I. COMPANY OVERVIEW:
Apex Capital and Finance Limited (the "Company") is an NBFC and is engaged in the business of providing various financial services, such as loans, advances, investments, leasing, hire-purchase and more. The Company is regulated by the Reserve Bank of India (RBI) under the framework of the RBI Act, 1934. The main objective of the Company is to finance various individuals, corporates, firms, societies and Industrial enterprises by way of making loans and advances in India and to carry out all such activities as may be ancillary to the achievement of main objectives of the Company.
I. INDUSTRY STRUCTURE AND DEVELOPMENT
Overview of the Financial Services Landscape
The Indian financial ecosystem continued to display robust health and resilience during FY 2025 26, supported by positive macroeconomic conditions, multi-year low inflation, and real GDP expansion exceeding 8%. Non-Banking Financial Companies (NBFCs) strengthened their position as vital credit intermediaries within the domestic economy, accounting for approximately a quarter of total Scheduled Commercial Bank (SCB) credit. Consolidated balance sheets across the sector maintained a double-digit expansion trajectory.
Sectoral Credit Growth and Asset Quality
Credit Offtake: The sector recorded strong double-digit credit growth of outperforming broader systemic expansion across retail, MSME, vehicle, and affordable housing segments. Asset Quality Metrics: Systemic Gross Non-Performing Assets (GNPA) touched historic multi-decadal lows in FY 2025-26, driven by sustained efforts in stress resolution and implementation of stringent credit underwriting standards.
Regulatory Framework & Governance
Under the Reserve Bank of Indias (RBI) Scale-Based Regulation (SBR) framework, supervisory focus remained centered on credit concentration, digital lending practices, cybersecurity standards, and risk-weights on unsecured consumer credit. Regulatory directives on co-lending mechanisms, higher risk-weights for personal loans, and draft guidelines on Expected Credit Loss (ECL) frameworks have enhanced corporate governance and balance sheet resilience across listed entities.
2. OPPORTUNITIES AND THREATS
OPPORTUNITIES
1. Digital Infrastructure & Public Tech Platforms:
o Leveraging Public Tech Platforms including the Unified Logistics Interface Platform (ULIP) and Account Aggregator networks enables NBFCs to underwrite prime and below-prime borrowers with high accuracy and reduced customer acquisition costs.
o Innovative low-ticket financing models in Tier-2 and lower-tier cities expand market presence across underserved customer segments.
2. MSME Credit Demand: o The MSME sector registered outsized credit growth, benefiting from cash-flow-based underwriting, customized loan offerings, and doorstep delivery models offered by specialized NBFCs.
3. Co-Lending Models (CLM): o Strategic bank-NBFC co-lending partnerships enable entities to combine broad distribution channels with lower bank cost of capital, securing fee-based earnings while optimizing risk-weighted assets.
THREATS AND KEY RISK FACTORS
1. NIM Compression and Bank Borrowing Costs: o Caution from banks in lending to NBFCs and persistent competition for deposits have maintained elevated wholesale funding costs. Net Interest Margin (NIM) pressures and marginal upticks in credit costs pose headwinds for entities dependent on bank lines.
2. Asset Quality Stress in Specific Pockets: o Unsecured retail loans and microfinance segments show emerging stress, with NBFC-MFI GNPAs. The RBI has placed personal loan exposures under increased surveillance.
3. External and Operational Risks: o Downside risks stemming from global growth deceleration, tariff changes, and volatile crude oil prices could affect domestic trade activity. Additionally, operational risks related to high-value digital frauds require ongoing infrastructure investments.
3. OUTLOOK
SECTORAL TRAJECTORY
The outlook for Indian listed NBFCs as of March 31, 2026, remains Stable. Systemic credit expansion is anchored by strong domestic consumption, tax rationalization benefits, and steady demand in retail and MSME categories.
STRATEGIC IMPERATIVES
Liability Diversification: NBFCs are rebalancing funding structures through non-convertible debentures (NCDs), commercial papers, and retail term deposits to manage interest-rate sensitivity. Capital Profile & ECL Transition: Solvency and capital buffers will remain comfortable during the multi-year transition toward the proposed Expected Credit Loss (ECL) framework. Proactive Risk Mitigation: Focus will remain on maintaining higher Provision Coverage Ratios (PCR), tightening LTV ratios on unsecured loans, and utilizing AI-driven tools for fraud detection and collections. NBFCs are expected to play a crucial role in the India growth story fuelling formalised credit penetration among the underserved. Policy push, regulatory oversight and digital across the value chain are expected to define the growth of this sector.
Apex Capital and Finance Limited expects to improve its performance in financial year 2026-27. The approach would be to continue with the growth momentum while balancing risk. The Company will continue to invest in strengthening risk management practices; and in maintaining its investment in human resources to consolidate its position as a potential NBFC in India.
RISK MANAGEMENT:
Given the increasing volatility in todays global business environment, we are strengthening our risk management and mitigation framework. We view robust risk management as a cornerstone of good governance and sound business practice, essential for driving long-term organizational success and sustainability. Embedding risk management into our core strategy demands a structured process encompassing risk assessment, defining risk appetite, continuous monitoring, and regular evaluation. Equally critical is fostering a risk-conscious culture where employees across all levels recognize their role in managing risks and feel empowered to report potential issues early. Ultimately, a strong risk management framework enhances our resilience and ensures sustained success in an unpredictable market.
II. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:
The Company maintains a robust internal control framework tailored to its scale, nature, and operational complexity. This system is structured to drive operational efficiency, safeguard corporate assets, ensure accurate and timely financial reporting, and maintain strict compliance with statutory regulations. To evaluate the strength and effectiveness of these controls, the Company relies on an independent internal audit process that regularly assesses operational systems, processes, and regulatory adherence. Audit findings are thoroughly discussed with Management and presented to the Boards Audit Committee, which reviews the overall adequacy, efficacy, and continuous improvement of the Companys internal control environment
III. DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL
PERFORMANCE:
The financial performance of the Company during the year under reference was reasonably good. For detailed information, please refer to Directors Report, which forms part of this Annual Report.
IV. MATERIAL DEVELOPMENTS IN HUMAN RESOURCES/ INDUSTRIAL RELATIONS FRONT, INCLUDING NUMBER OF PEOPLE EMPLOYED:
Our people are our most valuable asset, and we nurture this asset through an open, transparent, and merit-based culture. Through robust talent management, Apex Capital and Finance Limited systematically identifies, recruits, develops, and retains top professionals across the organization. This focus has enabled us to maintain attrition rates consistently below industry benchmarks. We remain committed to high employee engagement and maintain a strong, responsive grievance redressal system where every employee concern is promptly addressed. Powered by a positive work culture, we continuously strive for operational excellence.
IIFL Customer Care Number
(Gold/NCD/NBFC/Insurance/NPS)
1860-267-3000 / 7039-050-000
IIFL Capital Services Support WhatsApp Number
+91 9892691696
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