You should read the following discussion of our financial condition and results of operations in conjunction with our Restated Financial Information on page 248, which includes our Restated Standalone Financial Information and our Restated Consolidated Financial Information for Fiscals 2025, 2024 and 2023.
This Draft Red Herring Prospectus may include forward-looking statements that involve risks and uncertainties, and our actual financial performance may materially vary from the conditions contemplated in such forward-looking statements as a result of various factors, including those described below and elsewhere in this Draft Red Herring Prospectus. For further information, see "Forward-Looking Statements" on page 38. Also see "Risk Factors" and " Significant Factors Affecting our Results of Operations and Financial Condition" on pages 40 and 372, respectively, for a discussion of certain factors that may affect our business, financial condition or results of operations.
Our financial year commences on April 1 and ends on March 31 of the subsequent year, and references to a particular financial year are to the 12 months ended March 31 of that year. Unless otherwise indicated, or the context otherwise requires, the financial information included herein is based on our Restated Financial Information included in this Draft Red Herring Prospectus. Unless otherwise stated or the context otherwise requires, references in this section to "we", "us", or "our" are to Asset Reconstruction Company (India) Limited on a consolidated basis, while "our Company" or "the Company" are to
Asset Reconstruction Company (India) Limited on a standalone basis.
Unless otherwise indicated, industry and market data used in this section has been derived from the industry report titled
"Analysis of Asset Reconstruction Industry in India" dated July, 2025 (the "CRISIL Report") prepared and issued by CRISIL Limited, appointed by us pursuant to an engagement letter dated March 11, 2025 and exclusively commissioned and paid for by us to enable investors to understand the industry in which we operate in connection with the Offer. The data included herein includes excerpts from the CRISIL Report and may have been re-ordered by us for the purposes of presentation. Unless otherwise indicated, financial, operational, industry and other related information derived from the CRISIL Report and included herein with respect to any particular Calendar Year/ Fiscal refers to such information for the relevant calendar year/ Fiscal. A copy of the CRISIL Report shall be available on the website of our Company from the date of the Red Herring Prospectus until the Bid/ Offer Closing Date. For further information, see "Risk Factors Certain sections of this Draft Red
Herring Prospectus disclose information from the industry report titled "Analysis of Asset Reconstruction Industry in India" which is a paid report and commissioned and paid for by us exclusively in connection with the Offer and any reliance on such information for making an investment decision in the Offer is subject to inherent risks." on page 61. Further, while we operate across three business verticals of Corporate loans, SME and Other loans and Retail loans, we classify the stressed assets that we acquire based on the resolution mechanism we employ which are subject to our internal assessments. However, the CRISIL Report classifies the industry into Corporate/ Large borrower, MSME and Retail loans on the basis of classification done by the RBI. Also see, "Certain Conventions, Currency of Presentation, Use of Financial Information and Market Data Industry and Market Data" on page 36.
OVERVIEW
For details regarding the overview of our Business, see "Our Business Overview" on page 165.
SIGNIFICANT FACTORS AFFECTING OUR RESULTS OF OPERATIONS
Our results of operations and financial condition are affected by a number of important factors including:
Our ability to acquire stressed assets at appropriate prices
Our results of operations are affected by our ability to source stressed assets and acquire them at appropriate prices; the overall supply of stressed assets in the market; and the size of our portfolio. However, our ability to acquire stressed assets at appropriate prices has been a key driver of our results of operations and we expect this trend to continue in the future. While acquiring stressed assets, we undertake extensive diligence and detailed valuation and business analysis in order to determine the appropriate purchase price and consider several factors including the value of the underlying collateral, profile and background of the borrowers, realizable future cash flows from underlying business operations and industry of the borrower. We also evaluate the potential resolution strategy that we would implement to maximize the potential of recovery and the potential time involved in pursuing the relevant resolution mechanism under the IBC, SARFAESI Act or the DRT, as applicable. For acquiring retail stressed assets, we also use our technology platform and data analytics tools to enhance both acquisition pricing and collection efficiency.
We acquire single-credit and portfolios of stressed assets from regulated financial institutions through a competitive bidding process and in certain cases through bilateral negotiations, in compliance with applicable regulations. We have established strong relationships with banks and financial institutions which helps us in acquiring stressed assets. Since our inception, we have worked with 30 private sector banks (including two erstwhile banks which have since been merged and nine foreign banks), two co-operative banks, 28 public sector banks (including 16 erstwhile public sector banks which have since been merged), 41 non-banking financial companies (including one erstwhile non-banking financial company which has since been merged), 17 housing finance companies (including one erstwhile housing finance company which has since been merged) and seven other selling institutions (four insurance companies and three financial institutions). As of March 31, 2025, we had acquired 726,573.07 million in total principal debt at a cost of 381,556.32 million or 52.51% of the total principal debt and had made recoveries of 284,597.72 million. Further, during Fiscals 2025, 2024 and 2023, we acquired 39,758.71 million, 20,689.82 million and 42,889.62 million of stressed assets, respectively, and our AUM was 168,525.70 million as of March 31, 2025, 152,300.31 million as of March 31, 2024 and 162,234.83 million as of March 31, 2023.
Our ability to collect outstanding amounts
The effective collection of outstanding amounts on the stressed assets we acquire is crucial to our results of operations. We have established a robust collections framework and specialized collection teams for each of our three business verticals. Our collections for Corporate and SME and Other loans are manged by our in-house teams where our dealing officers and in-house legal officers engage with borrowers to recover dues through restructuring negotiations or enforcement actions. We utilize a digital collections platform with customer relationship management and loan collection workflow tools for tracking and enhancing borrower communication, borrower segmentation, payment prioritization schedules and also legal actions. We use data analytics and scorecards prioritization model to segment and prioritize accounts based on the risk and potential for recovery to improve our collections efficiency. We work with collection agencies, selling institutions, fintech platforms and local recovery agents who specialize in tracing defaulters, negotiating settlements, and ensuring timely repayments. As of March 31, 2025, we worked with 201 registered valuers, 163 collection agents and had over 950 lawyers empanelled with us. As a result of our collections framework and efforts within our resolution framework, we were able to increase the amounts we collected during the last three Fiscals from 27,167.57 million in Fiscal 2023 to 36,781.46 million in Fiscal 2024 and 38,826.55 million in Fiscal 2025.
General economic condition in India
Our results of operations are affected by the general economic conditions prevalent in India. Overall economic growth is affected by several factors including general levels of GDP growth and growth in personal income in India; political measures or developments, such as tax incentives and general political stability; fiscal and monetary dynamics, such as volatility in interest rates, foreign exchange rates and inflation rates; and regulatory developments. An increase in GDP is likely to result in an increase in incomes and the ability of borrowers to repay outstanding amounts. Conversely, a slowdown in the Indian economy could adversely affect the ability of borrowers to make repayments, especially if such a slowdown were to be continued and prolonged. An economic upturn helps us in improved recoveries against our AUM, while an economic downturn generates higher stressed assets in the financial sector which we can acquire to resolve. Several factors beyond our control, such as developments in the Indian economy, employment levels, conditions in the world economy, pandemics such as COVID-19, fluctuations in interest rates, movements in global commodity markets and exchange rates could have either a positive or an adverse impact on the quality of our portfolio.
Government policy and regulations
Our results of operations and continued growth depend on stable government policies and regulations. We are required to comply with various laws, statutory and regulatory requirements including the SARFAESI Act, the IBC, the Recovery of Debts and Bankruptcy Act, 1993 and the RBI Master Directions pursuant to which we have to comply with certain conditions including (i) having a minimum net owned fund of 3,000.00 million on an ongoing basis by March 31, 2026; (ii) classification of assets in accordance with the manner prescribed under the RBI Master Directions; and (iii) provisioning as per different asset categories prescribed under the RBI Master Directions. In accordance with RBI guidelines, security receipts that are held by us and not redeemed within a timeframe of eight years are required to be treated as loss assets and written-off in the books of investors and the asset reconstruction company. However, the resolution of such stressed assets continues until the entire recovery proceeds are received, which results in a positive impact on our results of operations and cash flows. Hence, our AUM is bifurcated into more than eight years and less than eight years as indicated below:
( million)
| Particulars | As of March 31, 2025 | As of March 31, 2024 | As of March 31, 2023 |
| AUM | 168,525.70 | 152,300.31 | 162,243.83 |
| Security receipts held for less than eight years | 96,605.85 | 79,309.45 | 87,243.25 |
| Security receipts held for more than eight years | 71,919.85 | 72,990.86 | 74,991.58 |
The following table sets forth details of the ageing of our AUM, as of March 31, 2025:
| Particulars | AUM ( in million) | Our share in the AUM ( in million) | % of our share in the AUM |
| Up to 1 year | 37,462.37 | 11,549.31 | 30.83% |
| More than 1 year and up to 3 years | 33,246.47 | 7,554.28 | 22.72% |
| Particulars | AUM ( in million) | Our share in the AUM ( in million) | % of our share in the AUM |
| More than 3 years and up to 5 years | 17,643.86 | 3,660.37 | 20.75% |
| More than 5 years and up to 8 years | 8,253.15 | 2,684.36 | 32.53% |
| Over 8 years | 71,919.85 | 7,534.69 | 10.48% |
Further, the RBI Master Directions requires our Company to maintain, on an ongoing basis, a capital adequacy ratio of minimum 15% of our total risk weighted assets. The regulations applicable to us also address issues such as our conduct with borrowers and recovery practices, market conduct and foreign investment. Any significant change by the Government or the RBI in their various policy initiatives for the asset reconstruction industry may affect our results of operations. For further details, see "Risk Factors - We may have to comply with stricter regulations and guidelines issued by regulatory authorities in India, including the RBI, which may increase our compliance costs, divert the attention of our management and subject us to penalties." on page 47.
Competition
We operate in a highly competitive industry and our competitors may have more resources than us, access to cheaper funding and stronger relationships with banks and financial institutions. In July 2021, a government asset reconstruction company was incorporated with majority stake held by public sector banks in India, with the objective of cleaning up legacy stressed assets with an exposure of 5,000 million and above in the Indian banking system. This initiative could lead to increased competition in the asset reconstruction sector, potentially affecting our ability to acquire stressed assets at appropriate prices. Furthermore, the SRs issued by this government asset reconstruction company are backed by the Government of India, which may make it a preferred choice for banks and financial institutions over other ARCs in India. (Source: CRISIL Report) While this government asset reconstruction company mainly acquires and resolves stressed corporate assets above 5,000 million, increased levels of competition could reduce the volume of stressed assets available for us to acquire and affect our results of operations.
SUMMARY OF MATERIAL ACCOUNTING POLICIES (RESTATED CONSOLIDATED FINANCIAL INFORMATION)
Basis of Preparation and Presentation
The Restated Consolidated Financial Information of our Company together with its trusts (the subsidiaries and the associates) comprises the restated statement of assets and liabilities as on March 31, 2025, March 31, 2024 and March 31, 2023, the restated statement of profit and loss (including other comprehensive income), restated statement of changes in equity and restated statement of cashflows for the year ended March 31, 2025, March 31, 2024 and March 31, 2023 and the summary of material accounting policy and explanatory information. The Restated Consolidated Financial Information has been prepared by our Company in terms of requirement of sub-section (1) of section 26 of Part I of Chapter III of the Companies Act, 2013, and rules made thereunder as amended; the SEBI ICDR Regulations; and the Guidance Note on reports in company prospectus (Revised 2019) issued by the Institute of Chartered Accountants of India. The Restated Consolidated Financial Information is prepared by our management for the purpose of inclusion in this Draft Red Herring Prospectus in connection with the Offer.
The Restated Consolidated Financial Information has been prepared on accrual and going concern basis. The accounting policies are applied consistently to all the periods presented in the Restated Financial Information. The Restated Consolidated Financial Information have been prepared on the historical cost basis except for certain financial instruments that are measured at fair values at the end of each reporting period, as explained in the accounting policies below.
The financial results have been prepared in accordance with the recognition and measurement principles laid down in Indian Accounting Standards, notified under Section 133 of the Companies Act, 2013 read with Companies (Indian Accounting Standards) Rules 2015, as amended from time to time, and other accounting principles generally accepted in India.
Historical cost is generally based on actual consideration given in exchange for goods and services. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, we take into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date. Fair value for measurement and/ or disclosure purposes in these financial statements is determined on this basis.
Fair value measurements are categorised into Level 1, 2, or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety.
Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that our Company can access at the measurement date;
Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and
Level 3 inputs are unobservable inputs for the asset or liability.
Basis of Consolidation
The Restated Consolidated Financial Information comprise the financial statements of our Company and the entities controlled by our Company, our Subsidiaries, and our associates. Control is achieved when we: have power over the investee (i.e. existing rights that give us the current ability to direct the relevant activities of the investee), are exposed or has rights, to variable returns from its involvement with the investee, and have the ability to use our power over the investee to affect its returns.
We reassess whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control listed above.
Income and expenses of a subsidiary acquired or disposed off during the year are included in the consolidated financial statements from the date we obtain control until the date we cease to control the subsidiary.
Profit or loss and each component of other comprehensive income ("OCI") are attributed to the owners of our Company and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance.
When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with our accounting policies. The financial statements of all entities used for the purpose of consolidation are drawn up to same reporting date as that of our Company.
All intragroup assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of our Company are eliminated in full on consolidation.
A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction. If we lose control over a subsidiary, we:
derecognise the assets (including goodwill) and liabilities of the subsidiary; derecognise the carrying amount of any non-controlling interests; derecognise the cumulative translation differences recorded in equity; recognise the fair value of the consideration received; recognise any surplus or deficit in profit or loss; and reclassify the parents share of components previously recognised in OCI to profit or loss or retained earnings, as appropriate, as would be required if we had directly disposed off the related assets or liabilities.
The associate is an entity over which we have significant influence. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies. The investment is initially recognised at cost, and the carrying amount is increased or decreased to recognise the investors share of the profit or loss of the investee after the acquisition date. Our investment in associates includes goodwill identified on acquisition.
Application of New and Revised Ind AS
Standard Issued and Effective:
All the Ind AS issued and notified by the Ministry of Corporate Affairs under the Companies (Indian Accounting Standards) Rules, 2015 (as amended) till the financial statements are authorised for issue have been considered in preparing these financial statements.
Investment in Associates
An associate is an entity over which we have significant influence. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies.
The results and assets and liabilities of associates are incorporated in these consolidated financial statements using the equity method of accounting, except when the investment, or a portion thereof, is classified as held for sale, in which case it is accounted for in accordance with Ind AS 105. Under the equity method, an investment in an associate is initially recognised in the consolidated balance sheet at cost and adjusted thereafter to recognise our share of the profit or loss and other comprehensive income of the associate. Distributions received from an associate reduce the carrying amount of the investment. When our share of losses of an associate exceeds our interest in that associate (which includes any long-term interests that, in substance, form part of our net investment in the associate), we discontinue recognising our share of further losses. Additional losses are recognised only to the extent that we have incurred legal or constructive obligations or made payments on behalf of the associate.
An investment in an associate is accounted for using the equity method from the date on which the investee becomes an associate. On acquisition of the investment in an associate, any excess of the cost of the investment over our share of the net fair value of the identifiable assets and liabilities of the investee is recognised as goodwill, which is included within the carrying amount of the investment. Any excess of our share of the net fair value of the identifiable assets and liabilities over the cost of the investment, after reassessment, is recognised directly in equity as capital reserve in the period in which the investment is acquired.
After application of the equity method of accounting, we determine whether there any is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the net investment in an associate and that event (or events) has an impact on the estimated future cash flows from the net investment that can be reliably estimated. If there exists such an objective evidence of impairment, then it is necessary to recognise impairment loss with respect to our investment in an associate.
When necessary, the entire carrying amount of the investment (including goodwill) is tested for impairment in accordance with Ind AS 36 Impairment of Assets as a single asset by comparing its recoverable amount (higher of value in use and fair value less costs of disposal) with its carrying amount, Any impairment loss recognised forms part of the carrying amount of the investment. Any reversal of that impairment loss is recognised in accordance with Ind AS 36 to the extent that the recoverable amount of the investment subsequently increases.
We discontinue the use of the equity method from the date when the investment ceases to be an associate, or when the investment is classified as held for sale. When we retain an interest in the former associate and the retained interest is a financial asset, we measure the retained interest at fair value at that date and the fair value is regarded as its fair value on initial recognition in accordance with Ind AS 109. The difference between the carrying amount of the associate at the date the equity method was discontinued, and the fair value of any retained interest and any proceeds from disposing of a part interest in the associate is included in the determination of the gain or loss on disposal of the associate. In addition, we account for all amounts previously recognised in other comprehensive income in relation to that associate on the same basis as would be required if that associate had directly disposed of the related assets or liabilities. Therefore, if a gain or loss previously recognised in other comprehensive income by that associate would be reclassified to profit or loss on the disposal of the related assets or liabilities, we reclassify the gain or loss from equity to profit or loss (as a reclassification adjustment) when the equity method is discontinued.
Key accounting judgements and key sources of estimation uncertainty
In the application of our accounting policies, the management is required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised, if the revision affects only the period of the revision and future periods if the revision affects both current and future periods.
The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.
Fair Value Measurement of Security Receipts
Investments in SRs are measured at latest declared Net Asset Value ("NAV") which is based on recovery ratings bands as determined by the independent rating agencies.
Defined Benefit Obligations
The cost of the defined benefit plan and other post-employment benefits and the present value of such obligations are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.
Useful Lives of Property, Plant and Equipment
We review the useful life of assets at the end of each reporting period. This reassessment may result in change in depreciation expense in future periods.
Intangible Assets
We review the useful life of intangible assets at the end of each reporting period. This reassessment may result in change in amortisation expense in future periods.
Expected Credit Loss
ECL on trade receivables (including management fees receivable from SR holders) and contract asset (including funded expenses and funded interest) is based on simplified method of ECL computation as permitted under Ind AS 109.
On a prudential basis, an ECL at the rate of 0.40% is being made on outstanding NCDs.
For loans and priority debt funding, ECL is provided for on individual assessment basis.
Provisions and Contingent Liabilities
A provision is recognized when we have a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.
Revenue Recognition
Management / Trusteeship and Other Related Fees:
Management / Trusteeship and other related fees are recognised when we satisfy the performance obligation at fair value of the consideration received or receivable. We recognise such revenue from contracts with customers based on a five step model as set out in Ind AS 115:
Step 1: Identify contract(s) with a customer: A contract is defined as an agreement between two or more parties that creates enforceable rights and obligations and sets out the criteria for every contract that must be met.
Step 2: Identify performance obligations in the contract: A performance obligation is a promise in a contract with a customer to transfer a good or service to the customer.
Step 3: Determine the transaction price: The transaction price is the amount of consideration to which we expect to be entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties.
Step 4: Allocate the transaction price to the performance obligations in the contract: For a contract that has more than one performance obligation, we allocate the transaction price to each performance obligation in an amount that depicts the amount of consideration to which we expect to be entitled in exchange for satisfying each performance obligation.
Step 5: Recognise revenue when (or as) we satisfy a performance obligation Revenue is measured at the amount transaction price (net of variable consideration) allocated to that Performance obligation.
Management fee in excess of billing is recognized as unbilled management fee in our financial statements.
Accrual of management fees is based on commercial arrangement with trusts where management fees is accrued and charged as a percentage on the lower band of NAV specified by the credit rating agency or declared NAV whichever is lower. The accrual of management fee is discontinued once the NAV rating is withdrawn/ discontinued.
Dividend Income:
Dividend income is recognised when the shareholders right to receive payment has been established (provided that it is probable that the economic benefits will flow to our Company and the amount of income can be measured reliably).
Interest Income:
Interest income from interest bearing financial asset is recognised when it is probable that the economic benefits will flow to our Company and the amount of income can be measured reliably. Interest income is recognised/ estimated using the effective interest rate method. The effective interest rate which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that assets net carrying amount on initial recognition. However, recognition of interest on receivables from trusts is discontinued when NAV of SRs of the trust becomes nil. The unrecognised interest is recognised on realisation.
Net Income from Financial Instruments at FVTPL
Net income from financial instruments at FVTPL includes all realized and unrealized fair value changes and recognized in the statement of profit and loss.
Borrowing Costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.
Interest income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.
All other borrowing costs are recognised in the statement of profit and loss in the period in which they are incurred.
Employee Benefits
Retirement Benefit Costs and Termination Benefits
Defined contribution plans - Payments to defined contribution retirement benefit plans are recognised as an expense when employees have rendered service entitling them to the contributions.
Defined benefit plans - For defined retirement benefit plans, the cost of providing benefits is determined using the projected unit credit method, with actuarial valuations being carried out at the end of each annual reporting period. Remeasurement, comprising actuarial gains and losses, the effect of the changes to the asset ceiling (if applicable) and the return on plan assets (excluding interest income), is reflected immediately in the balance sheet with a charge or credit recognised in other comprehensive income in the period in which they occur. Remeasurement recognised in other comprehensive income is reflected immediately in retained earnings and is not reclassified to profit or loss. Past service cost is recognised in profit or loss in the period of a plan amendment. Net interest is calculated by applying the discount rate at the beginning of the period to the net defined benefit liability or asset. Defined benefit costs are categorised as follows: service cost (including current service cost, past service cost, as well as gains and losses on curtailments and settlements); net interest expense or income; and remeasurement.
We present the first two components of defined benefit costs in profit or loss in the line item ‘Employee benefits expense.
Curtailment gains and losses are accounted for as past service costs and the gains / loss arising on remeasurement are presented in other comprehensive income.
The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds.
Short-term and Other Long-Term Employee Benefits
A liability is recognised for benefits accruing to employees in respect of wages and salaries, annual leave and sick leave in the period the related service is rendered.
Liabilities recognised in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for the related service.
Liabilities recognised in respect of other long-term employee benefits are measured at the present value of the estimated future cash outflows expected to be made by our Company in respect of services provided by employees up to the reporting date.
Contributions From Employees or Third Parties to Defined Benefit Plans
Discretionary contributions made by employees or third parties reduce service cost upon payment of these contributions to the plan.
When the formal terms of the plans specify that there will be contributions from employees or third parties, the accounting depends on whether the contributions are linked to service, as follows:
If the contributions are not linked to services (e.g. contributions are required to reduce a deficit arising from losses on plan assets or from actuarial losses), they are reflected in the remeasurement of the net defined benefit liability (asset).
If contributions are linked to services, they reduce service costs. For the amount of contribution that is dependent on the number of years of service, we reduce service cost by attributing the contributions to periods of service using the attribution method required by Ind AS 19.70 for the gross benefits. For the amount of contribution that is independent of the number of years of service, we reduce service cost in the period in which the related service is rendered / reduces service cost by attributing contributions to the employees periods of service in accordance with Ind AS 19.70.
Taxation
Income tax expense represents the sum of the current tax and deferred tax.
Current Tax
The current tax payable is based on taxable profit for the year. Taxable profit differs from ‘profit before tax as reported in the statement of profit and loss because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. Our current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.
Deferred Tax
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deferred tax asset will be utilised.
Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.
The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which we expect, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.
Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current income tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.
Minimum Alternate Tax ("MAT") paid in accordance with the tax laws, is considered as deferred tax in the Balance Sheet when the assets can be measured reliably and it is probable that the future economic benefit associated with it will be realized.
Current and Deferred Tax for the Year
Current and deferred tax are recognised in profit or loss, except when they relate to items that are recognised in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognised in other comprehensive income or directly in equity respectively.
Property, plant and equipment ("PPE")
The cost of an item of property, plant and equipment is recognised if it is probable that future economic benefits associated with the item will flow to our Company and the cost thereof can be measured reliably. All property, plant and equipment are initially recognised at cost. Cost comprises the purchase price and any directly attributable cost to bring the asset to its working condition for its intended use.
Depreciation is recognised so as to write off the cost of assets less their residual values over their useful lives, using the straight-line method. The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis. Assets purchased during the year are depreciated on the basis of actual number of days the asset has been put to use in the year. Assets individually costing 5,000 or less are fully depreciated in the year of purchase.
Estimated useful life of assets is as below:
| Category of PPE | Estimated Useful life |
| Office Building | 60 years or over the lease period whichever is lower |
| Leasehold improvements | 60 years or over the lease period whichever is lower |
| Furniture and Fixtures | 6.67 years |
| Office Equipment | 5 years |
| Computers | 3 years |
| Vehicles | 5 years |
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or sale of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in profit or loss.
Intangible Assets
Intangible Assets Acquired Separately
Intangible assets with finite useful lives that are acquired separately are carried at cost less accumulated amortisation and accumulated impairment losses. Amortisation is recognised on a straight-line basis over their estimated useful lives. The estimated useful life and amortisation method are reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for on a prospective basis. Intangible assets with indefinite useful lives that are acquired separately are carried at cost less accumulated impairment losses. Estimated useful life of software is 4 years.
Derecognition of Intangible Assets
An intangible asset is derecognised on disposal, or when no future economic benefits are expected from use or disposal. Gains or losses arising from derecognition of an intangible asset, measured as the difference between the net disposal proceeds and the carrying amount of the asset, and are recognised in the statement of profit and loss when the asset is derecognised.
Investment in Subsidiary and Associates
Trusts are special purpose vehicles formed under SARFAESI and RBI guidelines which are managed by our Company in our capacity as a trustee.
Control is defined to mean where an entity has power over the investee, existing rights that give it the current ability to direct the relevant activities and it also has exposure to variable returns from the trusts.
For trusts where our outstanding investment in security receipts are more than 25%, have been considered as subsidiaries. For trusts where our outstanding investment in SRs are between 20% to 25%, have been considered as associates.
Investment in subsidiaries and associates are measured in accordance with Ind AS 109 in the standalone financial statements.
Provisions, Contingent Liabilities and Contingent Assets
Provisions are recognised when we have a present obligation (legal or constructive) as a result of a past event, it is probable that we will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when the effect of the time value of money is material).
A contingent liability is disclosed unless the possibility of an outflow of resources embodying the economic benefits is remote. Contingent assets are not recognized in the financial statements.
Financial Instruments
Financial assets and financial liabilities are recognised when we become a party to the contractual provisions of the instruments.
Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss. However, trade receivables that do not contain a significant financing component are measured at transaction price.
Financial Assets
All regular way purchases or sales of financial assets are recognised and derecognised on a trade date basis. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in the marketplace.
All recognised financial assets are subsequently measured in their entirety at either amortised cost or fair value, depending on the classification of the financial assets.
Classification of Financial Assets
Debt instruments that meet the following conditions are subsequently measured at amortised cost (except for debt instruments that are designated as at fair value through profit or loss on initial recognition):
the asset is held within a business model whose objective is to hold assets in order to collect contractual cash flows; and
the contractual terms of the instrument give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
Debt instruments that meet the following conditions are subsequently measured at fair value through other comprehensive income (except for debt instruments that are designated as at fair value through profit or loss on initial recognition):
the asset is held within a business model whose objective is achieved both by collecting contractual cash flows and selling financial assets; and
the contractual terms of the instrument give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
Interest income is recognised in OCI for designated FVTOCI debt instruments. When the investment is disposed of, the cumulative gain or loss previously accumulated in this reserve is reclassified to profit or loss.
All other debt instruments are subsequently measured at fair value through profit and loss. The financial assets contains management fees and expenses recoverable from trusts.
Effective Interest Method
The effective interest method is a method of calculating the amortised cost of a debt instrument which are at amortised cost and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the debt instrument, or, where appropriate, a shorter period, to the net carrying amount on initial recognition.
Income is recognised on an effective interest basis for debt instruments other than those financial assets classified as at FVTPL.
Interest income is recognised in profit or loss and is included in the "Other income" line item.
Investments in Equity Instruments at FVTOCI
On initial recognition, we can make an irrevocable election (on an instrument-by-instrument basis) to present the subsequent changes in fair value in other comprehensive income pertaining to investments in equity instruments. This election is not permitted if the equity investment is held for trading. These elected investments are initially measured at fair value plus transaction costs. Subsequently, they are measured at fair value with gains and losses arising from changes in fair value recognised in other comprehensive income and accumulated in the ‘Reserve for equity instruments through other comprehensive income. The cumulative gain or loss is not reclassified to profit or loss on disposal of the investments.
Equity Investments at Fair Value through Profit or Loss ("FVTPL")
Investments in equity instruments are classified as at FVTPL, unless we irrevocably elect on initial recognition to present subsequent changes in fair value in other comprehensive income for investments in equity instruments which are not held for trading.
Financial assets at FVTPL are measured at fair value at the end of each reporting period, with any gains or losses arising on remeasurement recognised in profit or loss.
Dividends on investments in equity instruments are recognised as ‘other income when our right to receive the dividends is established.
Investment in Security Receipts at Fair Value through Profit or Loss
Investments in security receipts are classified as at FVTPL. Investment in Security receipts at FVTPL are measured at fair value at the end of each reporting period, with any gains or losses arising on remeasurement recognised in profit or loss. In respect of security receipts, the last declared NAV is considered as fair value. For cases which fall under planning period as defined by the RBI guidelines for SC/RC, cost of security receipts are considered as fair value which is normally the transaction cost. The initial rating is assigned within six months from the date of acquisition of assets. Thereafter, ratings are reviewed at half yearly intervals i.e as on June 30 and December 31 every year. However, the NAV has been reviewed on a continuous basis so that any material change in valuation of SRs is recognized immediately. The SC/RC are required to declare NAV within two months from the date of half yearly review i.e., by August 31 which is used for September and December reporting and February 28 which is used for March and June reporting.
Security Receipts and Acquired Financial Asset at Fair Value through Profit or Loss
Security receipts ("SRs") and acquired financial assets are classified as at FVTPL. They are measured at fair value at the end of each reporting period, with any gains or losses arising on remeasurement recognised in Revenue account. In respect of Security Receipts, the last declared NAV is considered as fair value. For cases which fall under planning period as defined by the RBI guidelines for SC/RC, cost of security receipts are considered as fair value. The initial rating is assigned within six months from the date of acquisition of assets. Thereafter, ratings are reviewed at half yearly intervals i.e as on June 30 and December 31 every year. However, the NAV has been reviewed on a continuous basis so that any material change in valuation of SRs is recognized immediately. The SC/RC are required to declare NAV within two months from the date of half yearly review i.e. by August 31 which is used for September and December reporting and February 28 which is used for March and June reporting.
Impairment of Financial Assets
We apply the expected credit loss model for recognising impairment loss on financial assets measured at amortised cost, debt instruments at FVTOCI and other contractual rights to receive cash or other financial assets.
Expected credit losses are the weighted average of credit losses with the respective risks of default occurring as the weights. Credit loss is the difference between all contractual cash flows that are due to our Company in accordance with the contract and all the cash flows that we expect to receive (i.e. all cash shortfalls), discounted at the original effective interest rate (or credit-adjusted effective interest rate for purchased or originated credit-impaired financial assets). We estimate cash flows by considering all contractual terms of the financial instrument (for example, prepayment, extension, call and similar options) through the expected life of that financial instrument.
ECL on trade receivables (including Management fees receivable from SR holders) and Contract Asset (including funded expenses and funded interest) is based on simplified method of ECL computation as permitted under Ind AS 109.
On a prudential basis, an ECL at the rate of 0.40% is being made on outstanding NCDs.
For Loans and priority debt funding, ECL is provided for on individual assessment basis.
Derecognition of Financial Assets
We derecognise a financial asset when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party.
On derecognition of a financial asset in its entirety, the difference between the assets carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss that had been recognised in other comprehensive income and accumulated in equity is recognised in profit or loss, other than on sale of equity instruments designated at FVTOCI.
Write Off
Security Receipts
Outstanding investments in security receipts are written off if there is no realistic prospect of recovery from such trusts on expiry of maximum resolution period or on closure of the concerned trust; whichever is earlier. Any subsequent recoveries made are recognised in profit or loss.
Management Fees and Other Recoverable from Trust
Management fees and other recoverable from trust are written off if there is no realistic prospect of recovery from such trusts on expiry of maximum resolution period or on closure of the concerned trust; whichever is earlier. Any subsequent recoveries made are recognised in the statement of profit and loss.
Loans
Loan and debt securities will be written off when they remain overdue continuously for a period more than 3 years and there is no reasonable expectation of recovery from such financial assets. Any subsequent recoveries towards the same will be credited in the statement of profit and loss.
Financial Liabilities and Equity Instruments
Classification as Debt or Equity
Debt and equity instruments issued by our Company are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.
Equity Instruments
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by our Company are recognised at the proceeds received, net of direct issue costs.
Financial Liabilities
All financial liabilities are initially measured at fair value, net of transaction costs and are subsequently measured at amortised cost using the effective interest method or at FVTPL when the financial liability is held for trading.
A financial liability is classified as held for trading if:
it has been incurred principally for the purpose of repurchasing it in the near term; or
on initial recognition it is part of a portfolio of identified financial instruments that we manage together and has a recent actual pattern of short-term profit-taking; or
it is a derivative that is not designated and effective as a hedging instrument.
The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial liability, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.
Derecognition of Financial Liabilities
We derecognise financial liabilities when, and only when, our obligations are discharged, cancelled or have expired. The difference between the carrying amount of the financial liability derecognised and the consideration paid and payable is recognised in profit or loss.
Offsetting of Financial Assets and Financial Liabilities
The financial assets and financial liabilities are offset and the net amount is reported in the balance sheet when:
we currently have a legally enforceable right to offset the amounts; and
it intends either to settle them on a net basis or to realise the asset and settle the liability simultaneously.
The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of our Company or the counterparty.
Earnings per equity share
Basic earnings per equity share is computed by dividing the net profit attributable to the equity holders of the Group by the weighted average number of equity shares outstanding during the year.
Diluted earnings per equity share is computed by dividing the net profit attributable to the equity holders of the Group by the weighted average number of equity shares considered for deriving basic earnings per equity share and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares.
Statement of Cash Flows
The statement of cash flows shows the changes in cash and cash equivalents arising during the year from operating activities, investing activities and financing activities.
The cash flows from operating activities are determined by using the indirect method. Net income is therefore adjusted by non-cash items, such as measurement gains or losses, changes in provisions, impairment of property, plant and equipment and intangible assets, as well as changes from receivables and liabilities. In addition, all income and expenses from cash transactions that are attributable to investing or financing activities are eliminated.
The cash flows from investing and financing activities are determined by using the indirect method.
Foreign Currency Transactions
Foreign currency transactions are recorded at the rate prevailing on the date of transaction. Foreign currency monetary items outstanding as at the Balance Sheet date are restated at the closing rate of exchange. The resulting exchange gain/loss is reflected in the Statement of Profit and Loss.
Leases
We evaluate if an arrangement qualifies to be a lease as per the requirements of Ind AS 116. Identification of a lease requires significant judgment. We use significant judgement in assessing the lease term (including anticipated renewals) and the applicable discount rate.
We determine the lease term as the non-cancellable period of a lease, together with both periods covered by an option to extend the lease if we are reasonably certain to exercise that option; and periods covered by an option to terminate the lease if we are reasonably certain not to exercise that option. In assessing whether we are reasonably certain to exercise an option to extend a lease, or not to exercise an option to terminate a lease, we consider all relevant facts and circumstances that create an economic incentive for us to exercise the option to extend the lease, or not to exercise the option to terminate the lease. We revise the lease term if there is a change in the non-cancellable period of a lease.
The discount rate is generally based on the incremental borrowing rate specific to the lease being evaluated or for a portfolio of leases with similar characteristics.
Impairment of Non-Financial Assets
Assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the assets carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an assets fair value less cost of disposal and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets (cash-generating units).
Cash and Cash Equivalents
Cash and cash equivalents in the balance sheet comprise cash at bank and in hand and short-term investments with an original maturity of three months or less which are subject to an insignificant risk of changes in value. For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and short-term deposits, as defined above, net of outstanding bank overdrafts as they are considered an integral part of our cash management.
Expenses on Behalf of the Trusts
Pre-Acquisition Expenses
Expenses incurred at pre-acquisition stage are recognised as expenses for the period in which such costs are incurred.
Post-Acquisition Expenses
Expenses incurred after acquisition of assets on the formation of the trusts like stamp duty and registration charges which are recoverable from the trusts, are written off, if these expenses are not realised within 180 days from the planning period or downgrading of SRs (i.e. NAV is less than 50% of the face value of SRs) whichever is earlier. Any subsequent recoveries made are recognised in profit or loss.
SUMMARY OF MATERIAL ACCOUNTING POLCIES (RESTATED STANDALONE FINANCIAL INFORMATION)
Basis of preparation and presentation
The restated financial information of the company comprising of restated standalone balance sheet of the Company as on March 31, 2025, March 31, 2024, March 31, 2023 restated standalone statement of profit and loss (including other comprehensive income), restated standalone statement of changes in equity and restated standalone statement of cashflow of the Company for the year ended March 31, 2025, March 31, 2024, March 31, 2023 and the summary of material accounting policy and explanatory information (collectively "Restated Financial Information"). The Restated Financial Information is prepared by the Company for the purpose of inclusion in the DRHP prepared by the Company in connection with the Issue.
The Restated Financial Information has been prepared by the company in terms of requirement of
a) the sub-section(1) of section 26 of Part I of Chapter III of the Companies Act, 2013, and rules made thereunder as amended.
b) The SEBI ICDR Regulations.
c) The guidance note on reports in company prospectus (Revised 2019) issued by The Institute of Chartered Accountants of India (ICAI) as amended (the "Guidance note)).
The Restated Financial Information has been prepared on accrual and going concern basis. The accounting policies are applied consistently to all the periods presented in the Restated Financial Information. The Restated Financial Information are presented in INR, the functional currency of the Company and all values are rounded to the nearest million (INR 000,000), except as otherwise indicated.
The Restated Financial Information has been prepared on the historical cost basis except for certain financial instruments that are measured at fair values at the end of each reporting period, as explained in the accounting policies below.
The financial results have been prepared in accordance with the recognition and measurement principles laid down in Indian Accounting Standards, notified under Section 133 of the Companies Act, 2013 read with Companies (Indian Accounting Standards) Rules 2015, as amended from time to time, and other accounting principles generally accepted in India.
Historical cost is generally based on actual consideration given in exchange for goods and services. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Company takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date. Fair value for measurement and/ or disclosure purposes in these Restated Financial Information is determined on this basis.
Fair value measurements are categorised into Level 1, 2, or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety.
Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company can access at the measurement date;
Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and
Level 3 inputs are unobservable inputs for the asset or liability.
Application of new and revised Ind AS
Standard issued and effective:
All the Ind AS issued and notified by the Ministry of Corporate Affairs under the Companies (Indian Accounting Standards) Rules, 2015 (as amended) till the financial statements are authorised for issue have been considered in preparing these financial statements.
Key accounting judgements and key sources of estimation uncertainty
In the application of the Companys accounting policies, the management is required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised, if the revision affects only the period of the revision and future periods if the revision affects both current and future periods.
The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.
Fair value measurement of Security Receipts
Investments in SRs are measured at latest declared NAV which is based on recovery ratings bands as determined by the independent rating agencies.
Defined benefit obligations
The cost of the defined benefit plan and other post-employment benefits and the present value of such obligations are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.
Useful Lives of Property, Plant and Equipment
The Company reviews the useful life of assets at the end of each reporting period. This reassessment may result in change in depreciation expense in future periods.
Intangible Assets
The Company reviews the useful life of intangible assets at the end of each reporting period. This reassessment may result in change in amortisation expense in future periods.
Expected Credit Loss
ECL on Trade Receivables (including Management fees receivable from SR holders) and Contract asset (including funded expenses and funded interest) is based on simplified method of ECL computation as permitted under Ind AS 109.
On a prudential basis, an ECL @ 0.40% is being made on outstanding NCDs.
For Loans and priority debt funding, ECL is provided for on individual assessment basis.
Provisions and Contingent Liabilities
A provision is recognized when the Company has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.
Revenue recognition
Management / Trusteeship and other related fees:
Management / Trusteeship and other related fees are recognised when the company satisfies the performance obligation. The Company recognises such revenue from contracts with customers based on a five step model as set out in Ind AS 115:
Step 1: Identify contract(s) with a customer: A contract is defined as an agreement between two or more parties that creates enforceable rights and obligations and sets out the criteria for every contract that must be met.
Step 2: Identify performance obligations in the contract: A performance obligation is a promise in a contract with a customer to transfer a good or service to the customer.
Step 3: Determine the transaction price: The transaction price is the amount of consideration to which the Company expects to be entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties.
Step 4: Allocate the transaction price to the performance obligations in the contract: For a contract that has more than one performance obligation, the Company allocates the transaction price to each performance obligation in an amount that depicts the amount of consideration to which the Company expects to be entitled in exchange for satisfying each performance obligation.
Step 5: Recognise revenue when (or as) the Company satisfies a performance obligation
Revenue is measured at the amount transaction price (net of variable consideration) allocated to that performance obligation.
Management fee in excess of billing is recognized as unbilled Management fee in the financial statement.
Accrual of management fees is based on commercial arrangement with trusts where Management Fees is accrued and charged as a percentage on the lower band of NAV specified by Credit Rating Agency or declared NAV whichever is lower. The accrual of management fee is discontinued once the NAV rating is withdrawn/ discontinued.
Dividend Income:
Dividend income is recognised when the shareholders right to receive payment has been established (provided that it is probable that the economic benefits will flow to the company and the amount of income can be measured reliably).
Interest Income:
Interest income from interest bearing financial asset is recognised when it is probable that the economic benefits will flow to the Company and the amount of income can be measured reliably. Interest income is recognised/ estimated using the effective interest rate method. The effective interest rate which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that assets net carrying amount on initial recognition. However, recognition of interest on receivables from Trusts is discontinued when NAV of Security receipts of the Trust becomes Nil. The unrecognised interest is recognised on realisation.
Net income from financial instruments at FVTPL
Net income from financial instruments at FVTPL includes all realized and unrealized fair value changes and recognized in the Statement of Profit and Loss.
Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.
Interest income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.
All other borrowing costs are recognised in the Statement of profit or loss in the period in which they are incurred.
Employee benefits
Retirement benefit costs and termination benefits
Defined contribution plans - Payments to defined contribution retirement benefit plans are recognised as an expense when employees have rendered service entitling them to the contributions.
Defined benefit plans - For defined retirement benefit plans, the cost of providing benefits is determined using the projected unit credit method, with actuarial valuations being carried out at the end of each annual reporting period. Remeasurement, comprising actuarial gains and losses, the effect of the changes to the asset ceiling (if applicable) and the return on plan assets (excluding interest income), is reflected immediately in the balance sheet with a charge or credit recognised in other comprehensive income in the period in which they occur. Remeasurement recognised in other comprehensive income is reflected immediately in retained earnings and is not reclassified to profit or loss. Past service cost is recognised in profit or loss in the period of a plan amendment. Net interest is calculated by applying the discount rate at the beginning of the period to the net defined benefit liability or asset. Defined benefit costs are categorised as follows:
service cost (including current service cost, past service cost, as well as gains and losses on curtailments and settlements);
net interest expense or income; and remeasurement
The Company presents the first two components of defined benefit costs in profit or loss in the line item ‘Employee benefits expense. Curtailment gains and losses are accounted for as past service costs and the Gains / loss arising on remeasurement are presented in Other Comprehensive Income
The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds.
Short-term and other long-term employee benefits
A liability is recognised for benefits accruing to employees in respect of wages and salaries, annual leave and sick leave in the period the related service is rendered.
Liabilities recognised in respect of other long-term employee benefits are measured at the present value of the estimated future cash outflows expected to be made by the Company in respect of services provided by employees up to the reporting date.
Contributions from employees or third parties to defined benefit plans
Discretionary contributions made by employees or third parties reduce service cost upon payment of these contributions to the plan.
When the formal terms of the plans specify that there will be contributions from employees or third parties, the accounting depends on whether the contributions are linked to service, as follows:
If the contributions are not linked to services (e.g. contributions are required to reduce a deficit arising from losses on plan assets or from actuarial losses), they are reflected in the remeasurement of the net defined benefit liability (asset).
If contributions are linked to services, they reduce service costs. For the amount of contribution that is dependent on the number of years of service, the Company reduces service cost by attributing the contributions to periods of service using the attribution method required by Ind AS 19.70 for the gross benefits. For the amount of contribution that is independent of the number of years of service, the Company reduces service cost in the period in which the related service is rendered / reduces service cost by attributing contributions to the employees periods of service in accordance with Ind AS 19.70.
Taxation
Income tax expense represents the sum of the current tax and deferred tax.
Current tax
The current tax is based on taxable profit for the year. Taxable profit differs from ‘profit before tax as reported in the statement of profit and loss because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The Companys current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.
Deferred tax
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those Deferred Tax Asset will be utilised.
Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.
The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.
Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current income tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.
Minimum Alternate Tax (MAT) paid in accordance with the tax laws, is considered as deferred tax in the Balance Sheet when the assets can be measured reliably and it is probable that the future economic benefit associated with it will be realized.
Current and deferred tax for the year
Current and deferred tax are recognised in profit or loss, except when they relate to items that are recognised in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognised in other comprehensive income or directly in equity respectively.
Property, plant and equipment (PPE)
The cost of an item of property, plant and equipment is recognised if it is probable that future economic benefits associated with the item will flow to the company and the cost thereof can be measured reliably. All property, plant and equipment are initially recognised at cost. Cost comprises the purchase price and any directly attributable cost to bring the asset to its working condition for its intended use.
Depreciation is recognised so as to write off the cost of assets less their residual values over their useful lives, using the straight-line method. The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis. Assets purchased during the year are depreciated on the basis of actual number of days the asset has been put to use in the year. Assets individually costing Rs. 5,000/- or less are fully depreciated in the year of purchase.
Estimated Useful life of Assets is as Below:
| Category of PPE | Estimated Useful life |
| Office Building | 60 years or over the lease period whichever is lower |
| Leasehold improvements | 60 years or over the lease period whichever is lower |
| Furniture & Fixtures | 6.67 years |
| Office Equipment | 5 years |
| Computers | 3 years |
| Vehicles | 5 years |
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or sale of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in profit or loss.
Intangible assets
Intangible assets acquired separately
Intangible assets with finite useful lives that are acquired separately are carried at cost less accumulated amortisation and accumulated impairment losses. Amortisation is recognised on a straight-line basis over their estimated useful lives. The estimated useful life and amortisation method are reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for on a prospective basis. Intangible assets with indefinite useful lives that are acquired separately are carried at cost less accumulated impairment losses.
Estimated useful life of software is 4 years.
Derecognition of intangible assets
An intangible asset is derecognised on disposal, or when no future economic benefits are expected from use or disposal. Gains or losses arising from derecognition of an intangible asset, measured as the difference between the net disposal proceeds and the carrying amount of the asset, and are recognised in statement of profit or loss when the asset is derecognised.
Investment in Subsidiary and Associates
Trusts are special purpose vehicles formed under SARFAESI and RBI guidelines which are managed by the Company in its capacity as a Trustee.
Control is defined to mean where an entity has power over the investee, existing rights that give it the current ability to direct the relevant activities and it also has exposure to variable returns from the Trusts.
For Trusts where the Companys outstanding Investment in Security Receipts are more than 25%, have been considered as subsidiaries. For Trusts where the Companys outstanding Investment in Security Receipts are between 20% to 25%, have been considered as Associates.
Investment in subsidiaries and associates are measured in accordance with Ind AS 109 in Standalone Financial Statements.
Provisions, Contingent Liabilities and Contingent Assets
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that the Company will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when the effect of the time value of money is material).
A Contingent Liability is disclosed unless the possibility of an outflow of resources embodying the economic benefits is remote. Contingent assets are not recognized in the financial statements. .
Financial instruments
Financial assets and financial liabilities are recognised when Company becomes a party to the contractual provisions of the instruments.
Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss. However, trade receivables that do not contain a significant financing component are measured at transaction price.
Financial assets
All regular way purchases or sales of financial assets are recognised and derecognised on a trade date basis. Regular way purchases or sales, are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in the marketplace.
All recognised financial assets are subsequently measured in their entirety at either amortised cost or fair value, depending on the classification of the financial assets.
Classification of financial assets
Debt instruments that meet the following conditions are subsequently measured at amortised cost (except for debt instruments that are designated as at fair value through profit or loss on initial recognition):
- the asset is held within a business model whose objective is to hold assets in order to collect contractual cash flows; and
-the contractual terms of the instrument give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
Debt instruments that meet the following conditions are subsequently measured at fair value through other comprehensive income (except for debt instruments that are designated as at fair value through profit or loss on initial recognition):
-the asset is held within a business model whose objective is achieved both by collecting contractual cash flows and selling financial assets; and
- the contractual terms of the instrument give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
Interest income is recognised in OCI for designated FVTOCI debt instruments. When the investment is disposed of, the cumulative gain or loss previously accumulated in this reserve is reclassified to profit or loss.
All other debt instruments are subsequently measured at fair value through profit and loss. The Financial assets contain Management fees and expenses recoverable from Trusts. (a) Effective interest method
The effective interest method is a method of calculating the amortised cost of a debt instrument which are at amortised cost and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts (including all fees paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the debt instrument, or, where appropriate, a shorter period, to the net carrying amount on initial recognition.
Income is recognised on an effective interest basis for debt instruments other than those financial assets classified as at FVTPL.
Interest income is recognised in profit or loss and is included in the "Other income" line item.
Investments in equity instruments at FVTOCI
On initial recognition, the Company can make an irrevocable election (on an instrument-by-instrument basis) to present the subsequent changes in fair value in other comprehensive income pertaining to investments in equity instruments. This election is not permitted if the equity investment is held for trading. These elected investments are initially measured at fair value plus transaction costs. Subsequently, they are measured at fair value with gains and losses arising from changes in fair value recognised in other comprehensive income and accumulated in the ‘Reserve for equity instruments through other comprehensive income. The cumulative gain or loss is not reclassified to profit or loss on disposal of the investments.
Equity investments at fair value through profit or loss (FVTPL)
Investments in equity instruments are classified as at FVTPL, unless the Company irrevocably elects on initial recognition to present subsequent changes in fair value in other comprehensive income for investments in equity instruments which are not held for trading.
Financial assets at FVTPL are measured at fair value at the end of each reporting period, with any gains or losses arising on remeasurement recognised in profit or loss.
Dividends on investments in equity instruments are recognised as ‘other income when the Companys right to receive the dividends is established.
Investment in Security receipts at fair value through profit or loss (FVTPL)
Investments in Security receipts are classified as at FVTPL. Investment in Security receipts at FVTPL are measured at fair value at the end of each reporting period, with any gains or losses arising on remeasurement recognised in profit or loss. In respect of Security Receipts, the last declared NAV which is based on rating / grading reviewed by an approved Credit Rating agencies are considered as fair value. For cases which fall under planning period as defined by the RBI guidelines for SC/RC, cost of Security Receipts are considered as fair value which is normally the transaction cost. The initial rating is assigned within six months from the date of acquisition of assets. Thereafter, ratings are reviewed at six monthly intervals i.e as on 30th June and 31st December every year. However, the NAV has been reviewed on a continuous basis so that any material change in valuation of SRs is recognized immediately.
Impairment of financial assets
The Company applies the expected credit loss model for recognising impairment loss on financial assets measured at amortised cost, debt instruments at FVTOCI and other contractual rights to receive cash or other financial assets.
Expected credit losses are the weighted average of credit losses with the respective risks of default occurring as the weights. Credit loss is the difference between all contractual cash flows that are due to the Company in accordance with the contract and all the cash flows that the Company expects to receive (i.e. all cash shortfalls), discounted at the original effective interest rate (or credit-adjusted effective interest rate for purchased or originated credit-impaired financial assets). The Company estimates cash flows by considering all contractual terms of the financial instrument (for example, prepayment, extension, call and similar options) through the expected life of that financial instrument.
ECL on Trade Receivables (including Management fees receivable from SR holders) and Contract asset (including funded expenses and funded interest) is based on simplified method of ECL computation as permitted under Ind AS 109.
On a prudential basis, an ECL @ 0.40% is being made on outstanding NCDs.
For Loans and priority debt funding, ECL is provided for on individual assessment basis.
Derecognition of financial assets
The Company derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party.
On derecognition of a financial asset in its entirety, the difference between the assets carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss that had been recognised in other comprehensive income and accumulated in equity is recognised in profit or loss, other than on sale of equity instruments designated at FVTOCI.
Write Off
a) Security Receipts
Outstanding Investments in Security Receipts are written off if there is no realistic prospect of recovery from such trusts on expiry of maximum resolution period or on closure of the concerned trust; whichever is earlier. Any subsequent recoveries made are recognised in profit or loss.
b) Management Fees and Other recoverable from Trust
Management Fees and Other recoverable from trust are written off if there is no realistic prospect of recovery from such trusts on expiry of maximum resolution period or on closure of the concerned trust; whichever is earlier. Any subsequent recoveries made are recognised in the Statement of profit or loss.
c) Loans
Loan and Debt securities will be written off when they remain overdue continuously for a period more than 3 years and there is no reasonable expectation of recovery from such financial assets. Any subsequent recoveries towards the same will be credited in statement of profit and loss.
Financial liabilities and equity instruments
Classification as debt or equity
Debt and equity instruments issued by Company are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.
Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by Company are recognised at the proceeds received, net of direct issue costs.
Financial liabilities
All financial liabilities are initially measured at fair value, net of transaction costs and are subsequently measured at amortised cost using the effective interest method or at FVTPL when the financial liability is held for trading.
A financial liability is classified as held for trading if:
it has been incurred principally for the purpose of repurchasing it in the near term; or
on initial recognition it is part of a portfolio of identified financial instruments that the Company manages together and has a recent actual pattern of short-term profit-taking; or
it is a derivative that is not designated and effective as a hedging instrument.
The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments (including all fees paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial liability, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.
Derecognition of financial liabilities
The Company derecognises financial liabilities when, and only when, the Companys obligations are discharged, cancelled or have expired. The difference between the carrying amount of the financial liability derecognised and the consideration paid and payable is recognised in profit or loss.
Offsetting of Financial Assets and Financial Liabilities:
The financial assets and financial liabilities are offset and the net amount is reported in the balance sheet when:
the Company currently has a legally enforceable right to offset the amounts; and
it intends either to settle them on a net basis or to realise the asset and settle the liability simultaneously.
The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the company or the counterparty
Earnings per equity share
Basic earnings per equity share is computed by dividing the net profit attributable to the equity holders of the Company by the weighted average number of equity shares outstanding during the year.
Diluted earnings per equity share is computed by dividing the net profit attributable to the equity holders of the company by the weighted average number of equity shares considered for deriving basic earnings per equity share and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares.
Statement of Cash Flows
The statement of cash flows shows the changes in cash and cash equivalents arising during the year from operating activities, investing activities and financing activities
The cash flows from operating activities are determined by using the indirect method. Net income is therefore adjusted by non-cash items, such as measurement gains or losses, changes in provisions, impairment of property, plant and equipment and intangible assets, as well as changes from receivables and liabilities. In addition, all income and expenses from cash transactions that are attributable to investing or financing activities are eliminated.
The cash flows from investing and financing activities are determined by using the indirect method.
Foreign Currency Transactions
Foreign currency transactions are recorded at the rate prevailing on the date of transaction. Foreign currency monetary items outstanding as at the Balance Sheet date are restated at the closing rate of exchange. The resulting exchange gain/loss is reflected in the Statement of Profit and Loss.
Leases
The Company evaluates if an arrangement qualifies to be a lease as per the requirements of Ind AS 116. The Company uses significant judgement in assessing the lease term (including anticipated renewals) and the applicable discount rate.
The Company determines the lease term as the non-cancellable period of a lease, together with both periods covered by an option to extend the lease if the Company is reasonably certain to exercise that option; and periods covered by an option to terminate the lease if the Company is reasonably certain not to exercise that option. In assessing whether the Company is reasonably certain to exercise an option to extend a lease, or not to exercise an option to terminate a lease, it considers all relevant facts and circumstances that create an economic incentive for the Company to exercise the option to extend the lease, or not to exercise the option to terminate the lease. The Company revises the lease term if there is a change in the non-cancellable period of a lease.
The discount rate is generally based on the incremental borrowing rate specific to the lease being evaluated or for a portfolio of leases with similar characteristics.
Impairment of non-financial assets
Assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the assets carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an assets fair value less cost of disposal and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets (cash-generating units).
Cash and Cash Equivalents
Cash and cash equivalents in the balance sheet comprise cash at bank and in hand and short-term investments with an original maturity of three months or less which are subject to an insignificant risk of changes in value. For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and short-term deposits, as defined above, net of outstanding bank overdrafts as they are considered an integral part of the Companys cash management.
Expenses on behalf of the trusts
Pre- Acquisition expenses
Expenses incurred at pre-acquisition stage are recognised as expenses for the period in which such costs are incurred.
Post- Acquisition expenses
Expenses incurred after acquisition of assets on the formation of the trusts like stamp duty and registration charges which are recoverable from the trusts, are written off, if these expenses are not realised within 180 days from the planning period or downgrading of SRs i.e. Net Asset Value (NAV) is less than 50% of the face value of SRs whichever is earlier. Any subsequent recoveries made are recognised in profit or loss.
CHANGES IN ACCOUNTING POLICIES
There have been no changes in our accounting policies during Fiscals 2025, 2024 and 2023.
PRINCIPAL COMPONENTS OF INCOME AND EXPENDITURE
Income
Our total income comprises our revenue from operations and other income.
Revenue from operations
Our revenue from operations comprises (i) fees and other income; (ii) other operating income; (iii) recovery of security receipts, unrealized fee and expenses (written off earlier); (iv) interest income; and (v) net gain on fair value changes unrealised.
Other income
Other income comprises (i) net gain/ (loss) on derecognition of property, plant and equipment; and (ii) others.
Expenses
Our expenses comprise: (i) finance costs; (ii) impairment of financial instruments/ financial assets; (iii) employee benefits expenses; (iv) depreciation, amortization and impairment; (v) write off of security receipts, unrealized fee and expenses; (vi) other expenses; and (vii) net loss on fair value changes - unrealised.
Finance costs
Finance cost comprise financial liabilities measured at amortised cost (i) interest on borrowings; and (ii) others.
Impairment of financial instruments/ financial assets
Impairment of financial instruments/ financial assets comprise impairment on financial assets at amortised cost (i) fees and expenses; and (ii) others.
Employee benefit expenses
Employee benefit expenses comprise (i) salaries and wages; (ii) contribution to provident and other funds; and (iii) staff welfare expenses.
Depreciation, amortization and impairment
Depreciation, amortization and impairment comprise (i) depreciation of tangible assets; (ii) amortization of intangible assets; and (iii) depreciation on right to use leasehold assets.
Write off of security receipts, unrealized fee and expenses
Write off of security receipts, unrealized fee and expenses comprise (i) unrealised management fees written off; (ii) unbilled management fees written off; (iii) unrealised expenses recoverable from trusts; and (iv) investment in security receipts written off.
Other expenses
Other expenses primarily comprise (i) rent, taxes and energy cost, (ii) repairs and maintenance; (iii) legal expenses; (iv) professional charges; (v) travelling, boarding and lodging expenses; (vi) contribution towards corporate social responsibility; and (vii) other expenditure.
Net loss on fair value changes unrealised
Net loss on fair value changes unrealised comprises net loss on financial instruments at fair value through profit and loss account on (i) security receipts; and (ii) financial instruments designated at fair value through profit or loss.
CONSOLIDATED RESULTS OF OPERATIONS
In accordance with Ind AS 110 and our accounting policies, trusts where our outstanding investment in security receipts are more than 25%, have been considered as subsidiaries in the Restated Consolidated Financial Information. Further, trusts where our outstanding investments in security receipts is between 20%-25%, have been considered as associates in the Restated
Consolidated Financial Information. For further details, see "Risk Factors- Our Restated Consolidated Financial Information included in this Draft Red Herring Prospectus comprises the financial statements of the Company consolidated with those trusts which have been identified as subsidiaries or associates in accordance with applicable accounting policies. The assets and liabilities of these trusts are distinct from our Companys assets and liabilities and are held for the benefit of the SR holders. Hence, investors must read our Restated Consolidated Financial Information together with our Restated Standalone Financial Information" on page 48.
The following table sets forth certain information with respect to our results of operations on a consolidated basis for Fiscals 2025, 2024 and 2023:
| Particulars | Fiscal 2025 | Fiscal 2024 | Fiscal 2023 | |||
| ( million) | Percentage of Total Income (%) | ( million) | Percentage of Total Income (%) | ( million) | Percentage of Total Income (%) | |
| Revenue from operations | ||||||
| Fees and other income | 1,275.95 | 20.99% | 1,466.75 | 24.07% | 1,644.29 | 20.23% |
| Other operating income | 1,988.01 | 32.71% | 1,498.95 | 24.59% | 1,839.04 | 22.63% |
| Recovery of security receipts, unrealized fee and expenses (written off earlier) | 1,000.31 | 16.46% | 2,875.52 | 47.18% | 1,408.97 | 17.34% |
| Interest income | 206.59 | 3.40% | 217.01 | 3.56% | 352.12 | 4.33% |
| Net gain on fair value changes unrealised | 1,346.69 | 22.16% | - | - | 2,847.52 | 35.04% |
| Total revenue from operations | 5,817.55 | 95.71% | 6,058.24 | 99.40% | 8,091.94 | 99.57% |
| Other income | 260.82 | 4.29% | 36.65 | 0.60% | 34.73 | 0.43% |
| Total Income Expenses | 6,078.37 | 100.00% | 6,094.89 | 100.00% | 8,126.67 | 100.00% |
| Particulars | Fiscal 2025 | Fiscal 2024 | Fiscal 2023 | |||
| ( million) | Percentage of Total Income (%) | ( million) | Percentage of Total Income (%) | ( million) | Percentage of Total Income (%) | |
| Finance costs | 113.31 | 1.86% | 61.38 | 1.01% | 15.98 | 0.20% |
| Impairment of financial instruments/ financial assets | 28.46 | 0.47% | 19.43 | 0.32% | (233.80) | (2.88)% |
| Employee benefits expenses | 609.41 | 10.03% | 556.59 | 9.13% | 547.79 | 6.74% |
| Depreciation, amortization and impairment | 21.53 | 0.35% | 19.32 | 0.32% | 21.41 | 0.26% |
| Write off of security receipts, unrealized fee and expenses | 367.13 | 6.04% | 492.64 | 8.08% | 3,786.34 | 46.59% |
| Other expenses | 626.94 | 10.31% | 559.56 | 9.18% | 125.66 | 1.55% |
| Net loss on fair value changes unrealised | - | - | 238.55 | 3.91% | - | - |
| Total Expenses | 1,766.79 | 29.07% | 1,947.47 | 31.95% | 4,263.39 | 52.46% |
| Profit/ (loss) before tax | 4,311.58 | 70.93% | 4,147.42 | 68.05% | 3,863.28 | 47.54% |
| Tax Expense | ||||||
| Current tax | 868.88 | 14.29% | 1,113.94 | 18.28% | 357.21 | 4.40% |
| Deferred tax | 350.31 | 5.76% | (75.40) | (1.24)% | 466.67 | 5.74% |
| Tax adjustment for previous years | - | - | - | - | - | - |
| Total tax expense | 1,219.19 | 20.06% | 1,038.54 | 17.04% | 823.88 | 10.14% |
| Profit/ (loss) for the year | 3,092.39 | 50.88% | 3,108.87 | 51.01% | 3,039.40 | 37.40% |
FISCAL 2025 COMPARED TO FISCAL 2024
Total Income
Our total income decreased by 0.27% from 6,094.89 million in Fiscal 2024 to 6,078.37 million in Fiscal 2025, primarily due to a decrease in revenue from operations.
Revenue from Operations
Our revenue from operations decreased by 3.97% from 6,058.24 million in Fiscal 2024 to 5,817.55 million in Fiscal 2025, primarily on account of decreases in (i) fees and other income by 13.00% from 1,466.75 million in Fiscal 2024 to 1,275.95 million in Fiscal 2025 primarily due to a decrease in management fees/ trusteeship fees from 1,632.29 million in Fiscal 2024 to 1,117.88 million in Fiscal 2025 due to lower eligibility of management fees based on the deal structure and the available NAV band based on the ratings assigned to the SRs. The unbilled management fees increased from (376.72) million in Fiscal 2024 to (150.19) million in Fiscal 2025; and (ii) recovery of security receipts, unrealized fee and expenses (written off earlier) by 65.21% from 2,875.52 million in Fiscal 2024 to 1,000.31 million in Fiscal 2025 due to a decrease in recovery from investment in security receipts written off from 1,454.95 million in Fiscal 2024 to 144.17 million in Fiscal 2025 since during Fiscal 2024 we made higher recoveries in trusts where our outstanding investments were written off during previous years. Since most of the outstanding investments which were written off in earlier years were substantially recovered in Fiscal 2024, the recovery from investment in security receipts written off was lower in Fiscal 2025.
The overall decrease in our revenue from operations in Fiscal 2025 was partially offset by a net gain on financial instruments at fair value* through profit and loss account on security receipts of 1,346.69 million in Fiscal 2025 on account of a rating upgrade on certain stressed assets in our portfolio and higher initial ratings on certain cash investments which the trusts made during the year; and an increase in other operating income by 32.63% from 1,498.95 million in Fiscal 2024 to 1,988.01 million in Fiscal 2025 due to an increase in income from investments from 344.59 million in Fiscal 2024 to 1,100.80 million in Fiscal 2025 due to a higher recovery in certain trusts over and above the cost of acquisition and expenses.
*Note: Net gain/(loss) on fair value changes- unrealised is the net gain or loss on financial instruments at fair value through profit or loss account for investment in security receipts. Net gain is recognized as income and is clubbed with revenue from operations, while net loss is recognised as an expense and is clubbed with total expenses for the year.
Other Income
Our other income increased from 36.65 million in Fiscal 2024 to 260.82 million in Fiscal 2025, primarily due to an increase in other income - others from 36.31 million in Fiscal 2024 to 260.53 million in Fiscal 2025 on account of interest on income tax refund received for previous assessment years.
Expenses
Our total expenses decreased by 9.28% from 1,947.47 million in Fiscal 2024 to 1,766.79 million in Fiscal 2025, primarily due to a net loss on fair value changes unrealized* and a decrease in write off of security receipts, unrealized fee and expenses during Fiscal 2024.
*Note: Net gain/(loss) on fair value changes- unrealised is the net gain or loss on financial instruments at fair value through profit or loss account for investment in security receipts. Net gain is recognized as income and is clubbed with revenue from operations, while net loss is recognised as an expense and is clubbed with total expenses for the year.
Our total expenses excluding net loss on fair value changes- unrealised increased from 1,708.92 million in Fiscal 2024 to 1,766.79 million in Fiscal 2025. This is primarily due to an increase in finance cost from 61.38 million in Fiscal 2024 to
113.31 million in Fiscal 2025 on account of the Company availing term loan and higher utilization of credit limits during the year.
Finance Costs
Our finance costs increased by 84.60% from 61.38 million in Fiscal 2024 to 113.31 million in Fiscal 2025, primarily due to an increase in interest on borrowings from 60.01 million in Fiscal 2024 to 113.01 million in Fiscal 2025 due to availing of a term loan and higher utilization of credit limits by the Company during the year.
Impairment of Financial Instruments/ Financial Assets
Impairment of financial instruments/ financial assets increased by 46.47% from 19.43 million in Fiscal 2024 to 28.46 million in Fiscal 2025, primarily due to an increase in expected credit loss provisioning for outstanding fees and expenses recoverable from the trusts under management.
Employee Benefits Expenses
Our employee benefits expenses increased by 9.49% from 556.59 million in Fiscal 2024 to 609.41 million in Fiscal 2025, primarily due to an increase in salaries and wages from 517.91 million in Fiscal 2024 to 567.92 million in Fiscal 2025 due to annual increments and bonus provisioning for employees.
Depreciation, Amortization and Impairment
Our depreciation, amortization and impairment expenses increased by 11.43% from 19.32 million in Fiscal 2024 to 21.53 million in Fiscal 2025, primarily due to an increase in amortization of intangible assets from 0.90 million in Fiscal 2024 to
2.66 million in Fiscal 2025.
Write Off of Security Receipts, Unrealized Fee and Expenses
Write off of security receipts, unrealized fee and expenses decreased by 25.48% from 492.64 million in Fiscal 2024 to 367.13 million in Fiscal 2025, primarily due to a decrease in unrealized expenses recoverable from trusts from 340.92 million in Fiscal 2024 to 148.67 million in Fiscal 2025 due to a lower amount of unrealized fees and expenses recoverable from trusts which completed the maximum resolution period of eight years as on March 31, 2025 as per the RBI guidelines.
Other Expenses
Our other expenses increased by 12.04% from 559.56 million in Fiscal 2024 to 626.94 million in Fiscal 2025, primarily due to increases in (i) repairs and maintenance from 23.48 million in Fiscal 2024 to 33.93 million in Fiscal 2025 on account of general repairs undertaken at the Companys head office and its branches; (ii) legal expenses from 193.72 million in Fiscal 2024 to 210.95 million in Fiscal 2025 on account of increased due diligence; (iii) contribution towards corporate social responsibility from 26.20 million in Fiscal 2024 to 61.93 million in Fiscal 2025 since there was an increase in our profit; (iv) insurance from 0.58 million in Fiscal 2024 to 10.96 million in Fiscal 2025; and (v) travelling, boarding and lodging expenses from 15.37 million in Fiscal 2024 to 22.96 million in Fiscal 2025.
Net Loss on Fair Value Changes Unrealised
Net loss on fair value changes unrealised* was (238.55) million in Fiscal 2024 as compared to nil in Fiscal 2025 (we had a net gain on fair value changes- unrealised of 1,346.69 million in Fiscal 2025) since we had rating downgrades on certain stressed assets in our portfolio during Fiscal 2024, and due to some of the trusts nearing the eight year period during the year.
*Note: Net gain/(loss) on fair value changes- unrealised is the net gain or loss on financial instruments at fair value through profit or loss account for investment in security receipts. Net gain is recognized as income and is clubbed with revenue from operations, while net loss is recognised as an expense and is clubbed with total expenses for the year.
Profit/ (Loss) before Tax
Our profit before tax was 4,311.58 million in Fiscal 2025 as compared to the profit before tax of 4,147.42 million in Fiscal 2024.
Tax Expense
Our tax expenses increased by 17.39% from 1,038.54 million in Fiscal 2024 to 1,219.19 million in Fiscal 2025. In Fiscal 2024, we had a current tax expense of 1,113.94 million and a deferred tax credit of 75.40 million. In Fiscal 2025, we had a current tax expense of 868.88 million and a deferred tax expense of 350.31 million.
Profit/ (Loss) for the Year
For the reasons discussed above, our profit for the year was 3,092.39 million in Fiscal 2025 as compared to 3,108.87 million in Fiscal 2024.
FISCAL 2024 COMPARED TO FISCAL 2023
Total Income
Our total income decreased by 25.00% from 8,126.67 million in Fiscal 2023 to 6,094.89 million in Fiscal 2024, primarily due to a decrease in revenue from operations.
Revenue from Operations
Our revenue from operations decreased by 25.13% from 8,091.94 million in Fiscal 2023 to 6,058.24 million in Fiscal 2024, on account of decreases in (i) net gain on fair value changes unrealised* from 2.847.52 million in Fiscal 2023 to nil in Fiscal 2024 (there was a net loss on fair value changes- unrealised in Fiscal 2024 which is clubbed with total expenses for the year) due to a net gain financial instruments at fair value through profit and loss account on security receipts of 2,805.42 million in Fiscal 2023 on account of a rating upgrade on certain stressed assets in our portfolio and higher initial rating on certain cash investment trusts made during the year (ii) other operating income by 18.49% from 1,839.04 million in Fiscal 2023 to 1,498.95 million in Fiscal 2024 due to a decrease in realisation over acquisition from 1,427.52 million in Fiscal 2023 to 1,102.40 million in Fiscal 2024 on account of lower recoveries in certain trusts; and (iii) fees and other income by 10.79% from
1,644.29 million in Fiscal 2023 to 1,466.75 million in Fiscal 2024 due to a decrease in portfolio recovery fees from 403.33 million in Fiscal 2023 to 210.66 million in Fiscal 2024 on account of lower recoveries in certain portfolios where portfolio recovery fees are charged. The overall decrease in our revenue from operations in Fiscal 2024 was partially offset by an increase in recovery of security receipts, unrealized fee and expenses (written off earlier) from 1,408.97 million in Fiscal 2023 to 2,875.52 million in Fiscal 2024 due to an increase in investment in security receipts written off from 918.90 million in Fiscal 2023 to 1,454.95 million in Fiscal 2024 since we made higher recoveries in trusts where our outstanding investments were written off during previous years.
*Note: Net gain/(loss) on fair value changes- unrealised is the net gain or loss on financial instruments at fair value through profit or loss account for investment in security receipts. Net gain is recognized as income and is clubbed with revenue from operations, while net loss is recognised as an expense and is clubbed with total expenses for the year.
Other Income
Our other income increased by 5.52% from 34.73 million in Fiscal 2023 to 36.65 million in Fiscal 2024, primarily due to an increase in other income - others comprising reimbursement of expenses from trusts from 34.64 million in Fiscal 2023 to 36.31 million in Fiscal 2024.
Expenses
Our total expenses decreased by 54.32% from 4,263.39 million in Fiscal 2023 to 1,947.47 million in Fiscal 2024, primarily due to a decrease in write off of security receipts, unrealized fee and expenses on completion of maximum resolution period of eight years as per RBI guidelines.
Finance Costs
Our finance costs increased from 15.98 million in Fiscal 2023 to 61.38 million in Fiscal 2024, primarily due to an increase in interest on borrowings from 14.65 million in Fiscal 2023 to 60.01 million in Fiscal 2024 due to an increase in the outstanding amount of our borrowings during the year.
Impairment of Financial Instruments/ Financial Assets
Impairment of financial instruments/ financial assets was (233.80) million in Fiscal 2023 as compared to 19.43 million in Fiscal 2024, primarily due to fees and expenses of (106.61) million and loans of (127.19) million in Fiscal 2023 on account of reversal of expected credit loss provisions due to recovery in such trusts as compared to fees and expenses of 19.43 million in Fiscal 2024.
Employee Benefits Expenses
Our employee benefits expenses increased by 1.60% from 547.79 million in Fiscal 2023 to 556.59 million in Fiscal 2024, primarily due to an increase in salaries and wages from 513.86 million in Fiscal 2023 to 517.91 million in Fiscal 2024 due to annual increments given to employees and provision for bonus.
Depreciation, Amortization and Impairment
Our depreciation, amortization and impairment decreased by 9.76% from 21.41 million in Fiscal 2023 to 19.32 million in Fiscal 2024, primarily due to a decrease in depreciation of tangible assets from 14.44 million in Fiscal 2023 to 12.62 million in Fiscal 2024.
Write Off of Security Receipts, Unrealized Fee and Expenses
Write off of security receipts, unrealized fee and expenses decreased by 86.99% from 3,786.34 million in Fiscal 2023 to 492.64 million in Fiscal 2024, primarily due to a decrease in investment in security receipts written off from 2,491.28 million in Fiscal 2023 to 49.46 million in Fiscal 2024 since such security receipts had not redeemed within a timeframe of eight years and were required to be written-off in accordance with RBI guidelines and unbilled management fees written off from 773.52 million in Fiscal 2023 to 93.67 million in Fiscal 2024 on account of completion of maximum resolution period of eight years as per the RBI guidelines.
Other Expenses
Our other expenses increased from 125.66 million in Fiscal 2023 to 559.56 million in Fiscal 2024, primarily due to increases in (i) rent, taxes and energy cost from 33.13 million in Fiscal 2023 to 92.59 million in Fiscal 2024 on account of taxes paid; (ii) legal expenses from 92.34 million in Fiscal 2023 to 193.72 million in Fiscal 2024 on account of increased due diligence; (iii) contribution towards corporate social responsibility from 4.87 million in Fiscal 2023 to 26.20 million in Fiscal 2024 since there was an increase in our profit; (iv) professional charges from 62.10 million in Fiscal 2023 to 95.73 million in Fiscal 2024; and other expenditure from (132.37) million in Fiscal 2023 to 76.20 million in Fiscal 2024 on account of reversal of certain provisions in Fiscal 2023.
Net Loss on Fair Value Changes Unrealised
Net loss on fair value changes unrealised was nil in Fiscal 2023 (there was a gain on fair value changes- unrealised in Fiscal 2023 of 2,847.52 million) as compared to 238.55 million in Fiscal 2024, since we had rating downgrades on certain stressed assets in our portfolio during Fiscal 2024.
*Note: Net gain/(loss) on fair value changes- unrealised is the net gain or loss on financial instruments at fair value through profit or loss account for investment in security receipts. Net gain is recognized as income and is clubbed with revenue from operations, while net loss is recognised as an expense and is clubbed with total expenses for the year.
Profit/ (Loss) before Tax
Our profit before tax was 4,147.42 million in Fiscal 2024 as compared to the profit before tax of 3,863.28 million in Fiscal 2023.
Tax Expense
Our tax expense increased by 26.06% from 823.88 million in Fiscal 2023 to 1,038.54 million in Fiscal 2024. In Fiscal 2023, we had a current tax expense of 357.21 million and a deferred tax expense of 466.67 million. In Fiscal 2024, we had a current tax expense of 1,113.94 million and a deferred tax credit of (75.40) million.
Profit/ (Loss) for the Year
For the reasons discussed above, our profit for the year was 3,108.87 million in Fiscal 2024 as compared to 3,039.40 million in Fiscal 2023.
CONSOLIDATED FINANCIAL CONDITION
Assets
The table below sets out the principal components of our assets on a consolidated basis as of the dates indicated:
| Particulars | As of March 31, 2025 | As of March 31, 2024 | As of March 31, 2023 |
( in million) |
|||
| Financial Assets | |||
| Cash and Cash Equivalents | 1,832.53 | 3,592.64 | 2,442.73 |
| Bank Balances other than Cash and Cash Equivalents | 7,137.79 | 6,163.65 | 3,484.45 |
| Trade Receivables | 538.80 | 623.11 | 496.85 |
| Loans | 21,586.47 | 14,483.88 | 7,924.55 |
| Investments | 11,215.95 | 9,137.54 | 10,901.10 |
| Other Financial Assets | 197.95 | 191.70 | 91.66 |
| Total Financial Assets | 42,509.49 | 34,192.51 | 25,341.34 |
| Non-Financial Assets | |||
| Current Tax Assets (Net) | 434.06 | 1,363.31 | 1,580.46 |
| Property, Plant and Equipment | 354.61 | 369.97 | 378.43 |
| Other Intangible Assets | 37.50 | 3.19 | 1.32 |
| Intangible Assets under Development | 6.76 | 33.00 | - |
| Other Non Financial Assets | 617.43 | 604.91 | 594.21 |
| Total Non Financial Assets | 1,450.36 | 2,374.38 | 2,554.42 |
| Total Assets | 43,959.85 | 36,566.89 | 27,895.76 |
As of March 31, 2025, we had total assets of 43,959.85 million, compared to 36,566.89 million as of March 31, 2024 and 27,895.76 million as of March 31, 2023. The increase in our total assets from March 31, 2023 to March 31, 2025 was primarily on account of a growth in the portfolio of our stressed assets.
Financial Assets
Cash and Cash Equivalents
Our cash and cash equivalents increased from 2,442.73 million as of March 31, 2023 to 3,592.64 million as of March 31, 2024, primarily due to an increase in deposits with maturity of 3 months or less from 1,828.28 million as of March 31, 2023 to 2,368.04 million as of March 31, 2024 as certain collections made during the year could not be distributed to the SR holders, who are the beneficiaries of the relevant trusts due to restrictions including restrictions imposed by courts or borrower litigation.
Accordingly, such amounts were temporarily parked in fixed deposits. Cash and cash equivalents decreased to 1,832.53 million as of March 31, 2025, due to a decrease in deposits with maturity of three months or less from 2,368.04 million as of March 31, 2024 to 1,111.17 million as of March 31, 2025 as certain amounts which were held in temporary fixed deposits due to court orders or litigation, were resolved and distributed to SR holders, who are beneficiaries of the relevant trust.
Bank Balances other than Cash and Cash Equivalents
Our bank balances other than cash and cash equivalents increased from 3,484.45 million as of March 31, 2023 to 6,163.65 million as of March 31, 2024, primarily due to an increase in earmarked balances/deposits from 1,277.24 million as of March 31, 2023 to 5,393.18 million as of March 31, 2024 as certain collections made during the year could not be distributed to the
SR holders, who are the beneficiaries of the relevant trust due to restrictions including restrictions imposed by courts or borrower litigation. Accordingly, such amounts were temporarily parked in fixed deposits. Bank balances other than cash and cash equivalents increased to 7,137.79 million as of March 31, 2025, due to an increase in deposits with maturity greater than three months but less than 12 months from 540.90 million as of March 31, 2024 to 972.52 million as of March 31, 2025 due to as certain amounts which were held in temporary fixed deposits due to court orders or litigation, were resolved and distributed to SR holders, who are beneficiaries of the relevant trust.
Loans
Our loans* increased from 7,924.55 million as of March 31, 2023 to 14,483.88 million as of March 31, 2024, primarily due to an increase in acquisition of financial assets net of realisations during the year of 6,559.33 million . Loans increased to 21,586.47 million as of March 31, 2025 from 14,483.88 million as of March 31, 2024 on account of net increase in acquisition of financial assets net of realisations during the year for 7,102.59 million .
* Loans are financial stressed assets acquired from banks and other financial institutions. These are accounted as financial assets in the books of the trusts, which when consolidated is reflected as loans in the Restated Consolidated Financial Information.
Investments
Our investments decreased from 10,901.10 million as of March 31, 2023 to 9,137.54 million as of March 31, 2024, primarily due to the redemption of security receipts. Investments increased to 11,215.95 million as of March 31, 2025, due to an increase in acquisition of security receipts (net of redemptions).
Non-Financial Assets
Current Tax Assets (Net)
Current tax assets (net) decreased from 1,580.46 million as of March 31, 2023 to 1,363.31 million as of March 31, 2024 and 434.06 million as of March 31, 2025 on account of income tax refunds received after our income tax returns were processed.
Liabilities and Equity
The following table sets forth the principal components of our liabilities on a consolidated basis as of the dates indicated:
| Particulars | As of March 31, 2025 | As of March 31, 2024 | As of March 31, 2023 |
( in million) |
|||
| Financial liabilities | |||
| Payables | |||
| (i) Total Outstanding Dues of Micro Enterprises and | 3.41 | 2.00 | 0.17 |
| Small Enterprises | |||
| (ii) Total Outstanding Dues of Creditors other than | 15.13 | 12.23 | 3.23 |
| Micro Enterprises and Small Enterprises | |||
| Borrowings (Other than Debt Securities) | 3,059.86 | 1,499.47 | 1,180.13 |
| Security Receipts | 6,254.52 | 3,316.41 | 978.39 |
| Other Financial Liabilities | 6,286.49 | 6,729.49 | 2,032.13 |
| Total Financial Liabilities | 15,619.41 | 11,559.60 | 4,194.05 |
| Non-Financial Liabilities | |||
| Provisions | 421.53 | 404.74 | 435.08 |
| Deferred Tax Liabilities (Net) | 456.55 | 106.24 | 181.64 |
| Other Non-Financial Liabilities | 830.96 | 231.19 | 643.44 |
| Total Non-Financial Liabilities | 1,709.04 | 742.16 | 1,260.15 |
| Equity | |||
| (a) Equity Share Capital | 3,248.97 | 3,248.97 | 3,248.97 |
| (b) Other Equity | |||
| Company | 30,931.13 | 27,512.42 | 24,867.31 |
| Non Controlling Interest | (7,548.69) | (6,496.25) | (5,674.72) |
| Total Equity | 26,631.41 | 24,265.14 | 22,441.56 |
| Total Liabilities and Equity | 43,959.85 | 36,566.89 | 27,895.76 |
Financial Liabilities
Borrowings (Other than Debt Securities)
Borrowings (other than debt securities) increased from 1,180.13 million as of March 31, 2023 to 1,499.47 million as of March 31, 2024 on account of an increase in term loans from banks from nil as of March 31, 2023 to 500.00 million as of March 31, 2024. Borrowings (other than debt securities) increased to 3,059.86 million as of March 31, 2025 on account of (i) an increase in working capital term loans from banks from 999.47 million as of March 31, 2024 to 2,059.30 million as of
March 31, 2025 since we borrowed additional funds for our working capital requirements; and (ii) an increase in term loans from banks from 500.00 million as of March 31, 2024 to 1,000.00 million as of March 31, 2025.
Security Receipts
Security receipts increased from 978.39 million as of March 31, 2023 to 3,316.41 million as of March 31, 2024 on account of additional investment made in security receipts during the year. Security receipts increased to 6,254.51 million as of March 31, 2025 on account of additional investment made in security receipts during the year .
Other Financial Liabilities
Other financial liabilities increased from 2,032.13 million as of March 31, 2023 to 6,729.49 million as of March 31, 2024 on account of an increase in others comprising certain collections made during the year could not be distributed to the SR holders, who are the beneficiaries of the relevant trust due to restrictions including restrictions imposed by courts or borrower litigation, from 1,808.43 million as of March 31, 2023 to 6,502.65 million as of March 31, 2024 due to certain collections made during the year could not be distributed to the SR holders, who are the beneficiaries of the relevant trust due to restrictions including restrictions imposed by courts or borrower litigation. Accordingly, such amounts were temporarily parked in fixed deposits. Other financial liabilities decreased to 6,286.50 million as of March 31, 2025 on account of a decrease in others from 6,502.65 million as of March 31, 2024 to 6,110.40 million as of March 31, 2025 due to certain collections made during the year could not be distributed to the SR holders, who are the beneficiaries of the relevant trust due to restrictions including restrictions imposed by courts or borrower litigation. Accordingly, such amounts were temporarily parked in fixed deposits.
Equity
As of March 31, 2025, our total equity was 26,631.41 million, representing 60.58% of our total assets. As of March 31, 2024, our total equity was 24,265.14 million, representing 66.36% of our total assets. As of March 31, 2023, our total equity was
22,441.56 million, representing 80.45% of our total assets. The increase in our total equity from March 31, 2023 to March 31, 2025 was primarily due to an increase in our retained earnings and statutory reserve.
LIQUIDITY AND CAPITAL RESOURCES
We have historically financed the expansion of our business and operations primarily through funds generated from our operations. From time to time, we may obtain loan facilities to finance our short term working capital requirements. We regularly monitor our funding levels to ensure that we are able to satisfy the requirements for acquiring stressed assets for our business.
CONSOLIDATED CASH FLOWS
The following table sets forth certain information relating to our cash flows on a consolidated basis in the years indicated:
| Particulars | Fiscal 2025 | Fiscal 2024 | Fiscal 2023 |
( in million) |
|||
| Net Cash Generated from Operating Activities | 2,823.19 | 5,516.26 | 2,953.25 |
| Net Cash (Used In) Investing Activities | (5,536.62) | (3,806.00) | (3,632.97) |
| Net Cash Generated from Financing Activities | 953.31 | (560.36) | (435.09) |
| Net Increase/ (Decrease) in Cash and Cash Equivalents | (1,760.11) | 1,149.90 | (1,114.81) |
Operating Activities
Fiscal 2025
Net cash generated from operating activities was 2,823.19 million in Fiscal 2025. While our net profit before tax was 4,311.58 million in Fiscal 2025, we had operating cash flow before working capital changes of 1,860.20 million, primarily as a result of fair value gain on security receipts of (1,347.85) million, unrealised fees and expenses written off (net) of (693.02) million, loss on consolidation of (225.82) million, interest income on tax refund of (217.82) million and interest on deposits with banks of (176.74) million. Our working capital adjustments to our operating cash flow before working capital changes in Fiscal 2025 consisted of a decrease in trade receivables of 476.34 million, a decrease in other financial and non-financial assets of 253.63 million, and an increase in other non-financial liabilities and provisions of 616.56 million, which was partially offset by a decrease in other financial liabilities of (435.33) million.
Fiscal 2024
Net cash generated from operating activities was 5,516.26 million in Fiscal 2024. While our net profit before tax was 4,147.42 million in Fiscal 2024, we had operating cash flow before working capital changes of 1,436.70 million in Fiscal 2024, primarily as a result of realisation against investments written off in previous years of (1,454.95) million, unrealised fees and expenses written off (net) of 977.39 million, loss on consolidation of 459.51 million and interest on deposits with banks of (200.61) million. Our working capital adjustments to our operating cash flow before working capital changes in
Fiscal 2024 consisted of an increase in other financial liabilities of 4,700.91 million, a decrease in trade receivables of 434.46 million and a decrease in other financial and non-financial assets of 286.14 million, which was partially offset by a decrease in other non financial liabilities and provisions of 442.59 million.
Fiscal 2023
Net cash generated from operating activities was 2,953.25 million in Fiscal 2023. While our net profit before tax was 3,863.28 million in Fiscal 2023, we had operating cash flow before working capital changes of 2,412.83 million in Fiscal 2023, primarily as a result of fair value gain on security receipts of 2,805.42 million, realisation against investments written off in previous years of (918.90) million, loss on consolidation of 501.79 million and interest on deposits with banks of
(200.86) million. Our working capital adjustments to our operating cash flow before working capital changes in Fiscal 2023 consisted of a decrease in other financial and non-financial assets of 1,201.77 million, an increase in other financial liabilities of 332.06 million and a decrease in trade receivables of 85.41 million, which was partially offset by a decrease in other non financial liabilities and provisions of 263.37 million.
Investing Activities
Fiscal 2025
Net cash used in investing activities was 5,536.61 million in Fiscal 2025, primarily comprising investments in loans (net) of (7,102.59) million, investments in mutual funds of (2,719.87) million, an increase in earmarked constituent balances of
(542.52) million, and a decrease in bank deposits not considered as cash and cash equivalents of 431.62 million, which was partially offset by SRs issued/distributed (net) of 2,938.10 million and redemption in mutual fund of 2,332.88 million.
Fiscal 2024
Net cash used in investing activities was 3,806.00 million in Fiscal 2024, primarily comprising investments in loans (net) of (6,559.33) million, a decrease in earmarked constituent balances of 4,067.47 million, which was partially offset by investment in security receipts (net) of 2,848.15 million, SRs issued/ distributed (net) of 2,338.02 million and increase in bank deposits not considered as cash and cash equivalent of 1,388.26 million.
Fiscal 2023
Net cash used in investing activities was 3,632.97 million in Fiscal 2023, primarily comprising investments in loans (net) of (1,803.16) million, investment in security receipts (net) of (1,548.78) million, a decrease in bank deposits not considered as cash and cash equivalents of 777.47 million, and a decrease in earmarked constituent balances of 249.47 million, which was partially offset by SRs issued/ distributed (net) of 402.03 million and interest received on deposits of 200.86 million.
Financing Activities
Fiscal 2025
Net cash generated from financing activities was 953.31 million in Fiscal 2025, primarily comprising proceeds from short-term borrowings (net) of 1,059.83 million and proceeds from term loans of 500.00 million, which was partially offset by dividend payout of (487.35) million and finance cost of (112.75) million.
Fiscal 2024
Net cash generated from financing activities was (560.36) million in Fiscal 2024, primarily comprising dividend payout of (812.24) million, repayment of short-term borrowings (net) of 180.53 million, finance cost of (61.51) million, which was partially offset by proceeds from term loans of 500.00 million.
Fiscal 2023
Net cash generated from financing activities was (435.09) million in Fiscal 2023, primarily comprising proceeds from term loan of (320.00) million and dividend payout of (324.90) million, which was partially offset by proceeds from short-term borrowings (net) of 231.26 million.
STANDALONE RESULTS OF OPERATIONS
The following table sets forth certain information with respect to our results of operations on a standalone basis for Fiscals 2025, 2024 and 2023:
| Particulars | Fiscal 2025 | Fiscal 2024 | Fiscal 2023 | |||
| ( million) | Percentage of Total Income (%) | ( million) | Percentage of Total Income (%) | ( million) | Percentage of Total Income (%) | |
| Revenue from operations | ||||||
| Fees and other income | 1,719.08 | 27.58% | 1,788.71 | 31.16% | 1,734.55 | 23.01% |
| Other operating income | 1,922.53 | 30.84% | 823.38 | 14.34% | 1,635.17 | 21.69% |
| Recovery of security receipts, unrealized fee and expenses (written off earlier) | 1,000.32 | 16.05% | 2,874.74 | 50.07% | 1,408.98 | 18.69% |
| Interest income | 137.84 | 2.21% | 214.58 | 3.74% | 295.15 | 3.92% |
| Net gain on fair value changes unrealised | 1,184.46 | 19.00% | - | - | 2,439.29 | 32.36% |
| Total revenue from operations | 5,964.23 | 95.67% | 5,701.41 | 99.31% | 7,513.14 | 99.68% |
| Other income | 269.76 | 4.33% | 39.65 | 0.69% | 23.97 | 0.32% |
| Total Income | 6,233.99 | 100.00% | 5,741.06 | 100.00% | 7,537.11 | 100.00% |
| Expenses | ||||||
| Finance costs | 113.31 | 1.82% | 40.06 | 0.70% | 15.98 | 0.21% |
| Impairment of financial instruments/ financial assets | 38.93 | 0.62% | 23.90 | 0.42% | (233.32) | (3.10)% |
| Employee benefits expenses | 609.42 | 9.78% | 556.60 | 9.70% | 547.78 | 7.27% |
| Particulars | Fiscal 2025 | Fiscal 2024 | Fiscal 2023 | |||
| ( million) | Percentage of Total Income (%) | ( million) | Percentage of Total Income (%) | ( million) | Percentage of Total Income (%) | |
| Depreciation, amortization and impairment | 21.53 | 0.35% | 19.32 | 0.34% | 21.41 | 0.28% |
| Write off of security receipts, unrealized fee and expenses | 367.13 | 5.89% | 492.64 | 8.58% | 3,786.31 | 50.24% |
| Other expenses | 311.29 | 4.99% | 258.57 | 4.50% | 183.83 | 2.44% |
| Net loss on fair value changes | - | - | 258.02 | 4.49% | - | - |
| unrealised | ||||||
| Total Expenses | 1,461.61 | 23.45% | 1,649.11 | 28.72% | 4,321.99 | 57.34% |
| Profit/ (loss) before tax | 4,772.38 | 76.55% | 4,091.95 | 71.28% | 3,215.12 | 42.66% |
| Tax expense | ||||||
| Current tax | 868.88 | 13.94% | 1,113.94 | 19.40% | 357.21 | 4.74% |
| Deferred tax | 350.31 | 5.62% | (75.40) | (1.31)% | 466.67 | 6.19% |
| Total tax expense | 1,219.19 | 19.56% | 1,038.54 | 18.09% | 823.88 | 10.93% |
| Profit/ (loss) for the year | 3,553.19 | 57.00% | 3,053.41 | 53.19% | 2,391.24 | 31.73% |
FISCAL 2025 COMPARED TO FISCAL 2024
Total Income
Our total income increased by 8.59% from 5,741.06 million in Fiscal 2024 to 6,233.99 million in Fiscal 2025, primarily due to an increase in revenue from operations.
Revenue from Operations
Our revenue from operations increased by 4.60% from 5,701.41 million in Fiscal 2024 to 5,964.23 million in Fiscal 2025, primarily on account of (i) an increase in other operating income from 823.38 million in Fiscal 2024 to 1,922.53 million in Fiscal 2025 due to an increase in income from investments from 734.50 million in Fiscal 2024 to 1,846.17 million in Fiscal
2025 due to higher recovery over and above the cost of acquisition and expenses in some trusts resulting in investment income; and (ii) a net gain on fair value changes unrealised* from nil in Fiscal 2024 to 1,184.46 million in Fiscal 2025, primarily on account of a net gain financial instruments at fair value through profit and loss account on security receipts of 1,184.74 million on account of a rating upgrade on certain stressed assets in our portfolio and higher initial rating on certain cash investments made in certain trusts during the year.
The overall increase in our revenue from operations in Fiscal 2025 was partially offset by decreases in recovery of security receipts, unrealized fee and expenses (written off earlier) by 65.20% from 2,874.74 million in Fiscal 2024 to 1,000.32 million in Fiscal 2025 due to a decrease in investment in security receipts from 1,454.95 million in Fiscal 2024 to 144.17 million in Fiscal 2025 since during Fiscal 2024 we made higher recoveries of our outstanding investments that were written off during previous years.
*Note: Net gain/(loss) on fair value changes- unrealised is the net gain or loss on financial instruments at fair value through profit or loss account for investment in security receipts. Net gain is recognized as income and is clubbed with revenue from operations, while net loss is recognised as an expense and is clubbed with total expenses for the year.
Other Income
Our other income increased from 39.65 million in Fiscal 2024 to 269.76 million in Fiscal 2025, primarily due to an increase in other income - others from 39.31 million in Fiscal 2024 to 269.47 million in Fiscal 2025 on account of interest on income tax refund received for a previous assessment year.
Expenses
Our total expenses decreased by 11.37% from 1,649.11 million in Fiscal 2024 to 1,461.61 million in Fiscal 2025, mainly due to a decrease in write off of security receipts, unrealized fee and expenses.
Finance Costs
Our finance costs increased from 40.06 million in Fiscal 2024 to 113.31 million in Fiscal 2025, primarily due to an increase in interest on borrowings from 38.69 million in Fiscal 2024 to 113.01 million in Fiscal 2025 due to an increase in the outstanding amount of our borrowings during the year.
Impairment of Financial Instruments/ Financial Assets
Impairment of financial instruments/ financial assets increased by 62.88% from 23.90 million in Fiscal 2024 to 38.93 million in Fiscal 2025, primarily due to an increase in fees and expenses from 23.90 million in Fiscal 2024 to 38.93 million in Fiscal 2025 incurred on expected credit loss on outstanding fees and expenses recoverable from trusts.
Employee Benefits Expenses
Our employee benefits expenses increased by 9.49% from 556.60 million in Fiscal 2024 to 609.42 million in Fiscal 2025, primarily due to an increase in salaries and wages from 517.91 million in Fiscal 2024 to 567.92 million in Fiscal 2025 due to an increase the number of our employees and annual increments given to employees and bonus provision.
Depreciation, Amortization and Impairment
Our depreciation, amortization and impairment increased by 11.43% from 19.32 million in Fiscal 2024 to 21.53 million in Fiscal 2025, primarily due to an increase in amortization of intangible assets from 0.90 million in Fiscal 2024 to 2.66 million in Fiscal 2025.
Write Off of Security Receipts, Unrealized Fee and Expenses
Write off of security receipts, unrealized fee and expenses decreased by 25.48% from 492.64 million in Fiscal 2024 to 367.13 million in Fiscal 2025, primarily due to a decrease in unrealised expenses recoverable from trusts from 340.92 million in Fiscal 2024 to 148.67 million in Fiscal 2025 due to completion of maximum resolution period of eight years for such trusts as per the provisions of RBI guidelines.
Other Expenses
Our other expenses increased by 20.39% from 258.57 million in Fiscal 2024 to 311.29 million in Fiscal 2025, primarily due to increases in (i) repairs and maintenance from 23.48 million in Fiscal 2024 to 33.93 million in Fiscal 2025 on account of repairs undertaken; (ii) contribution towards corporate social responsibility from 26.20 million in Fiscal 2024 to 61.93 million in Fiscal 2025 since there was an increase in our profit; (iii) travelling, boarding and lodging expenses from 12.59 million in Fiscal 2024 to 19.49 million in Fiscal 2025; and (iv) other expenditure from 62.12 million in Fiscal 2024 to
66.18 million in Fiscal 2025.
Net Loss on Fair Value Changes Unrealised
Net loss on fair value changes unrealised* decreased from 258.02 million in Fiscal 2024 to nil in Fiscal 2025 (in Fiscal 2025, we had a net gain on fair value changes- unrealised of 1,184.46 million) since we had rating downgrades on certain stressed assets in our portfolio during Fiscal 2024 and some of our portfolios neared the eight year period as per the RBI guidelines.
*Note: Net gain/(loss) on fair value changes- unrealised is the net gain or loss on financial instruments at fair value through profit or loss account for investment in security receipts. Net gain is recognized as income and is clubbed with revenue from operations, while net loss is recognised as an expense and is clubbed with total expenses for the year.
Profit/ (Loss) before Tax
Our profit before tax was 4,772.38 million in Fiscal 2025 as compared to a profit before tax of 4,091.95 million in Fiscal 2024.
Tax Expense
Our tax expenses increased by 17.39% from 1,038.54 million in Fiscal 2024 to 1,219.19 million in Fiscal 2025. In Fiscal 2024, we had a current tax expense of 1,113.94 million and a deferred tax credit of 75.40 million. In Fiscal 2025, we had a current tax expense of 868.88 million and a deferred tax expense of 350.31 million.
Profit/ (Loss) for the Year
For the reasons discussed above, our profit for the year was 3,553.19 million in Fiscal 2025 as compared to 3,053.41 million in Fiscal 2024.
FISCAL 2024 COMPARED TO FISCAL 2023
Total Income
Our total income decreased by 23.83% from 7,537.11 million in Fiscal 2023 to 5,741.06 million in Fiscal 2024, primarily due to a decrease in revenue from operations.
Revenue from Operations
Our revenue from operations decreased by 24.11% from 7,513.14 million in Fiscal 2023 to 5,701.41 million in Fiscal 2024, on account of decreases in (i) other operating income by 49.65% from 1,635.17 million in Fiscal 2023 to 823.38 million in Fiscal 2024 due to a decrease in income from investments from 1,460.24 million in Fiscal 2023 to 734.50 million in Fiscal
2024 on account of lower recoveries in certain trusts and (ii) a net gain on fair value changes unrealised* from 2,439.29 million in Fiscal 2023 to nil in Fiscal 2024, primarily on account of a net gain financial instruments at fair value through profit and loss account on security receipts of 2,439.44 million in Fiscal 2023 on account of a rating upgrade on certain stressed assets in our portfolio and higher initial rating on certain cash investments made in trusts during the year. The overall decrease in our revenue from operations in Fiscal 2024 was partially offset by an increase in recovery of security receipts, unrealized fee and expenses (written off earlier) from 1,408.98 million in Fiscal 2023 to 2,874.74 million in Fiscal 2024 due to an increase in investment in security receipts from 918.90 million in Fiscal 2023 to 1,454.95 million in Fiscal 2024 since we made higher recoveries of our outstanding investments that were written off during previous years.
*Note: Net gain/(loss) on fair value changes- unrealised is the net gain or loss on financial instruments at fair value through profit or loss account for investment in security receipts. Net gain is recognized as income and is clubbed with revenue from operations, while net loss is recognised as an expense and is clubbed with total expenses for the year.
Other Income
Our other income increased by 65.42% from 23.97 million in Fiscal 2023 to 39.65 million in Fiscal 2024, primarily due to in other income - others comprising reimbursement of certain expenses from 23.88 million in Fiscal 2023 to 39.31 million in Fiscal 2024.
Expenses
Our total expenses decreased by 61.84% from 4,321.99 million in Fiscal 2023 to 1,649.11 million in Fiscal 2024, primarily due to a decrease in write off of security receipts, unrealized fee and expenses.
Finance Costs
Our finance costs increased from 15.98 million in Fiscal 2023 to 40.06 million in Fiscal 2024, primarily due to an increase in interest on borrowings from 14.65 million in Fiscal 2023 to 38.69 million in Fiscal 2024 due to an increase in the outstanding amount of our borrowings during the year.
Impairment of Financial Instruments/ Financial Assets
Impairment of financial instruments/ financial assets was (233.32) million in Fiscal 2023 as compared to 23.90 million in Fiscal 2024, primarily comprising loans of (127.19) million and fees and expenses of (106.13) million on account of reversal of expected credit loss provisions due to recovery in certain trusts.
Employee Benefits Expenses
Our employee benefits expenses increased by 1.61% from 547.78 million in Fiscal 2023 to 556.60 million in Fiscal 2024, primarily due to an increase in salaries and wages from 513.86 million in Fiscal 2023 to 517.91 million in Fiscal 2024 due to annual increments given to employees and bonus provision.
Depreciation, Amortization and Impairment
Our depreciation, amortization and impairment decreased by 9.76% from 21.41 million in Fiscal 2023 to 19.32 million in Fiscal 2024, primarily due to a decrease in depreciation of tangible assets from 14.44 million in Fiscal 2023 to 12.62 million in Fiscal 2024.
Write Off of Security Receipts, Unrealized Fee and Expenses
Write off of security receipts, unrealized fee and expenses decreased by 86.99% from 3,786.31 million in Fiscal 2023 to 492.64 million in Fiscal 2024, primarily due to a decrease in investment in security receipts written off from 2,491.28 million in Fiscal 2023 to 49.46 million in Fiscal 2024 on account of completion of maximum resolution period of eight years as per the provisions of RBI guidelines.
Other Expenses
Our other expenses increased by 40.66% from 183.83 million in Fiscal 2023 to 258.57 million in Fiscal 2024, primarily due to increases in (i) professional charges from 62.32 million in Fiscal 2023 to 95.97 million in Fiscal 2024 on account of services availed for tax and other legal matters; (ii) contribution towards corporate social responsibility from 4.87 million in
Fiscal 2023 to 26.20 million in Fiscal 2024 since there was an increase in our profit; and (iii) other expenditure from 42.68 million in Fiscal 2023 to 62.12 million in Fiscal 2024.
Net Loss on Fair Value Changes Unrealised
Net loss on fair value changes unrealised* increased from nil in Fiscal 2023 (in Fiscal 2023 we had a net gain on fair value changes- unrealised of 2,439.29 million) to 258.02 million in Fiscal 2024, since we had rating downgrades on certain stressed assets in our portfolio during Fiscal 2024.
*Note: Net gain/(loss) on fair value changes- unrealised is the net gain or loss on financial instruments at fair value through profit or loss account for investment in security receipts. Net gain is recognized as income and is clubbed with revenue from operations, while net loss is recognised as an expense and is clubbed with total expenses for the year.
Profit/ (Loss) before Tax
Our profit before tax was 4,091.95 million in Fiscal 2024 as compared to a profit before tax of 3,215.12 million in Fiscal 2023.
Tax Expense
Our total tax expenses increased by 26.05% from 823.88 million in Fiscal 2023 to 1,038.54 million in Fiscal 2024. In Fiscal 2023, we had a current tax expense of 357.21 million and a deferred tax expense of 466.67 million. In Fiscal 2024, we had a current tax expense of 1,113.94 million and a deferred tax credit of (75.40) million.
Profit/ (Loss) for the Year
For the reasons discussed above, our profit for the year was 3,053.41 million in Fiscal 2024 as compared to 2,391.24 million in Fiscal 2023.
STANDALONE FINANCIAL CONDITION
Assets
The table below sets out the principal components of our assets on a standalone basis as of the dates indicated:
| Particulars | As of March 31, 2025 | As of March 31, 2024 | As of March 31, 2023 |
( in million) |
|||
| Financial Assets | |||
| Cash and Cash Equivalents | 1,369.08 | 3,324.83 | 2,004.32 |
| Bank Balances other than Cash and Cash Equivalents | 1,217.81 | 770.48 | 2,207.21 |
| Trade Receivables | 720.50 | 729.74 | 566.77 |
| Investments | 27,716.51 | 20,623.94 | 17,769.62 |
| Other Financial Assets | 242.09 | 174.37 | 154.96 |
| Total Financial Assets | 31,265.99 | 25,623.36 | 22,702.88 |
| Non-Financial Assets | |||
| Current Tax Assets (Net) | 355.88 | 1,318.93 | 1,561.02 |
| Property, Plant and Equipment | 354.61 | 369.97 | 378.42 |
| Other Intangible Assets | 37.49 | 3.19 | 1.33 |
| Intangible Assets under Development | 6.76 | 33.00 | - |
| Other Non-Financial Assets | 617.43 | 604.91 | 594.31 |
| Total Non-Financial Assets | 1,372.17 | 2,330.00 | 2,535.08 |
| Total Assets | 32,638.16 | 27,953.36 | 25,237.96 |
As of March 31, 2025, we had total assets of 32,638.16 million, compared to 27,953.36 million as of March 31, 2024 and 25,237.96 million as of March 31, 2023. The increase in our total assets from March 31, 2023 to March 31, 2025 was primarily on account of a growth in the portfolio of our stressed assets.
Financial Assets
Cash and Cash Equivalents
Our cash and cash equivalents increased from 2,004.32 million as of March 31, 2023 to 3,324.83 million as of March 31, 2024, primarily due to an increase in deposits with maturity of 3 months or less from 1,828.28 million as of March 31, 2023 to 2,368.04 million as of March 31, 2024 to maintain liquidity to support the growth of our business and acquire stressed assets. Cash and cash equivalents decreased to 1,369.08 million as of March 31, 2025, due to a decrease in deposits with maturity of 3 months or less from 2,368.04 million as of March 31, 2024 to 1,111.17 million as of March 31, 2025 as we deployed funds to acquire stressed assets during Fiscal 2025.
Bank Balances other than Cash and Cash Equivalents
Our bank balances other than cash and cash equivalents decreased from 2,207.21 million as of March 31, 2023 to 770.48 million as of March 31, 2024, primarily due to a decrease in deposits with maturity greater than 3 months but less than 12 months from 1,929.16 million as of March 31, 2023 to 540.90 million as of March 31, 2024 since we made investments to acquire stressed assets. Bank balances other than cash and cash equivalents increased to 1,217.81 million as of March 31, 2025, due to an increase in deposits with maturity greater than 3 months but less than 12 months from 540.90 million as of March 31, 2024 to 972.52 million as of March 31, 2025 due to higher recoveries made during the year resulting in funds being parked in fixed deposits for longer periods.
Investments
Our investments increased from 17,769.62 million as of March 31, 2023 to 20,623.94 million as of March 31, 2024 and
27,716.51 million as of March 31, 2025 due to an increased investments in security receipts (net of redemptions).
Non-Financial Assets
Current Tax Assets (Net)
Current tax assets (net) decreased from 1,561.02 million as of March 31, 2023 to 1,318.93 million as of March 31, 2024 and 355.88 million as of March 31, 2025 on account of income tax refunds received after our income tax returns were processed.
Liabilities and Equity
The following table sets forth the principal components of our liabilities on a standalone basis as of the dates indicated:
| Particulars (Restated Standalone Financial Information) | As of March 31, 2025 | As of March 31, 2024 | As of March 31, 2023 |
( in million) |
|||
| Financial liabilities | |||
| Payables | |||
| (i) Total Outstanding Dues of Micro Enterprises and Small | 3.41 | 2.00 | 0.17 |
| Enterprises | |||
| (ii) Total Outstanding Dues of Creditors other than Micro | 15.13 | 12.23 | 3.23 |
| Enterprises and Small Enterprises | |||
| Borrowings (Other than Debt Securities) | 3,059.86 | 1,499.47 | 1,180.13 |
| Other Financial Liabilities | 298.00 | 1,121.55 | 509.06 |
| Total Financial Liabilities | 3,376.40 | 2,635.25 | 1,692.59 |
| Non-Financial Liabilities | |||
| Provisions | 421.53 | 404.74 | 435.08 |
| Deferred Tax Liabilities (Net) | 456.55 | 106.24 | 181.64 |
| Other Non-Financial Liabilities | 705.70 | 182.02 | 531.22 |
| Total Non-Financial Liabilities | 1,583.78 | 693.00 | 1,147.94 |
| Equity | |||
| (a) Equity Share Capital | 3,248.97 | 3,248.97 | 3,248.97 |
| (b) Other Equity | 24,429.01 | 21,376.14 | 19,148.46 |
| Total Equity | 27,677.98 | 24,625.11 | 22,397.43 |
| Total Liabilities and Equity | 32,638.16 | 27,953.36 | 25,237.96 |
Financial Liabilities
Borrowings (Other than Debt Securities)
Borrowings (other than debt securities) increased from 1,180.13 million as of March 31, 2023 to 1,499.47 million as of March 31, 2024 on account of an increase in term loans from banks from nil as of March 31, 2023 to 500.00 million as of March 31, 2024. Borrowings (other than debt securities) increased to 3,059.86 million as of March 31, 2025 on account of (i) an increase in working capital term loans from banks from 999.47 million as of March 31, 2024 to 2,059.29 million as of
March 31, 2025 since we borrowed additional funds for our working capital requirements; and (ii) an increase in term loans from banks from 500.00 million as of March 31, 2024 to 1,000.00 million as of March 31, 2025.
Equity
As of March 31, 2025, our total equity was 27,677.98 million, representing 84.80% of our total assets. As of March 31, 2024, our total equity was 24,625.11 million, representing 88.09% of our total assets. As of March 31, 2023, our total equity was
22,397.43 million, representing 88.75% of our total assets. The increase in our total equity from March 31, 2023 to March 31, 2025 was primarily due to an increase in our retained earnings and statutory reserve.
STANDALONE CASH FLOWS
The following table sets forth certain information relating to our cash flows on a standalone basis in the years indicated:
| Particulars | Fiscal 2025 | Fiscal 2024 | Fiscal 2023 |
( in million) |
|||
| Net Cash Generated from Operating Activities | 3,190.36 | 2,022.54 | 2,716.36 |
| Net Cash (Used In) Investing Activities | (6,099.42) | (163.01) | (3,449.91) |
| Net Cash Generated from Financing Activities | 953.30 | (539.03) | (435.09) |
| Net Increase/ (Decrease) in Cash and Cash Equivalents | (1,955.75) | 1,320.50 | (1,168.64) |
Operating Activities
Fiscal 2025
Net cash generated from operating activities was 3,190.36 million in Fiscal 2025. While our net profit before tax was 4,772.38 million in Fiscal 2025, we had operating cash flow before working capital changes of 2,797.22 million, primarily as a result of fair value gain on security receipts of (1,184.74) million, unrealised fees and expenses written off (net) of (693.02) million and interest on income tax refund of (217.82) million. Our working capital adjustments to our operating cash flow before working capital changes in Fiscal 2025 consisted of an increase in other non financial liabilities and provisions of 540.47 million, a decrease in trade receivables of 394.25 million and a decrease in other financial and non-financial assets of 188.83 million, which was partially offset by a decrease in other financial liabilities of (815.93) million.
Fiscal 2024
Net cash generated from operating activities was 2,022.54 million in Fiscal 2024. While our net profit before tax was 4,091.95 million in Fiscal 2024, we had operating cash flow before working capital changes of 1,906.60 million, primarily as a result of realisation against investments written off in previous years of (1,454.95) million, unrealised fees and expenses written off (net) of (976.61) million, and interest on deposits with banks of (136.33) million. Our working capital adjustments to our operating cash flow before working capital changes in Fiscal 2024 consisted of an increase in other financial liabilities of 610.07 million, a decrease in trade receivables of 394.57 million, a decrease in other financial and non-financial assets of 365.06 million, which was partially offset by a decrease in other non-financial liabilities and provisions of 379.54 million.
Fiscal 2023
Net cash generated from operating activities was 2,716.36 million in Fiscal 2023. While our net profit before tax was 3,215.12 million in Fiscal 2023, we had operating cash flow before working capital changes of 2,754.14 million, primarily as a result of a fair value gain on security receipts of 2,439.44 million, realisation against investments written off in previous years of (918.90) million and impairment loss on financial instruments of 233.33 million. Our working capital adjustments to our operating cash flow before working capital changes in Fiscal 2023 consisted of a decrease in other financial and non-financial assets of 875.41 million, which was partially offset by a decrease in other non-financial liabilities and provisions of
358.48 million.
Investing Activities
Fiscal 2025
Net cash used in investing activities was 6,099.42 million in Fiscal 2025, primarily comprising investments in security receipts of (12,814.86) million and investments in mutual fund of (2,719.87) million, which was partially offset by proceeds from redemption of investments of 7,246.08 million and redemption in mutual funds of 2,332.88 million.
Fiscal 2024
Net cash used in investing activities was 163.01 million in Fiscal 2024, primarily comprising investments in security receipts of (9,449.68) million, which was partially offset by proceeds from redemption of investments of 7,748.44 million and a decrease in bank deposits not considered as cash and cash equivalents of 1,387.65 million.
Fiscal 2023
Net cash used in investing activities was 3,449.91 million in Fiscal 2023, primarily comprising investments in security receipts of (8,166.61) million and an increase in bank deposits not considered as cash and cash equivalents of 777.89 million, which was partially offset by proceeds from redemption of investments of 5,100.19 million.
Financing Activities
Fiscal 2025
Net cash generated from financing activities was 953.30 million in Fiscal 2025, primarily comprising proceeds from short-term borrowings (net) of 1,059.82 million and proceeds from term loans (net) of 500.00 million, which was partially offset by dividend paid of (487.35) million and finance cost of (112.45) million.
Fiscal 2024
Net cash generated from financing activities was (539.03 million in Fiscal 2024, primarily comprising dividend paid of (812.24) million, repayment from short-term borrowings (net) of 180.53 million, which was partially offset by proceeds from term loans (net) of 500.00 million.
Fiscal 2023
Net cash generated from financing activities was (435.09) million in Fiscal 2023, primarily comprising repayment from term loan (net) of 320.00 million and dividend paid of (324.90) million, which was partially offset by proceeds from short-term borrowings (net) of 231.26 million.
FINANCIAL INDEBTEDNESS
As of March 31, 2025, we had total outstanding borrowings amounting to 3,059.86 million on a consolidated basis. For further details related to our indebtedness, see "Financial Indebtedness" on page 370.
The following table sets forth certain information relating to our outstanding indebtedness on a consolidated basis as of March 31, 2025, and our repayment obligations in the periods indicated:
| Particulars | As of March 31, 2025 Payment due by period ( million) | ||
| Less than 1 year | More than 1 year | Carrying amount | |
| Borrowings | 2,309.86 | 750.00 | 3.059.86 |
CONTINGENT LIABILITIES AND COMMITMENTS
As of March 31, 2025, our contingent liabilities on a consolidated basis were as follows:
| Particulars | As at March 31, 2025 |
| ( in million) | |
| a) Guarantees excluding financial guarantees | |
| - Bank guarantee furnished by the Company | 20.00 |
| b) Others | |
| - Service tax (see note below) | 561.04 |
Note: Directorate General of Central Excise Intelligence (DGCEI) and Office of Principal Commissioner of Service TAX-III has issued show cause notices demanding service tax to the extent of 561.04 million (apart from interest and penalty amount) relating to the period May 16, 2008 to June 30, 2017. Subsequently, an order has also been issued by Service Tax Commissionerate III, Mumbai in April 2017 demanding an amount of 458.51 million relating to the period May 16, 2008 to March 31, 2015 and the penalty as per order is 402.40 million whereas interest liability has not been quantified in the said order. Another order for the period of April 1, 2015 to June 30, 2017 issued by Office of the commissioner of CGST & Central Excise, Mumbai in June 2019 demanding amount of 102.53 million and the penalty as per order is 10.25 million whereas interest liability has not been quantified in the said order. Based on the legal opinion, the Company is confident of getting this order quashed and there is not expected to be any liability on the same. The Company has also preferred an appeal in the Tribunal against the order. Although the Company believes that it has a strong case on the aforesaid matter, however considering the amount and the time involved in the settlement of the case, the Company has deposited an amount of 561.04 million "under protest" to freeze the interest liability. No provision in this regard has been made in the accounts since no liability is expected to arise on the Company in this matter.
As of March 31, 2025, our capital commitments on a consolidated basis were as follows:
| Particulars | As at March 31, 2025 |
| ( in million) | |
| Estimated amount of contracts remaining to be executed on capital and not provided for | 1.29 |
OFF-BALANCE SHEET ARRANGEMENTS
As of March 31, 2025, we did not have any off-balance sheet arrangements.
CAPITAL EXPENDITURE
The following table sets forth our capital expenditure on a consolidated basis for the periods indicated:
| Particulars | Fiscal 2025 | Fiscal 2024 | Fiscal 2023 |
( in million) |
|||
| Furniture and Fittings | 0.72 | 0.03 | 0.11 |
| Office Equipments | 0.44 | 0.68 | 0.84 |
| Vehicles | - | 4.95 | - |
| Computers | 3.59 | 2.62 | 6.30 |
| Right to use Leasehold Assets-Office Premises | 2.12 | 3.62 | 7.93 |
| Computer Software | 36.96 | 2.76 | 1.01 |
| Projects in progress | 6.76 | 33.00 | - |
| Total | 50.59 | 47.66 | 16.19 |
CAPITAL ADEQUACY
The following table sets forth information relating to our capital adequacy ratio (capital to risk-weighted assets ("CRAR")) as of the dates indicated:
| Ratio | Numerator | Denominator | As of March 31, 2025 | As of March 31, 2024 | As of March 31, 2023 |
| CRAR | Net owned funds | Risk weighted assets | 90.59% | 99.03% | 95.82% |
| Tier I CRAR | Tier I capital | Risk weighted assets | 90.59% | 99.03% | 95.82% |
CREDIT RATINGS
Our Company had credit rating of ICRA ‘AA- (Stable) for bank loans and NCDs dated March 20, 2025.
The following pie-chart sets forth the details of the credit ratings of the security receipts issued by trusts that were outstanding for less than eight years, as of March 31, 2025, March 31, 2024 and Mach 31, 2025:
The recovery rating ("RR") of security receipts is based on the probability of recovery and such rating is assigned to security receipts based on the net present value of the cash flows expected from the recovery strategy, stated as a percentage of the outstanding face value of the security receipts.
Set forth below are details of our recovery ratings obtained:
| Recovery Ratings | Percentage of outstanding rated AUM | ||
| As of March 31, 2025 | As of March 31, 2024 | As of March 31, 2023 | |
| RR1+(1)/RR1(2) | 34.32% | 34.33% | 33.42% |
| RR2(3) | 44.95% | 45.30% | 43.49% |
| RR3(4) | 17.65% | 15.81% | 18.80% |
| RR4/ RR5(5) | 3.08% | 4.56% | 4.29% |
| Total | 100.00% | 100.00% | 100.00% |
| Unrated(6) | Rating is under process | ||
(1) RR1+: Indicates 150% and above recovery of outstanding face value of SRs. (2) RR1: Indicates 100% to 150% recovery of outstanding face value of SRs. (3) RR2: Indicates 75% to 100% recovery of outstanding face value of SRs. (4) RR3: Indicates 50% to 75% recovery of outstanding face value of SRs.
(5) RR4: Indicates 25% to 50% recovery of outstanding face value of SRs; RR5: Indicates 0% to 25% recovery of outstanding face value of SRs. (6) An unrated portfolio is on account of new acquisitions which are in the process of being rated.
Note: For SRs over 8 years, the ratings are compulsorily withdrawn based on guidelines prescribed by RBI, except in certain exceptional circumstances, as prescribed by the RBI. In accordance with the guidelines prescribed by RBI, the above table includes certain SRs, where the SRs issued by the trusts managed by us are over 8 years, but where the RBI guidelines allow for such SRs to be rated.
RELATED PARTY TRANSACTIONS
We enter into various transactions with related parties in the ordinary course of business. For further information relating to our related party transactions, see "Restated Financial Information - Restated Consolidated Financial Information Note 44 Related Party Transactions" and "Restated Financial Information - Restated Standalone Financial Information Note 44 Related Party Transactions" on pages 338 and 286, respectively.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are exposed to market risk, credit risk and liquidity risk, which may impact the fair value of our financial instruments. We have a risk management policy to manage and mitigate these risks.
Market Risk
Market risk is the risk that future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises of foreign currency risk and interest rate risk. We are primarily exposed to interest rate risk.
Foreign Currency Risk
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in market prices. Market risk comprises of foreign currency risk and interest exposure to the risk of changes in exchange rate as there are no off-shore business transactions.
Interest Rate Risk
Interest rate risk is the risk that fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Our investments are primarily in fixed deposits and security receipts issued by trusts. Our exposure to the risk of changes is market rates relates primarily to our debt obligations with floating interest rates. Hence, we are not significantly exposed to interest rate risk.
Credit Risk
Financial instruments that potentially subject us to concentration of credit risk consist principally of trade receivables, unbilled revenue, investment securities and other recoverable from trusts. By their nature, all such financial instruments involve risks, including the credit risk of non-performance by counterparties i.e. trusts. However, our Company being trustee of all the trusts managed by it, the priority of receivables/ outstanding is a priority as per the waterfall mechanism defined trust deed or offer document. Hence, we are not significantly exposed to credit risk.
Liquidity Risk
Liquidity risk is the risk that we will encounter difficulty in meeting our obligations associated with financial liabilities. The investment philosophy of our Company is capital preservation and liquidity in preference to returns. Although the investments in security receipts are not tradable in market, we consistently generate sufficient cash flows from operations and have access to other sources of funding to meet the financial obligations and maintain adequate liquidity for use.
Operational Risk
We control operational risks to ensure that operational losses (financial or reputational), including any related to conduct of business matters, do not cause material damage to our Company.
Reputational Risk
We protect our reputation from material damage by ensuring that any business activity is satisfactorily assessed and managed by the appropriate level of management and governance oversight.
UNUSUAL OR INFREQUENT EVENTS OR TRANSACTIONS
Except as described in this Draft Red Herring Prospectus, to our knowledge, there have been no "unusual" or "infrequent" events or transactions that have in the past or may in the future affect our business operations or future financial performance.
KNOWN TRENDS OR UNCERTAINTIES
Other than as described in "Risk Factors" and this "Managements Discussion and Analysis of Financial Condition and Results of Operations" on pages 40 and 372, respectively, to our knowledge there are no known trends or uncertainties that have or had or are expected to have a material adverse impact on our revenue or income from continuing operations.
FUTURE RELATIONSHIPS BETWEEN EXPENDITURE AND INCOME
Other than as described in "Risk Factors" on page 40, "Our Business" on page 165 and "Managements Discussion and Analysis of Financial Condition and Results of Operations" on page 372, to our knowledge there are no known factors which we expect will have a material adverse impact on our operations or finances.
NEW PRODUCT OR BUSINESS SEGMENTS
Other than as described in "Our Business" on page 165, there are no new products or business segments in which we operate.
COMPETITIVE CONDITIONS
We expect competitive conditions in our industry to further intensify as new entrants emerge and as existing competitors seek to emulate our business model and offer similar products. For further details, please refer to "Risk Factors" and "Our Business" beginning on pages 40 and 165, respectively.
SIGNIFICANT DEVELOPMENTS AFTER MARCH 31, 2025
To our knowledge, no circumstances have arisen since March 31, 2025, that could materially and adversely affect or are likely to affect, our operations or profitability, or the value of our assets or our ability to pay our material liabilities within the next 12 months, except as set out below:
The Company has granted 635,329 options to employees of the Company under the ARCIL Employee Stock Option Scheme 2025.
The Company has formed 12 new trusts for a total acquisition price of 5,120.60 million, out of which the Companys investment is 2,526.06 million. While these trusts are not subsidiaries as defined under the Companies Act, 2013, our Companys investment in the security receipts of eight of the 12 newly formed trusts is more than 25% of the total investment in security receipts issued by such trusts and accordingly, these 8 trusts are considered as subsidiaries in accordance with IND AS 110 and accounting policies of the Company.
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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IIFL Capital Services Limited - Stock Broker SEBI Regn. No: INZ000164132 (Member ID - NSE: 10975 BSE: 179 MCX: 55995 NCDEX: 01249), DP SEBI Reg. No. IN-DP-185-2016, PMS SEBI Regn. No: INP000002213, IA SEBI Regn. No: INA000000623, Merchant Banker SEBI Regn. No. INM000010940, RA SEBI Regn. No: INH000000248, BSE Enlistment Number (RA): 5016, AMFI-Registered Mutual Fund Distributor & SIF Distributor
ARN NO : 47791 (Date of initial registration – 17/02/2007; Current validity of ARN – 08/02/2027), PFRDA Reg. No. PoP 20092018, IRDAI Corporate Agent (Composite) : CA1099
This Certificate Demonstrates That IIFL As An Organization Has Defined And Put In Place Best-Practice Information Security Processes.
