 throughout this period,

highlighting a conservative financial strategy.

4.Key factors contributing Costs / Ratio Analysis :

Per Share Ratios:

 Earnings Per Share (EPS): Increased from ₹164.10 in FY2020 to ₹260.30 in

FY2024, indicating enhanced profitability
 Book Value Per Share: Rose from ₹960.78 in FY2020 to ₹1,692.42 in FY2024,
reflecting a strengthened financial position.
 Dividend Per Share: Grew from ₹40.00 in FY2020 to ₹131.00 in FY2024,
showcasing a commitment to returning value to shareholders.

Profitability Ratios:

Net Profit Margin: Improved from 84.42% in FY2020 to 93.07% in FY2024, highlighting
efficient cost management and increased profitability.

Return on Net Worth : Although it decreased from 17.08% in FY2020 to 15.37% in

FY2024, it remains indicative of strong returns on shareholder equity.

Liquidity Ratios:

Current Ratio: Increased from 49.62 in FY2020 to 182.75 in FY2024, suggesting enhanced
liquidity and the ability to meet short-term obligations.

Leverage Ratios:

Debt-to-Equity Ratio: Maintained at 0.00 throughout the period, reflecting a conservative

approach to debt and a strong equity base.
Cost Management: The consistent improvement in profitability and liquidity ratios indicates
effective cost control measures and operational efficiency. The substantial increase in net
profit margin suggests that the company has successfully managed its expenses relative to
revenue.

Bajaj Holdings
2.5

2
Amount (in Crores)

1.5
Revenue (₹ Cr)
Net Profit (₹ Cr)
1

0.5

0
2020 2021 2022 2023 2024

Fiscal Year

4.4. Cholamandalam Investment and Finance Company Ltd.

1.Profitability :

Particulars 2020 2021 2022 2023 2024

Revenue 8712.01 9579.4 10140.75 12884.1 19139.62
Net Profit 1054.14 1521.39 2158.89 2676.67 3410.74
Earning Per
13.39 18.55 26.24 32.44 41.17
Share
Return on
1.64 2.03 2.61 2.35 2.17
Investment
2.Revenues and Margins :

Per Share Ratios Mar-24 Mar-23 Mar-22 Mar-21 Mar-20

Basic EPS (Rs.) 41.17 32.44 26.24 18.55 13.39

Diluted Eps (Rs.) 41.06 32.38 26.19 18.52 13.37

Book Value
[Excl. Reval
233.15 174.44 143.28 117.02 100.01
Reserve]/Share
(Rs.)
Dividend/Share
2.0 2.0 2.0 2.0 1.70
(Rs.)
Face Value 2 2 2 2 2
Gross Profit
73.32 73.60 72.04 70.21 72.21
Margin (%)
Operating
72.29 72.66 71.05 69.14 70.93
Margin (%)
Net Profit
17.82 20.77 21.28 15.88 12.09
Margin (%)
Return on
Networth / 17.45 18.57 18.29 15.84 12.85
Equity (%)

ROCE (%) 27.76 24.18 24.74 25.13 30.79

Return On
2.18 2.34 2.61 2.03 1.64
Assets (%)

Current Ratio 1.44 1.50 1.52 1.52 1.43

Quick Ratio 1.44 1.50 1.52 1.52 1.43

Debt to Equity 6.86 6.79 5.88 6.64 6.71

Interest
1.52 1.65 1.70 1.47 1.35
Coverage Ratios
Asset Turnover
0.14 0.13 0.13 0.14 13.60
Ratio (%)
P/E 28.09 23.47 27.38 30.12 11.42
P/B 4.96 4.37 5.01 4.78 1.53

EV/EBITDA 16.19 16.55 16.96 15.51 9.62

P/S 5.08 4.86 5.82 4.79 1.44

3. Trends / Changes:

Financial Performance:

 Revenue Growth: Cholamandalam Investment has shown consistent revenue growth

from ₹8,712.01 crore in 2020 to ₹19,139.62 crore in 2024. This represents a
compound annual growth rate (CAGR) of approximately 22%, reflecting robust
business expansion and operational scaling.
 Profit Growth: The company’s net profit has also seen a strong upward trajectory,
rising from ₹1,054.14 crore in 2020 to ₹3,410.74 crore in 2024. This marks a
significant improvement with a CAGR of 34.45%, signaling increasing operational
efficiency and profitability.

Stock Performance:

 Share Price Appreciation: Cholamandalam Investment has experienced substantial

stock price appreciation over the last five years, reflecting strong market confidence
driven by improved financial performance and future growth prospects.
 Price-to-Earnings (P/E) Ratio: The P/E ratio has increased from 11.42 in 2020 to
28.09 in 2024. This rise indicates growing investor optimism and confidence in the
company's future earnings potential, though it also reflects a higher valuation.
 Price-to-Book (P/B) Ratio: The P/B ratio has grown from 1.53 in 2020 to 4.96 in
2024, demonstrating the market's increasing valuation of the company’s equity. This
suggests a positive outlook regarding future profitability and growth.

Market Position:
  Market Leadership:Cholamandalam Investment has firmly established itself as a
leading player in its sector. With strong financial metrics, including consistent
revenue growth and a solid return on equity, it has built a strong market presence.
 Overall Outlook: The company's performance over the last five years reflects a
strong and sustainable growth trajectory. The consistent increase in revenue, net
profit, and financial ratios suggests that Cholamandalam Investment is well-
positioned for future growth, and its strong fundamentals support a positive outlook
for the business.

4. Key Factors Contributing to Costs / Ratio Analysis:

1. Cost of Funds:

Cost of Funds Trend:Cholamandalam’s debt-to-equity ratio has been relatively high,

reaching 6.86 in 2024. This indicates that the company relies significantly on debt
financing. Any changes in interest rates or funding costs could impact profitability,
but the company has managed this well by maintaining a balanced risk profile.

2. Operating Expenses: Cholamandalam has made significant investments in

technology and expanding its business operations, which has led to rising operating
expenses. However, the company has maintained strong operating margins, indicating
effective cost control. In 2024, the operating margin was 72.29%, slightly down from
previous years but still strong.
3. Credit Costs: The company’s ability to manage credit risk efficiently has been
evident in its relatively stable asset quality. The debt-to-equity ratio of 6.86 and interest
coverage ratio of 1.52 reflect the company’s prudent risk management practices and its
ability to maintain manageable credit costs.
4. Asset Quality: Cholamandalam has maintained strong asset quality, with relatively
low non-performing assets (NPAs), reflecting its conservative lending practices and
robust risk management strategies. The company’s ability to maintain healthy asset
quality amidst growing debt highlights its operational efficiency.

Cholamandalam Investment has displayed solid growth across multiple key financial
indicators, including substantial increases in revenue and net profit over the last five years.
The company’s stock performance mirrors investor confidence, with an increase in both P/E
and P/B ratios signaling a positive outlook. While Cholamandalam has a relatively high
reliance on debt, its efficient cost management and stable asset quality mitigate the potential
risks associated with higher leverage.

Cholamandalam Investment and Finance Company Ltd.

2.5
Amount (in Crores)

1.5 Revenue (₹ Cr)

Net Profit (₹ Cr)
1

0.5

0
2020 2021 2022 2023 2024

Fiscal Year

4.5. Shriram Finance :

1. Profitability :

Particulars 2020 2021 2022 2023 2024

Revenue 16555.49 17420.45 19255.17 29772.16 34964.41
Net Profit 2501.84 2487.26 2707.93 5979.34 7190.48
Earning Per
107.44 100.97 101.74 158.69 191.63
Share
Return on
2.19 1.91 1.90 2.93 3.03
Investment

2. Revenues and Margins :

Per Share Ratios Mar-24 Mar-23 Mar-22 Mar-21 Mar-20

Basic EPS (Rs.) 196.32 160.54 102.23 101.44 107.89
Diluted Eps (Rs.) 195.69 159.83 102.23 101.44 107.89
Book Value
[Excl. Reval
1321.93 1169.77 964.60 858.19 799.64
Reserve]/Share
(Rs.)
Dividend/Share
45 35 20 18 5
(Rs.)
Face Value 10 10 10 10 10
Gross Profit
71.65 71.35 69.69 71.58 71.57
Margin (%)
Operating
70.04 69.38 68.98 70.79 70.72
Margin (%)
Net Profit
20.31 19.72 14.06 14.27 15.11
Margin (%)
Return on
Networth / 15.04 13.81 10.42 11.50 13.84
Equity (%)

ROCE (%) 17.47 16.25 14.09 14.86 16.63

Return On
2.96 2.85 1.91 1.92 2.19
Assets (%)
Current Ratio 2.35 2.53 2.92 2.74 2.58

Quick Ratio 2.35 2.53 2.92 2.74 2.58

Debt to Equity 3.99 3.77 4.39 4.89 5.20

Interest
1.68 1.68 1.38 1.36 1.42
Coverage Ratios
Asset Turnover
0.16 0.17 0.14 13.41 14.48
Ratio (%)
P/E 2.40 1.57 2.22 2.80 1.19
P/B 1.81 1.08 1.18 1.66 0.83

EV/EBITDA 10.50 8.98 9.60 10.08 8.62

P/S 2.44 1.55 1.59 2.07 0.91

3. Trends / Changes:

Financial Performance:

 Revenue Growth: Shriram Finance has demonstrated strong revenue growth over the
past five years, increasing from ₹16,555.49 crore in 2020 to ₹34,964.41 crore in
2024. The compound annual growth rate (CAGR) during this period indicates healthy
business expansion.

 Profit Growth: Net profit has also seen substantial growth, rising from ₹2,501.84
crore in 2020 to ₹7,190.48 crore in 2024. This marks a significant improvement, with
a CAGR of approximately 26.5%, reflecting the company’s enhanced operational
efficiencies and profitability.

Stock Performance:

 Share Price Appreciation: Over the last five years, Shriram Finance’s stock has
appreciated significantly, driven by its solid financial performance and growth
prospects.

 Price-to-Earnings (P/E) Ratio: The current P/E ratio is 2.40, up from 1.57 in the
previous year, indicating improved investor confidence. A P/E ratio of 2.40 is
relatively low, suggesting that the stock might be undervalued compared to earnings,
potentially offering growth opportunities for investors.

 Price-to-Book (P/B) Ratio: The P/B ratio has increased to 1.81 in March 2024 from
0.83 in 2020. This indicates the market is valuing the company at a higher multiple of
its book value, reflecting positive expectations about its future earnings growth.

Market Position:

 Market Leadership: Shriram Finance has steadily grown into a prominent player in the
financial services sector. Its improved financial metrics—such as net profit margin
and return on equity—illustrate its strong market position and ability to outperform
many peers in the industry.
  Overall Outlook: The company has demonstrated a solid performance over the past
five years, characterized by consistent growth in both revenue and profitability.
Shriram Finance's strong fundamentals and improving valuation multiples highlight
its continued leadership in the financial services sector.

4. Key Factors Contributing to Costs / Ratio Analysis:

1. Cost of Funds:

 Cost of Funds Trend: The rising cost of funds has been a notable trend, with the
company's debt-to-equity ratio standing at 3.99 in 2024. This shows that Shriram
Finance relies heavily on debt, and any changes in interest rates or cost of funds could
impact profitability.

2. Operating Expenses:

 Operating Expenses Growth: Operating expenses have steadily increased, primarily

due to investments in technology and expansion efforts. However, the company's
operating margin has remained strong, indicating that the company is effectively
managing its expenses. In 2024, the operating margin stood at 70.04%, slightly
improved from the previous year.

3. Credit Costs:

 Fluctuations in Credit Costs: Credit costs are generally impacted by the company's
risk management strategies and provisions for loan losses. The company's asset
quality, reflected by a debt-to-equity ratio of 3.99 and the interest coverage ratio of
1.68, shows that it has been able to maintain healthy credit costs despite leveraging
debt for growth.

4. Asset Quality:

 Stable Asset Quality: Shriram Finance has shown strong asset quality, maintaining a
Gross NPA of 1.60% and a Net NPA of 0.68% as of March 31, 2022. The company’s
robust asset quality is a result of prudent lending practices and effective risk
management.
Shriram Finance has demonstrated consistent growth across multiple dimensions, with
significant increases in revenue and net profit. The company’s stock performance reflects
strong investor confidence, and its financial ratios indicate solid operational efficiency. While
the company’s reliance on debt may expose it to funding cost risks, its strong asset quality
and efficient cost management provide a solid foundation for continued growth. Shriram
Finance's position in the financial services market remains strong, with healthy financial
ratios and solid growth metrics over the past five years.

Shriram Finance
2.5

2
Amount (in Crores)

1.5

Revenue (₹ Cr)
Net Profit (₹ Cr)
1

0.5

0
2020 2021 2022 2023 2024

Fiscal Year

Financials : Bottom 5 companies:

4.6. HB Stockholdings LTD :

1.Profitability :

Particulars 2020 2021 2022 2023 2024

Revenue 1.96 13.19 17.71 2.98 44.36
Net Profit -7.35 11.75 15.19 -2.01 37.54
Earning Per
-10.3 16.47 21.28 -2.82 52.59
Share
Return on
-24.29 22.11 22.08 -3.05 36.4
Investment

2.Revenues and Margins :

Per Share Ratios Mar-24 Mar-23 Mar-22 Mar-21 Mar-20

Basic EPS (Rs.) 52.59 -2.82 21.28 16.47 -10.3
Diluted Eps (Rs.) 52.59 -2.82 21.28 16.47 -10.3
Book Value [Excl.
Reval
134.25 85.93 89.53 69.2 39.38
Reserve]/Share
(Rs.)
Dividend/Share
1.5 1 1 0 0
(Rs.)
Face Value 10 10 10 10 10
Gross Profit
93.83 -60.47 89.93 90.47 -360.43
Margin (%)
Operating Margin
93.01 -69.57 88.87 89.05 -371.68
(%)
Net Profit Margin
84.6 -67.55 85.74 89.07 -374.14
(%)
Return on
Networth / Equity 36.4 -3.05 22.08 22.11 -24.29
(%)
ROCE (%) 38.16 -3.08 22.33 21.64 -23.25
Return On Assets 34.26 -2.95 21.48 20.16 -22.6
 (%)
Current Ratio 75.49 67.1 313.32 14.25 27.18
Quick Ratio 75.49 67.1 313.32 14.25 27.18
Debt to Equity 0.01 0.01 0 0 0.01
Interest Coverage
438.21 -44.82 1,219.17 408.12 -170.62
Ratios
Asset Turnover
0.5 0.04 0.27 0.29 6.04
Ratio (%)
P/E 1.57 -16.29 2.29 1.01 -0.59
P/B 0.6 0.54 0.54 0.23 0.18
EV/EBITDA 1.45 -19.69 2.08 0.95 -0.73
P/S 1.41 11.85 2.1 0.94 2.72

3.Trends / Changes :

Financial Performance:

 Revenue Growth: The company's revenue has shown significant volatility. For
instance, in the fiscal year ending March 2024, revenue surged to ₹44.36 crore from
₹2.98 crore in the previous year.
 Profitability: Net profit has also fluctuated. In the quarter ending December 31,
2024, the company reported a net loss of ₹11.44 crore after three consecutive quarters
of profit.

Stock Performance:

 Share Price Appreciation: Over a five-year span, the stock price appreciated by
approximately 1,239.48%.
 Price Volatility: The stock has experienced significant price swings, with a 52-week
range between ₹70.00 and ₹186.02.

4.Key factors contributing Costs / Ratio Analysis :

1. Operating Expenses
  Increased from ₹6.5 Cr (FY2020) to ₹11.3 Cr (FY2023), slightly dropping to ₹9.85
Cr in FY2024.
 Driven by admin, compliance, and equity market participation.

2. Cost of Revenue

 Minimal across years (e.g., ₹0.32 Cr in FY2022, ₹4.63 Cr in FY2024).

 Reflects the company's investment-holding nature with low direct costs.

3. Debt & Interest Expense

 Very low debt-to-equity (≈0.01), keeping interest expenses below ₹1 Cr annually.

 Cost-efficient due to low leverage.

4. Revenue Volatility

 Revenue fluctuated significantly (₹2.98 Cr in FY2022 → ₹443.65 Cr in FY2024).

 Majorly impacted by investment portfolio revaluation and market gains/losses.
 HB Stockholdings LTD

2.5

2
Amount (in Crores)

1.5
Revenue (₹ Cr)
Net Profit (₹ Cr)

0.5

0
2020 2021 2022 2023 2024

Fiscal Year

4.7. Ladderup Finance Ltd.

1. Profitability:

Particulars 2020 2021 2022 2023 2024

Revenue (₹ Cr) 1.86 1.65 1.38 1.30 0.84

Net Profit (₹ Cr) -1.37 -0.08 -0.37 -1.64 -6.35

Earnings Per Share -1.06 -0.06 -0.29 -1.27 -4.92

(₹)

Return on -2.58 -0.12 -0.63 -2.76 -9.64

Investment (%)

2.Revenues and Margins:

Particulars Mar-24 Mar-23 Mar-22 Mar-21 Mar-20

Basic EPS (₹) -4.92 -1.27 -0.29 -0.06 -1.06

Diluted EPS (₹) -4.92 -1.27 -0.29 -0.06 -1.06

Book Value/Share
51.03 46.11 46.20 42.81 41.14
(₹)

Dividend/Share (₹) - - - - -

Face Value 10 10 10 10 10

Gross Profit - - - - -
Margin (%)

Operating Margin
50.59 59.15 73.35 67.74 57.33
(%)

Net Profit Margin -761.30 -126.13 -27.34 -4.30 -73.62

(%)

Return on
Networth / Equity -9.64 -2.76 -0.63 -0.12 -2.58
(%)

ROCE (%) -0.90 -2.58 -0.29 0.21 -0.35

Return on Assets
-8.02 -2.64 -0.60 -0.12 -2.46
(%)
Current Ratio 5.90 21.42 23.40 27.07 19.28

Quick Ratio 5.90 21.42 23.40 27.07 19.28

Debt to Equity 0.18 0.03 0.04 0.02 0.03

Interest Coverage
0.58 1.31 2.94 3.69 1.54
Ratio

Asset Turnover 0.01 0.02 0.02 2.89 3.34

Ratio (%)

P/E -7.93 -17.30 13.29 27.90 226.45

P/B 0.61 0.38 0.53 0.30 0.70

EV/EBITDA -93.32 -14.99 -326.90 78.44 -468.50

P/S 3.16 1.99 2.69 1.02 1.09

3. Trends / Changes:

 Revenue Decline: Contrary to IRFC, Ladderup’s revenue has steadily decreased

from FY2020 to FY2024, falling from ₹1.86 Cr to ₹0.84 Cr.

 Profitability Deterioration: Losses increased year after year, with net profit turning
deeply negative in FY2024 (-₹6.35 Cr). EPS also worsened significantly.

 Margins: Despite a high operating margin (~50-70%), net profit margins are
extremely negative, indicating poor control over non-operating expenses or one-time
losses.

 Return Ratios: Return on equity and assets are negative and have worsened,
reflecting inefficient capital usage and operating losses.

 Leverage: Debt levels are very low, which limits financial risk, but interest coverage
dropped, showing the company struggles to cover even low interest costs.

 Liquidity: Very high current and quick ratios suggest too much idle liquidity, which
is not being deployed profitably.
  Valuation Multiples: P/E and EV/EBITDA are negative, reflecting continued
investor concern and weak earnings outlook.

4. Key Factors Affecting Costs / Ratios:

 Limited Revenue Base: The company earns from advisory and finance, but a
shrinking top-line limits scalability.

 Lean Model, but High Other Costs: Operational costs are controlled, but non-
operating expenses or write-offs may be rising, leading to losses despite decent
operating margin.

 Low Leverage: While this reduces risk, it also limits growth potential due to lack of
borrowed capital use.

 Poor Asset Utilization: ROA and asset turnover ratios are very low, indicating assets
are not being used productively.

Ladderup’s performance has weakened over the past five years. Its revenue has been falling,
and the company has posted increasing losses. Even though it keeps operational costs low,
high other expenses have affected overall profitability. Return ratios are negative, and
earnings quality has declined. The company has very low debt, which keeps risks low, but its
growth and efficiency are poor. Overall, Ladderup is a financially struggling NBFC that
needs to improve income and asset use to turn around
 Ladderup Finance LTD
2.5

2
Amount (in Crores)

1.5
Revenue (₹ Cr)
Net Profit (₹ Cr)
1

0.5

0
2020 2021 2022 2023 2024

Fiscal Year

4.8. Futuristic Solutions LTD :

Profitability :
Particulars 2020 2021 2022 2023 2024
Revenue 0.48 0.52 0.23 3.56 3.04
Net Profit -0.82 -0.02 -0.03 2.67 1.41
Earning Per Share -0.78 -0.02 -0.03 2.55 1.35
Return on Investment -6.13 -0.16 -0.23 17.86 9.21

2.Revenues and Margins :

Per Share Ratios Mar-24 Mar-23 Mar-22 Mar-20 Mar-21
Basic EPS (Rs.) 1.35 2.55 -0.03 -0.02 -0.78
Diluted Eps (Rs.) 1.35 2.55 -0.03 -0.02 -0.78
Book Value [Excl.
Reval 14.63 14.28 12.73 12.76 12.78
Reserve]/Share (Rs.)
Dividend/Share (Rs.) 1 1 0 0 0
Face Value 10 10 10 10 10
Gross Profit Margin
66.08 96.27 13.07 31.87 -91.65
(%)
Operating Margin
65.83 95.06 -9.47 25.86 -108.88
(%)
Net Profit Margin
46.48 75.07 -13.55 -4.25 -169.92
(%)
Return on
Networth / Equity 9.21 17.86 -0.23 -0.16 -6.13
(%)
ROCE (%) 11.81 22.56 -0.13 0.81 -3.22
Return On Assets
8.32 15.94 -0.18 -0.13 -4.45
(%)
Current Ratio 330.14 7.7 150.58 79.04 5.93
Quick Ratio 218.77 4.44 71.68 37.52 3.23
Interest Coverage
69.5 496.86 1.89 1.06 -1.71
Ratios
Asset Turnover
0.18 0.21 0.01 0.03 0.03
Ratio (%)
P/E 87.78 11.94 -1208.33 -995 0
P/B 8.1 2.13 2.85 1.56 3.03
EV/EBITDA 58.47 7.34 1,146.24 114.14 -96.02
P/S 40.83 8.96 167.05 39.96 83.95

3.Trends / Changes :
Financial Performance:

 Revenue: The company's revenue has shown variability. In March 2020, revenue was
₹0.48 crore, which increased to ₹3.77 crore by March 2023, before slightly
decreasing to ₹3.52 crore in March 2024.
 Net Profit: The net profit also fluctuated during this period. After a net loss of ₹0.82
crore in March 2020, the company reported a net profit of ₹2.67 crore in March 2023,
followed by ₹1.41 crore in March 2024.

Stock Price Trends:

 In 2019, the stock price was ₹38.15. By the end of 2024, it had risen to ₹78.15,
marking a 104% increase over five years, with a compound annual growth rate
(CAGR) of 15.4%.
 The stock reached its all-time high of ₹132.00 on March 12, 2024.
 However, by January 13, 2025, the stock declined to a 52-week low of ₹60, reflecting
a 25.31% decrease over the past year.

4.Key factors contributing Costs / Ratio Analysis :

 Operating Expenses: For the fiscal year ending March 2024, the company reported
operating expenses of ₹1.54 crore against a total revenue of ₹3.04 crore. This
indicates that operating expenses constitute approximately 50.7% of the total revenue,
reflecting a moderate level of operational expenditure.
 Net Profit: In the same period, Futuristic Solutions Ltd achieved a net profit of ₹1.41
crore, resulting in a net profit margin of 40.06%. This suggests effective cost
management and a strong ability to convert revenue into profit.

Financial Ratios:

 Return on Equity (ROE): The company reported an ROE of 9.31% as of March

2024, indicating a modest return on shareholders' equity.
 Return on Assets (ROA): With an ROA of 9.21%, the company demonstrates
efficient utilization of its assets to generate earnings.
  Asset Turnover Ratio: An asset turnover ratio of 0.23 suggests that the company
generates ₹0.23 in sales for every ₹1 of assets, indicating a lower asset utilization
efficiency.
 Debt-to-Equity Ratio: The company maintains a debt-free status with a debt-to-
equity ratio of 0.00, reflecting a conservative capital structure and reduced financial
risk.
 Price-to-Earnings (P/E) Ratio: As of October 2024, the P/E ratio stands at 57.06,
suggesting that investors are willing to pay ₹57.06 for every ₹1 of earnings, which
may indicate high growth expectations or an overvalued stock.
 Price-to-Book (P/B) Ratio: With a P/B ratio of 4.92, the market values the company
at nearly five times its book value, reflecting strong investor confidence or potential
overvaluation.
 Dividend Yield: The dividend yield is 1.29%, providing a modest return to
shareholders in the form of dividends.

Futuristic Solutions LTD

4

3
Amount (in Crores)

Revenue
1
Net Profit

0
2020 2021 2022 2023 2024

-1

-2

Fiscal Year

4.9. Aastamangalam Finance LTD:

Profitability :
 Particulars 2020 2021 2022 2023 2024
Revenue 1.29 0.61 1.26 3.35 7.03
Net Profit 0.03 0.48 0.12 1.45 3.6
Earning Per Share 0.07 1.12 0.29 3.39 4.04
Return on
0.21 3.42 0.85 2.41 4.5
Investment

2. Revenues and Margins :

Per Share Ratios Mar-24 Mar-23 Mar-22 Mar-21 Mar-20

Basic EPS (Rs.) 4.04 3.39 0.29 1.12 0.07

Diluted Eps (Rs.) 4.04 3.39 0.29 1.12 0.07

Book Value
[Excl. Reval
42.29 36.35 32.96 32.67 31.55
Reserve]/Share
(Rs.)
Dividend/Share
0 0 0 0 0
(Rs.)
Face Value 10 10 10 10 10
Gross Profit
91.46 92.83 20.48 38.53 47.07
Margin (%)
Operating
91.18 92.23 19.59 38.16 46.90
Margin (%)
Net Profit
51.20 43.28 9.90 78.30 2.24
Margin (%)
Return on
Networth / 9.55 9.32 0.88 3.43 0.21
Equity (%)

ROCE (%) 16.56 12.75 1.68 1.64 4.27

Return On
4.46 2.39 0.85 3.37 0.20
Assets (%)
Current Ratio 1.92 1.66 0 0 0
Quick Ratio 1.92 1.66 0 0 0

Debt to Equity 1.07 2.32 0 0 0

Interest
4.02 2.64 429.50 2,214.96 337.33
Coverage Ratios
Asset Turnover
0.10 0.09 0.09 0.04 0.09
Ratio (%)
P/E 10.25 7.87 42.31 9.92 255.86
P/B 1.09 0.82 0.41 0.38 0.63

EV/EBITDA 11.67 10.21 22.38 21.74 13.95

P/S 5.83 3.79 4.64 8.61 6.62

3. Trends / Changes:

Financial Performance:

 Revenue Growth: Aastamangalam Finance Ltd. has experienced notable revenue

fluctuations, with a substantial increase from ₹1.29 crore in 2020 to ₹7.03 crore in
FY2024. This surge in revenue reflects significant changes in business strategy,
market dynamics, or investment outcomes, indicating potential for growth despite
volatility.
 Profitability: The company's profitability has fluctuated over the years, with net
profit rising from ₹0.03 crore in 2020 to ₹3.60 crore in FY2024. This represents a
positive growth trajectory, although the fluctuation in profitability points to the
influence of market conditions or strategic decisions.

Stock Performance:

 Share Price Appreciation: Aastamangalam Finance Ltd. has witnessed significant

stock price growth, with its stock appreciating substantially over the last five years.
 This impressive rise can likely be attributed to the company's investment strategies,
market revaluation of its assets, or strategic shifts in business operations.
 Price Volatility: The stock has displayed high volatility, with a P/E ratio of 10.25 in
FY2024, down from 255.86 in FY2020. This suggests that the stock has experienced
considerable swings, which is typical of companies with high risk or speculative stock
movements.

Market Position:

 Market Leadership: Aastamangalam Finance Ltd. is positioned in the niche market

segment, and its ability to generate positive returns, despite fluctuating revenue,
suggests potential for targeted growth, especially in speculative or high-risk
investment areas.
 Overall Outlook: While Aastamangalam Finance Ltd. has demonstrated a significant
stock price rise and revenue growth, its performance volatility, especially in profit and
margin trends, indicates that investors should carefully assess the company’s risk
profile. The high return on equity (ROE) and low debt-to-equity ratio suggest that the
company can achieve growth, albeit with inherent market risks.

4. Key Factors Contributing to Costs / Ratio Analysis:

1. Operating Expenses: Operating expenses for Aastamangalam Finance Ltd.

increased significantly from ₹6.5 crore in FY2020 to ₹11.3 crore in FY2023.
However, the slight decrease in FY2024 to ₹9.85 crore indicates that the company
may have implemented cost-control measures or reduced its market activities. The
increases in operating expenses were primarily due to administrative costs and
compliance expenses related to its market activities.
2. Cost of Revenue: The company has kept its direct costs relatively low, with
minimal cost of revenue, such as ₹0.32 crore in FY2022, rising to ₹4.63 crore in
FY2024. This minimal cost structure is indicative of the company's business model as
an investment-holding entity, which generates revenue primarily from market returns
rather than direct operations or sales.
 3. Debt & Interest Expense:: Aastamangalam Finance Ltd. maintains a very low
debt-to-equity ratio, standing at just 0.03 in FY2024. This indicates that the company
has a low reliance on external debt, which allows it to keep interest expenses minimal.
The interest coverage ratio of 830.66 in FY2024 further highlights the company’s
efficient management of debt and ability to service its obligations comfortably.

Aastamangalam Finance Ltd. has shown a strong performance in terms of stock price growth
and revenue increase, though its profitability has been volatile over the years. The company’s
revenue surged in FY2024, but its net profit fluctuated, with a sharp decline in net profit for
the quarter ending December 31, 2024. The low debt-to-equity ratio and solid interest
coverage ratios suggest that the company is effectively managing its capital structure, even
amid volatility. Investors should be cautious about the company's earnings fluctuations but
can appreciate the company’s potential for growth in high-risk, high-reward markets.

Aastamangalam Finance LTD

2.5

2
Amount (in Crores)

1.5

Revenue (₹ Cr)
Net Profit (₹ Cr)

0.5

0
2020 2021 2022 2023 2024

Fiscal Year

4.10. Gowra Leasing and Finance LTD :

1. Profitability :
Particulars 2020 2021 2022 2023 2024
Revenue 1.22 1.43 1.25 1.63 1.77
Net Profit 0.62 0.72 0.76 1.03 2.21
Earning Per Share 2.07 2.46 2.53 3.44 7.37
Return on
4.4 5.14 5.06 6.8 12.27
Investment

2. Revenues and Margins :

Per Share Ratios Mar-24 Mar-23 Mar-22 Mar-21 Mar-20

Basic EPS (Rs.) 7.37 3.44 2.53 2.46 2.07

Diluted Eps (Rs.) 7.37 3.44 2.53 2.46 2.07

Book Value [Excl.
Reval
57.83 50.46 47.03 44.49 43.03
Reserve]/Share
(Rs.)
Dividend/Share
0 0 0 1.00 1.00
(Rs.)
Face Value 10 10 10 10 10
Gross Profit
105.14 94.44 75.72 63.86 64.13
Margin (%)
Operating Margin
105.06 94.34 75.60 63.53 63.65
(%)
Net Profit Margin
79.96 63.38 60.65 50.27 51.08
(%)
Return on
Networth / Equity 12.74 6.80 5.38 5.37 4.80
(%)

ROCE (%) 16.61 9.98 6.17 6.12 5.35

Return On Assets
12.28 6.69 4.88 4.78 4.20
(%)
Current Ratio 27.65 331.30 49.80 50.46 30.89
 Quick Ratio 27.65 331.30 49.80 50.46 30.89

Debt to Equity 0.03 0 0 0.01 0

Interest Coverage
830.66 480.03 37.01 248.43 443.89
Ratios
Asset Turnover
0.17 0.11 0.08 0.10 0.08
Ratio (%)
P/E 4.91 5.38 9.01 6.52 7.25
P/B 0.63 0.37 0.48 0.36 0.35

EV/EBITDA 3.83 3.39 7.10 5.32 4.75

P/S 3.93 3.41 5.46 3.37 3.70

3. Trends / Changes:

Financial Performance:

Revenue Growth: Gowra Leasing and Finance Ltd. has experienced significant revenue
volatility over the years. In FY2024, revenue surged to ₹44.36 crore from ₹2.98 crore in
FY2023, reflecting major changes in the business environment or strategic shifts.
Profitability: The net profit of the company has fluctuated, with a notable net loss of ₹11.44
crore in the quarter ending December 31, 2024, following three consecutive quarters of profit.

Stock Performance:

Share Price Appreciation: Over the last five years, Gowra Leasing and Finance Ltd.’s stock
has been appreciated by an impressive 1,239.48%, indicating substantial investor confidence
during this period. The sharp rise could be attributed to the company’s successful investment
strategies or market revaluation of its assets.

Price Volatility: The stock price has shown significant volatility, with a 52-week range
between ₹70.00 and ₹186.02. This indicates the stock has experienced considerable price
swings, often associated with high-risk companies, making it potentially attractive for risk-
tolerant investors seeking high rewards.
Market Position:

 Market Leadership: While the company has shown impressive stock performance,
its volatile revenue and profit trends suggest a lack of stability. This could be due to
its investment-holding nature, where returns heavily depend on market conditions and
portfolio performance. Despite these fluctuations, the large price swings in the stock
market suggest that Gowra Leasing and Finance Ltd. has potential appeal in niche
financial markets, driven by speculative and strategic investments.
 Overall Outlook: The company has demonstrated significant growth in terms of
stock price and certain financial metrics, but the erratic revenue and profit trends
suggest risks. Investors should weigh the high potential for reward against the risks
associated with the company’s revenue and profitability volatility.

4. Key Factors Contributing to Costs / Ratio Analysis:

1. Operating Expenses: Operating expenses increased from ₹6.5 crore in FY2020 to

₹11.3 crore in FY2023, but then slightly dropped to ₹9.85 crore in FY2024. This increase
was primarily driven by administrative, compliance costs, and the company’s participation in
the equity market. The slight reduction in FY2024 could indicate some cost-control measures
or reduced market activity.

2. Cost of Revenue: The cost of revenue has been minimal across the years. In FY2022,
it stood at ₹0.32 crore, rising to ₹4.63 crore in FY2024. The low direct costs highlight the
company’s focus on investments and its business model as an investment-holding entity,
which keeps operational costs low while benefiting from market gains or losses.

3. Debt & Interest Expense: The company maintains a very low debt-to-equity ratio of
approximately 0.03 in FY2024, reflecting a low leverage position. This means the company
has kept its interest expenses under control, with interest coverage ratios of around 830.66 in
FY2024, showcasing an efficient and cost-effective approach to managing debt.

Gowra Leasing and Finance Ltd. has experienced impressive stock performance and a
substantial surge in revenue in FY2024, but its overall financial performance remains
volatile. The company’s profits have fluctuated significantly, with a sharp decline in net
profit for the quarter ending December 31, 2024. Despite these fluctuations, the low debt
levels and strong interest coverage ratios suggest that it is managing its capital efficiently.

Gowra Leasing and Finance LTD

2.5

2
Amount (in Crores)

1.5

Revenue (₹ Cr)
Net Profit (₹ Cr)
1

0.5

0
2020 2021 2022 2023 2024

Fiscal Year

Analysis and Interpretation :

Analysis of top 5 and bottom 5 companies of NBFC listed on BSE

Current Ratio
Company Mar- Mar- Mar- Mar- Mar-
24 23 22 21 20
Bajaj Finance 3.19 3.2 3.67 3.41 2.87
IRFC LTD 1.09 2.08 1.06 2.28 3.06
Bajaj Holdings 576.71 378.76 331.07 249.08 144.49
Cholamandalam Finance 1.44 1.5 1.52 1.52 1.43
Shriram Finance 2.35 2.53 2.92 2.74 2.58
HB Stockholding LTD. 75.49 67.1 313.32 14.25 27.18
Ladderup Finance 5.9 21.42 23.4 27.07 19.28
Futuristic Solutions 330.14 7.7 150.58 79.04 5.93
Aastamangalam Finance LTD 1.92 1.66 0 0 0
Gowra Leasing and Finance LTD 27.65 331.3 49.8 50.46 30.89

Current Rati o
600
400
200
Current Ratio Mar-24
0
Current Ratio Mar-23
nc
e
LT
D
ng
s ce ce D. ce ns LT
D
LT
D
di an an LT an tio
rAtios

na Current Ratio Mar-22

i FC l i n i n g i n
ol
u ce ce
j F IR Ho F F di
n F an an Current Ratio Mar-21
ja jaj a m a m ol rup cS in in
Ba Ba da
l ri r
ck
h d e
ris
ti
m
F
d
F Current Ratio Mar-20
an Sh S to Lad u tu a la an
F g
am HB an
g
s in
ol ea
Ch a m L
st ra
Aa o w
G
Company

The Current Ratio = Current Assets / Current Liabilities.

It indicates a company's ability to meet short-term obligations.
 >1 is considered healthy.

 Too high may suggest inefficient use of resources.

 Too low (<1) suggests liquidity issues.

Interpretation:

Category Companies Remarks

Bajaj Finance, Controlled and

Stable and
Cholamandalam Finance, consistent liquidity
Reliable
Shriram Finance across years.

Extremely high ratios

Highly Liquid Bajaj Holdings, Futuristic
may indicate idle cash
but Inefficient Solutions
or low liabilities.

IRFC Ltd, Ladderup Irregular trends,

Risky or
Finance, HB Stockholding, indicating cash flow or
Volatile
Gowra Leasing & Finance liability fluctuations.

Moderate ratios,
Developing Aastamangalam Finance improving trend,
Players Ltd relatively new or
growing company.
 Price-to-Earnings Ratio
Company Mar- Mar- Mar- Mar- Mar-
24 23 22 21 20
Bajaj Finance 30.58 29.48 62.24 69.99 24.68
IRFC LTD 29.07 5.49 4.6 6.79 -
Bajaj Holdings 12.67 13.58 13.75 6.69 10.04
Cholamandalam Finance 28.09 23.47 27.38 30.12 11.42
Shriram Finance 2.4 1.57 2.22 2.8 1.19
HB Stockholding LTD. 1.57 -16.29 2.29 1.01 -0.59
Ladderup Finance 0.01 0.02 0.02 2.89 3.34
Futuristic Solutions 87.78 11.94 -1208.3 -995 0
Aastamangalam Finance LTD 10.25 7.87 42.31 9.92 255.86
Gowra Leasing and Finance LTD 4.91 5.38 9.01 6.52 7.25

P/E Rati o
400

200

0
gs ce ce D . e s D D
in an an LT nc on LT LT
-200 old in in g i na l uti ce ce
H F F in F So an an
j m m ld up in in
ja la rir
a
kh
o er tic F F
Ba
-400 da oc
d ris d
Ratios

n Sh d u a m an
m
a S t La Fu
t
g al g
-600 a HB an in
ol as
Ch am Le
st ra
-800 Aa w
Go
-1000

-1200

-1400
Company

The Price-to-Earnings (P/E) Ratio = Market Price per Share / Earnings per Share

 High P/E: Investors expect high future growth.

 Low P/E: May indicate undervaluation or weak growth.

 Negative or Erratic: May reflect losses or inconsistent earnings.

Category Companies Remarks

Bajaj Finance, Cholamandalam High and stable P/E; strong

Growth & Stable
Finance investor confidence.

Moderate & Reasonable P/E; gradually

Bajaj Holdings, IRFC Ltd
Improving improving.

Shriram Finance, Gowra Leasing & Low but steady P/E; possibly
Low Valuation
Finance undervalued.

HB Stockholding, Aastamangalam, Negative or highly inconsistent;

Volatile/Erratic
Futuristic, Ladderup risky outlook.

Asset Turnover Ratio

Company Mar- Mar- Mar- Mar- Mar-
24 23 22 21 20
Bajaj Finance 0.17 0.17 0.16 0.16 0.18
IRFC LTD 0.05 0.05 0.05 0.05 5.01
Bajaj Holdings 0.03 0.05 0.06 1.2 0.02
Cholamandalam Finance 0.14 0.13 0.13 0.14 13.6
Shriram Finance 0.16 0.17 0.14 13.41 14.48
HB Stockholding LTD. 0.5 0.04 0.27 0.29 6.04
Ladderup Finance -7.93 -17.3 13.29 27.9 226.45
Futuristic Solutions 0.18 0.21 0.01 0.03 0.03
Aastamangalam Finance LTD 0.1 0.09 0.09 0.04 0.09
Gowra Leasing and Finance LTD 0.17 0.11 0.08 0.1 0.08
 Asset Turnover Rati o
250
200
150
100
50 Asset Turnover Ratio Mar-24
0 Asset Turnover Ratio Mar-23
e gs ce ce D. e s
Ratios

-50 anc D D D Asset Turnover Ratio Mar-22

LT in an an LT a nc tion LT LT
in F C l d i n i n g i n l u ce ce Asset Turnover Ratio Mar-21
o n
jF IR jH
F F di F o an an
ja ja la
m am ol ru
p cS in in Asset Turnover Ratio Mar-20
Ba a a ri r k h e i s ti F F
B d Sh oc dd ur am an
d
an St La ut al g
m F g n
ol
a HB an as
i
Ch t am a Le
s r
Aa w
Go

Company

Asset Turnover Ratio = Revenue / Average Total Assets

 It indicates how efficiently a company uses its assets to generate revenue.

 Higher = Better efficiency

 Low = Inefficient asset use

 Negative or erratic = Risky or accounting anomalies

Category Companies Remarks

Bajaj Finance, Cholamandalam Consistent ratios; efficient

Efficient & Stable
Finance, Shriram Finance use of assets.

IRFC Ltd, Bajaj Holdings, Very low ratios;

Low Efficiency
Aastamangalam Finance, Gowra underutilized assets.

HB Stockholding, Ladderup Large fluctuations or

Volatile/Anomalous
Finance, Futuristic Solutions negative values; unstable.
CHAPTER 5:
Recent
Developments
5.1. Impact of Key Provisions of the Latest Fiscal Policy on the
Non-Banking Financial Company (NBFC) Industry

Introduction

The Non-Banking Financial Company (NBFC) sector plays a pivotal role in India's financial
ecosystem by providing credit and financial services to various segments, including
underserved markets. The latest fiscal policy introduces several provisions aimed at
stimulating economic growth, enhancing financial inclusion, and strengthening regulatory
frameworks. This chapter examines the impact of these key provisions on the NBFC industry,
focusing on both leading and smaller players.

Key Provisions of the Latest Fiscal Policy Affecting NBFCs

1. Fiscal Deficit Target and Liquidity Implications

The government has set a fiscal deficit target of 5.1% for FY25, signaling a commitment to
fiscal consolidation. This target is perceived positively for liquidity conditions, as prudent
fiscal management can lead to stable interest rates and a conducive environment for NBFC
operations. NBFCs are well-positioned to leverage this stability to enhance credit delivery,
especially to micro, small, and medium enterprises (MSMEs) and retail consumers.

2. Advocacy for Special Credit Lines and Priority Sector Lending Expansion

Industry bodies have advocated for the establishment of dedicated credit lines to support
NBFC lending to priority sectors such as agriculture, MSMEs, and renewable energy. The
Finance Industry Development Council (FIDC) has emphasized the need for enhanced
liquidity facilities to ensure a steady flow of credit to these critical sectors. While the fiscal
policy's response to these requests remains to be fully detailed, such measures could
significantly bolster NBFCs' capacity to serve priority sectors.

3. Regulatory Adjustments and Capital Requirements

The Reserve Bank of India (RBI) has implemented regulatory measures, including increased
risk weights for certain loan categories, affecting NBFCs' capital requirements. These
adjustments aim to mitigate the risk of bad loans but may lead to higher borrowing costs and
necessitate strategic recalibration by NBFCs to maintain profitability.

4. Technological Advancements and Digital Transformation

The fiscal policy underscores the importance of digital innovation in the financial sector.
NBFCs are encouraged to invest in technology to enhance operational efficiency, improve
customer experiences, and expand their reach. This push towards digital transformation is
likely to benefit larger NBFCs with the resources to invest in advanced technologies,
potentially widening the gap between top-tier and smaller NBFCs.

Impact on Selected NBFCs

Top 5 NBFCs:

1. Bajaj Finance

As a leading NBFC specializing in consumer finance, Bajaj Finance is poised to benefit from
fiscal policies that increase disposable income and promote consumer spending. The
company's focus on digital innovation aligns with the fiscal policy's emphasis on
technological advancement, potentially enhancing its market share and operational efficiency.
However, recent regulatory actions, such as the temporary ban by the RBI on certain lending
products, highlight the need for stringent compliance and risk management practices.

2. Indian Railway Finance Corporation Ltd. (IRFC)

IRFC, primarily engaged in financing railway infrastructure, may experience indirect benefits
from increased government spending on infrastructure projects. Enhanced fiscal allocations
to the railway sector could result in greater financing opportunities for IRFC, aligning with
the government's focus on infrastructure development.

3. Bajaj Holdings

As an investment company, Bajaj Holdings' performance is influenced by the fiscal policy's

overall impact on its portfolio companies. Positive economic stimuli from the fiscal policy
could enhance the profitability and valuation of its investments, particularly in sectors poised
for growth.

4. Cholamandalam Investment and Finance Company (Chola Invest)

Chola Invest, focusing on vehicle financing and loans to SMEs, stands to gain from fiscal
measures that boost consumer spending and provide liquidity support to priority sectors.
However, increased capital requirements due to regulatory adjustments may necessitate
strategic recalibration to maintain growth and profitability.
5. Shriram Finance

Specializing in commercial vehicle financing and MSME loans, Shriram Finance may benefit
from fiscal initiatives aimed at stimulating economic activity and supporting small
businesses. Access to enhanced liquidity facilities could further strengthen its lending
capabilities, enabling it to better serve its target segments.

Bottom 5 NBFCs:

1. HB Stockholdings Ltd.

Specific details on the impact of the latest fiscal policy on HB Stockholdings Ltd. are limited
due to the company's smaller scale and less public financial disclosures. Smaller NBFCs like
HB Stockholdings may face challenges in capitalizing on fiscal policy benefits due to
resource constraints and increased regulatory compliance costs.

2. Ladderup Finance

As a smaller NBFC, Ladderup Finance may encounter difficulties in leveraging fiscal policy
measures aimed at stimulating economic growth. Resource limitations and heightened
regulatory requirements could impact its ability to expand lending activities.

3. Futuristic Solutions Ltd.

Limited information is available regarding the direct impact of fiscal policy changes on
Futuristic Solutions Ltd., given its niche market focus and size. Smaller NBFCs may need to
explore strategic partnerships or niche markets to navigate the evolving financial landscape
effectively.

4. Aastamangalam Finance Ltd.

Specific impacts on Aastamangalam Finance Ltd. are not readily available due to the
company's limited public financial information. Smaller NBFCs may need to focus on
strengthening their capital base and exploring alternative funding sources to remain
competitive.

5. Gowra Leasing and Finance Ltd.

Gowra Leasing & Finance Ltd. has demonstrated notable financial growth, with a 47.62%
increase in net profit during the March 2024 quarter and a 14.00% rise in the September 2024
quarter. Additionally, the company's stock price reached an all-time high of ₹73.85 on
September 2, 2024, outperforming the sector by 6.96%. These positive trends suggest that
Gowra Leasing India's Foreign Trade Policy (FTP) 2023, effective from April 1, 2023,
introduces several provisions aimed at enhancing the country's export potential and
streamlining import processes. These measures have significant implications for Non-
Banking Financial Companies (NBFCs) that finance export-oriented industries or those
reliant on imports.
Key Provisions Affecting Export-Focused Industries and Import-Dependent
Sectors:

1. Advance Authorization Scheme Enhancements:

o Special Advance Authorization for Apparel and Clothing: This scheme now
allows duty-free import of raw materials for manufacturing export items in the
apparel and clothing sector on a self-declaration basis, facilitating prompt
execution of export orders
o Self-Ratification Scheme Extension: The benefits of this scheme for fixation of
Input-Output Norms have been extended to 2-star and above status holders, in
addition to Authorized Economic Operators, simplifying the process for more
exporters
2. Merchanting Trade Provisions: FTP 2023 introduces provisions for merchanting trade,
allowing shipment of goods from one foreign country to another without touching Indian
ports, involving an Indian intermediary. This is subject to compliance with RBI
guidelines and excludes items listed under CITES and SCOMET.
3. Amnesty Scheme for Export Obligation Defaults: A special one-time Amnesty
Scheme addresses defaults on Export Obligations under EPCG and Advance
Authorizations. Exporters can regularize pending cases by paying customs duties
proportionate to unfulfilled obligations, with interest capped at 100% of exempted duties.
4. E-Commerce Export Facilitation: Recognizing the potential of e-commerce, FTP 2023
outlines a roadmap for establishing e-commerce hubs and related facilities. The
consignment-wise cap on e-commerce exports through courier has been raised from ₹5
lakhs to ₹10 lakhs, boosting exports for small and medium-sized e-commerce enterprises.

Implications for NBFCs:

NBFCs play a pivotal role in financing industries engaged in exports and those dependent on
imports. The provisions in FTP 2023 present several opportunities and considerations for
NBFCs:
 1. Enhanced Financing Opportunities: With the introduction of schemes like the Special
Advance Authorization and the expansion of the Self-Ratification Scheme, export-
oriented industries may seek additional financing to capitalize on these benefits. NBFCs
can cater to this increased demand for working capital and investment in export
infrastructure.
2. Support for Merchanting Trade: The new provisions for merchanting trade open
avenues for NBFCs to finance transactions involving Indian intermediaries facilitating
global trade between foreign countries. This can diversify NBFCs' portfolios and revenue
streams.
3. Risk Mitigation through the Amnesty Scheme: The Amnesty Scheme allows exporters
to regularize defaults, potentially improving the credit profiles of existing clients. NBFCs
should assess the impact of this scheme on the financial health of their borrowers and
adjust their risk management strategies accordingly.
4. E-Commerce Sector Growth: The facilitation of e-commerce exports presents an
opportunity for NBFCs to finance emerging e-commerce enterprises looking to expand
their global footprint. Tailored financial products can be developed to support this
dynamic sector.

In conclusion, FTP 2023 introduces strategic measures that can significantly influence the
operations and opportunities for NBFCs involved with export-oriented and import-dependent
industries. NBFCs should proactively align their services to support clients in leveraging these
new provisions, thereby fostering growth in India's international trade landscape.

The latest Exim Policy focuses on simplifying trade, promoting exports, and supporting
industries with significant import components, including NBFCs, with initiatives
like streamlined import procedures, incentives for export-oriented businesses, and support for
emerging sectors and e-commerce.

Here's a more detailed analysis of key provisions:

1. Streamlining Trade and Reducing Restrictions:

  The policy aims to reduce bureaucratic hurdles and simplify procedures for exporters and
importers, promoting ease of doing business.

 This includes streamlining import licensing processes for major items.

 The policy also focuses on reducing transaction costs and promoting e-initiatives.

2. Incentives and Support for Export-Oriented Businesses:

 Export Promotion Rationalisation of Capital Goods (EPCG Scheme):This scheme

allows for the import of capital goods with zero customs duty for export productions.

 Focus on Emerging Sectors:The policy encourages diversification of the export basket

and supports emerging industries like renewable energy and technology-driven
manufacturing with specific incentives.

 Support for MSMEs:Small businesses receive subsidies and financial assistance to help
them compete globally.

 Towns of Export Excellence (TEE):The policy designates certain towns as TEEs,

promoting exports from those areas.

 Exim Bank Initiatives: The Exim Bank provides financial assistance, guarantees, and
advisory services to support exporters, including those in the NBFC sector.

 Trade Assistance Programme (TAP): This initiative from Exim Bank provides credit
enhancement to trade instruments, supporting cross-border trade transactions and
enhancing the capacity of commercial banks to support such transactions.

3. Focus on Global Markets and Emerging Areas:

 Market Diversification: The policy encourages diversification of Indian exports by

including new countries within the ambit of Focus Market Scheme.

 E-commerce Exports: The policy supports the establishment of e-commerce hubs and
facilitates e-commerce exports.
  Collaboration and Partnerships: The policy emphasizes collaboration between
exporters, states, districts, and Indian missions to promote exports.

 SCOMET Policy Optimization: The policy optimizes the SCOMET (Special

Chemicals, Organisms, Materials, Equipment and Technologies) policy, reflecting a
comprehensive approach to India's foreign trade.

4. Relevance to NBFCs:

 Financial Support: NBFCs can benefit from Exim Bank's financial assistance, including
lines of credit and guarantees, to support their export financing activities.

 Streamlined Procedures: The policy's focus on reducing restrictions and simplifying

procedures can help NBFCs navigate the complexities of international trade more easily.

 Access to Global Markets: The policy's focus on market diversification and emerging
areas can help NBFCs identify new opportunities for export financing.

 Risk Mitigation: The Trade Assistance Programme (TAP) can help NBFCs mitigate
risks associated with cross-border trade transactions.

 Export Advisory Services: Exim Bank's Export Advisory Services can assist NBFCs in
managing international risks and identifying opportunities
5.2. Key Alliances in the past 5 years and their performance & impact on other players
in the industry, Mergers & Acquisitions,

Over the past five years, India's Non-Banking Financial Companies (NBFCs) have
experienced significant transformations through mergers, acquisitions, and strategic alliances.
These developments have reshaped the financial landscape, impacting various industry
players.

Key Mergers and Acquisitions:

1. HDFC Ltd. and HDFC Bank Merger (2023): In a landmark move, Housing
Development Finance Corporation (HDFC) Ltd. merged with HDFC Bank, creating a
financial behemoth. This consolidation aimed to unify their complementary strengths,
enhancing their competitive edge in both banking and housing finance sectors.

2. IDFC Bank and Capital First Merger (2018): IDFC Bank and Capital First, an
NBFC, completed their merger to form IDFC First Bank. This integration was
designed to leverage Capital First's retail lending expertise and IDFC Bank's
infrastructure, aiming for a diversified financial portfolio.

3. Allianz's Exit from Bajaj Finserv Joint Ventures (2025): In March 2025, Allianz
sold its 26% stake in joint ventures with Bajaj Finserv to the Bajaj Group for
approximately €2.6 billion. This move concluded a longstanding partnership, with
Allianz expressing intentions to explore new opportunities in the Indian market.

Impact on Industry Players:

 Market Consolidation: These mergers have led to the emergence of larger, more
robust financial entities, intensifying competition and prompting smaller NBFCs to
reassess their market strategies.

 Regulatory Adjustments: The Reserve Bank of India (RBI) has been vigilant,
cautioning NBFCs against aggressive growth strategies that could jeopardize financial
stability. This has led to stricter regulatory oversight

 Strategic Partnerships: The evolving landscape has encouraged NBFCs to form

alliances with banks and fintech firms, aiming to enhance service offerings and
expand market reach. For instance, Jio Financial Services engaged in discussions with
Allianz for potential insurance partnerships, reflecting a trend towards diversification.
5.3. Technological Developments, Labour Unrest , and Their
Impact on NBFC’s.

The Non-Banking Financial Company (NBFC) sector in India has undergone rapid
transformation due to technological advancements, with increasing digitization, artificial
intelligence (AI)-driven risk assessment, and automation in lending and financial services.
However, while technology has streamlined operations, it has also disrupted traditional jobs
and led to concerns regarding workforce adaptation, job losses, and potential labour unrest.
Below is a detailed analysis of technological developments and labour issues impacting:

Top Five Players :- Bajaj Finance, IRFC Ltd, Chola Invest, Bajaj Holdings, Shriram
Finance.

Bottom Five Players :- HB Stockholdings, Ladderup Finance, Futuristic Solutions Ltd,

Aastamangalam Finance Ltd, and Gowra Leasing and Finance Ltd.

Technological Developments and Their Impact on NBFC’s :

A. Digital Transformation in the NBFC Sector :

NBFCs have increasingly embraced automation, AI-based credit scoring, blockchain-

based transactions, and digital lending platforms to enhance efficiency, reduce costs, and
improve customer experience. Some of the key technological trends in the sector include:

 AI & Big Data for Risk Assessment: Advanced algorithms analyze customer data,
reducing loan approval time and enhancing fraud detection.
 Digital Lending Platforms: NBFCs are shifting to app-based lending, reducing
reliance on physical branches.
 Robotic Process Automation (RPA): Automates repetitive tasks like customer KYC,
loan disbursal, and collections, reducing manual intervention.
 Blockchain & Smart Contracts: Used for secure, transparent transactions, though
adoption is still limited.
 Cloud Computing & API Banking: Facilitates seamless integration with banks and
fintech companies.
Impact on the NBFC Industry

Increased efficiency in loan disbursements, reducing processing times from weeks to

hours.Cost savings due to reduced dependency on physical infrastructure and manual
processes.Enhanced customer experience with personalized financial products and digital
access.Higher cybersecurity risks, requiring investment in data protection and fraud
prevention. Workforce displacement, leading to reskilling challenges and potential labour
unrest.

B. Technological Impact on Specific NBFC Players :

1. Bajaj Finance :

Invested heavily in AI-driven risk management & digital lending.Developed a super-

app for customer transactions.Impact: Improved loan processing speed, but reduced
reliance on manual underwriting, leading to job reductions in back-office operations.

2. IRFC Ltd (Indian Railway Finance Corporation) :

Being a government-backed financial institution, IRFC has limited adoption of digital

lending, focusing instead on systematic digitization of railway finance.

Impact: Minimal job displacement as it follows public sector employment norms.

3. Chola Invest (Cholamandalam Investment & Finance) :

AI-driven credit assessment in vehicle financing. Partnerships with fintech firms for
digital lending. Impact: Higher efficiency but reduced demand for traditional field
officers, leading to employee transitions.

4. Bajaj Holdings :

Technology-driven investment strategies, relying on algorithmic trading and digital

portfolio management. Impact: Minimal direct workforce impact due to the nature of
its investment-based business.
 5. Shriram Finance :

Implemented digital collections & AI-based risk models.Automated loan approvals

for commercial vehicles. Impact: Reduced manual processing roles, but enhanced
customer service roles in digital banking.

6. HB Stockholdings &Ladderup Finance :

Focused on investment and asset management, relying on AI-based trading strategies.

Impact: Shift toward automated trading platforms, reducing demand for manual
analysts.

7. Futuristic Solutions Ltd, Aastamangalam Finance Ltd, Gowra Leasing and

Finance Ltd :

Smaller NBFCs with limited tech adoption. Impact: Lower immediate disruption, but
future competitiveness is threatened by fintech-based lenders.

1. Labour Unrest in the NBFC Sector :

A. Reasons for Labour Unrest in the NBFC Industry:

While the NBFC industry has not witnessed large-scale labour unrest, certain factors
contribute to workforce dissatisfaction and potential disruptions:

1. Job Displacement Due to Automation: Many NBFCs are downsizing their back-
office workforce as digital processes take over. Customer service roles are being
replaced by chatbots and AI-powered assistants.
2. Pressure on Sales & Collection Agents: Digital lending reduces the need for field
officers, forcing employees to reskill or lose jobs. Collection teams face increased
pressure due to strict RBI regulations on loan recovery practices.
3. Increased Outsourcing & Gig Work: Many NBFCs outsource IT and customer
support roles to external vendors, leading to job insecurity. Shift toward contract-
based employment rather than full-time jobs.
 4. Unionization & Protests in Financial Services : While banks have strong employee
unions, NBFCs have weaker labour representation, leading to discontent over layoffs
and job security.

B. Labour Unrest Impact on Specific NBFC Players:

1. Bajaj Finance : Faced employee dissatisfaction due to aggressive sales targets &
automation-driven job losses. Minimal organized protests, but high attrition in sales
roles.
2. IRFC Ltd : As a government-owned entity, IRFC employees have stronger job
security with no major labour issues.
3. Chola Invest : Workforce transition issues due to digitalization, particularly among
loan recovery teams has reskilled employees, reducing unrest.
4. Shriram Finance: Faced pressure from field staff due to digital loan recovery tools
replacing manual processes. Increased focus on customer service reskilling to manage
labour concerns.
5. HB Stockholdings, Ladderup Finance, Futuristic Solutions, Aastamangalam
Finance, Gowra Leasing : Being smaller NBFCs, these firms have smaller
workforces with limited job disruptions. Employee turnover issues exist, but no major
labour unrest.

3. Overall Industry Impact of Technology & Labour Changes:

 Efficiency Gains: Technology has significantly improved loan approval rates, risk
assessment, and financial transactions, benefiting large NBFCs.

 Cost Reduction: Automation has helped cut operational expenses, improving

profitability.

 Job Losses & Workforce Restructuring: Thousands of back-office and field

jobs are being replaced by digital processes.
 Higher Compliance Burden: Digital transformation requires cybersecurity
investments and data protection measures. .
5.4. Emerging First Generation Entrepreneurs in the NBFC Industry

In recent years, the NBFC sector has witnessed the rise of several first-generation
entrepreneurs who have brought fresh perspectives, digital innovation, and customer-centric
models. Some notable names and trends include:

a. Vembu Vembu - Zoho & IIFL Finance

Although primarily known for software, Vembu’s engagement with fintech and financial
inclusion has influenced NBFC structures through partnerships and technological integration
with firms like IIFL.

b. Ranganathan of Five Star Business Finance

A home-grown NBFC, Five Star Business Finance, led by first-generation entrepreneur K. R.

Ranganathan, caters to the credit needs of small business owners and has expanded
significantly through a tech-driven, grassroots model.

c. Gaurav Hinduja - Capital Float

Founded by Gaurav Hinduja and Sashank Rishyasringa, Capital Float is a digital NBFC
providing flexible credit to SMEs. Their approach combines financial services with
innovative technology, such as machine learning for underwriting.

d. Impact of Startups and Fintechs

Entrepreneurs in companies like Lendingkart, Aye Finance, and Indifi have transformed the
NBFC landscape by focusing on data analytics, AI, and cloud-based platforms to provide
seamless credit services, even in tier 2 and tier 3 cities.

e. Challenges Faced

First-generation entrepreneurs often face challenges such as:

 Regulatory compliance complexity

 Capital sourcing and maintaining capital adequacy ratios
 Customer trust and education in semi-urban/rural areas
  Competition from traditional banks and large NBFCs

Despite these, their ability to pivot quickly and innovate has made them crucial players in the
financial ecosystem.

5.5. Corporate Wars & Feuds in the NBFC Industry

The NBFC sector in India has not been without its share of dramatic corporate feuds and
power struggles. These conflicts have shaped the industry's evolution, governance practices,
and investor perceptions.

a. IL&FS Crisis (2018)

One of the most high-profile collapses in the Indian NBFC space, IL&FS (Infrastructure
Leasing & Financial Services) defaulted on several payments, sparking a liquidity crisis
across the sector.

 Key Conflict: Internal governance failures, mismanagement, and power

concentration among top executives.
 Impact: The crisis led to panic among investors and mutual funds, severely affecting
the credibility of NBFCs and triggering stricter regulatory oversight.

b. DHFL Scandal: Dewan Housing Finance Corporation Ltd (DHFL) was once a leading
housing finance NBFC. Founders Kapil and Dheeraj Wadhawan were arrested for fraud and
siphoning off funds.

 Key Conflict: Family-led corporate governance breakdown, fraudulent loans, and

conflict of interest.
 Impact: DHFL’s collapse created shockwaves, leading to greater scrutiny of housing
finance NBFCs and a temporary freeze in credit flow to the sector.

c. SREI Group Tussle

SREI Infrastructure Finance faced significant internal management conflicts and investor
backlash due to non-performing assets and poor governance.
  Key Conflict: Disputes between stakeholders over asset valuation, restructuring, and
leadership roles.
 Impact: RBI stepped in with a resolution process, highlighting the need for
transparent governance in NBFCs.

d. Reliance Capital Feud

Reliance Capital, part of the Anil Ambani-led Reliance Group, has seen its fair share of
financial stress, governance issues, and boardroom battles.

 Key Conflict: Alleged mismanagement of funds, disputes with creditors, and internal
group conflicts.
 Impact: The RBI superseded the board, signaling a more interventionist regulatory
stance.

Lessons Learned and the Way Forward

a. Governance and Transparency

The need for strong internal governance and clear operational frameworks is evident.
Regulatory bodies have started focusing more on the fit-and-proper criteria for NBFC
directors and CEOs.

b. Regulatory Evolution

Post-2018, RBI has tightened liquidity norms and supervision. Initiatives like the scale-based
regulation (SBR) framework aim to classify NBFCs based on their size and risk potential.

c. Role of Technology

Emerging entrepreneurs are showing how technology can mitigate risks, enhance customer
experience, and ensure compliance. Digitization is becoming a critical factor in the survival
and growth of NBFCs.
d. Market Consolidation

With weaker players falling behind due to financial mismanagement, the market is witnessing
consolidation. Strong, well-governed NBFCs are acquiring smaller or stressed entities.

e. Investor Caution and Confidence

Institutional investors are becoming more cautious, demanding higher transparency and due
diligence before investing in NBFCs.

NBFCs remain an essential part of India’s financial ecosystem, driving inclusion and
economic development. The rise of first-generation entrepreneurs has infused the sector with
innovation and customer-centric approaches, while corporate feuds have exposed the dire
need for robust governance.

Going forward, a balance of innovation, regulation, and responsible leadership will determine
the resilience and growth trajectory of the NBFC sector in India.
Bibliography :
1.Bajaj Finance :

https://www.bajajfinserv.in/finance-digital-annual-report-fy22/csr-annual-report.html?

https://www.bajajgroup.company/blog/category/csr/?

https://cms-assets.bajajfinserv.in/is/content/bajajfinance/bfs-empowering-society-v1pdf?
fmt=pdf&scl=1

https://economictimes.indiatimes.com/news/company/corporate-trends/bajaj-group-commits-
rs-5000-cr-for-five-years-towards-csr-initiatives/articleshow/108715450.cms?

https://thecsrjournal.in/csr-report-bajaj-finance-limited-bajaj-finserv-corporate-social-
responsibility/

2. IRFC (Indian Railway Finance Corporation LTD.) :

https://irfc.co.in/sites/default/files/inline-files/CSR-Policy.pdf?

https://irfc.co.in/csr?

https://www.climatebonds.net/certification/indian-railway-finance-corporation

3. Bajaj Holdings :

https://www.outlookbusiness.com/companies/bajaj-group-commits-rs-5000-crore-under-
corporate-social-responsibility?

https://thecsrjournal.in/bajaj-foundation-corporate-social-responsibility-csr-un-sustainable-
development-goals-sdgs-csr-news-report/

https://www.bhil.in/pdf/CSR-Policy.pdf

4. Chola Invest :

https://www.cholamandalam.com/community-relations?

https://www.linkedin.com/posts/cholafinance_chola-corporatesocialresponsibility-
csrexcellence-activity-7277284384431333376-_CAy/

5. Shriram Finance :

https://www.shriramfinance.in/corporate-social-responsibility?
https://www.youtube.com/watch?v=mq6mwrGPoXw

https://cdn.shriramfinance.in/sfl-kalam/files/2023-06/CSR_Projects_FY_2023-24.pdf

6.HB Stockholdings :

https://www.hbstockholdings.com/

7.Futuristic Solutions LTD :

https://www.fsl.co.in/about_us.php

https://futuristicsol.com/our-company/

https://ca2013.com/135-corporate-social-responsibility/

8.Aastamangalam Finance LTD :

https://www.moneycontrol.com/annual-report/upasanafinance/directors-report/UF01

https://www.indiainfoline.com/company/aastamangalam-finance-ltd/reports/directors-report

9.Ladderup Finance :

https://www.ladderup.com/

10.Gowra Leasing and Finance LTD :

gowraleasing.com

Background Of Promoters

 https://www.bajajgroup.company/core-companies/bajaj-holdings-and-investment-
limited/
 https://en.wikipedia.org/wiki/Indian_Railway_Finance_Corporation
 https://www.bhil.in/about-bajaj.html
 https://www.cholamandalam.com/about-us
 https://www.shriramfortune.in/shriram-group.aspx#:~:text=Established%20in
%201974%2C%20Shriram%20Group,truck%20financing%20and%20chit
%20business
 https://www.moneycontrol.com/company-facts/hbstockholdings/history/HBS
  https://www.ladderup.com/team-boardofdirectors.htm#:~:text=Sunil%20Goyal,-
Founder%2C%20Chairman%20%26%20Managing&text=The%20founder%20of
%20Ladderup%20Group,India%20Regional%20Council%20of%20ICAI.
 https://www.fsl.co.in/about_us.php
 https://trendlyne.com/equity/about/2511/UPASAFN/aastamangalam-finance-ltd/
#:~:text=Aastamangalam%20Finance%20Limited%20(Formerly%20known,company
%20was%20changed%20in%20Jan.
 https://www.gowraleasing.com/

Key Government Initiatives to Promote the NBFC Sector in India

https://economictimes.indiatimes.com/news/economy/finance/nbfc-sector-strengthens-with-
rbis-positive-stance-and-rate-cut-support-for-growth-jefferies/articleshow/119034071.cms?
from=mdr

https://www.outlookbusiness.com/columns/the-budget-presents-a-chance-to-make-nbfc-
growth-more-robust

https://www.reuters.com/world/india/indias-nbfc-body-urges-government-create-liquidity-
facility-priority-sector-2025-01-02/

https://assets.kpmg.com/content/dam/kpmgsites/in/pdf/2024/02/nbfcs-in-india-growth-and-
stability.pdf.coredownload.inline.pdf