F Mec International Financial Services Ltd Management Discussions

F Mec International Financial Services Ltd. is a dynamic BSE-listed Non-Banking Financial Company specializing in small-ticket retail and salary-linked lending products. We serve Indias emerging working-class population across urban and semi-urban regions, addressing a critical gap in accessible financial services.

FY 2025-26 was shaped by two significant external disruptions which triggered a broad reassessment of inflation and interest-rate expectations globally. The year began with trade policy uncertainty arising from tariff measures and ended with geopolitical escalation in West Asia. Despite these disruptions, global GDP growth remained resilient in the early part of the year, with GDP expanding at 3.4% in CY 2025, exceeding expectations. However, conditions tightened towards year-end as crude oil prices approached USD 120 per barrel, following disruptions in the Strait of Hormuz, reigniting inflationary pressures and prompting a reassessment of monetary policy trajectories and a massive investment boom in Artificial Intelligence (AI) and technology hardware is acting as a major counterweight to preserve global growth.

Against this backdrop, India remained among the fastest growing major economies, with GDP growth rate reported at 7.6%, marking a clear step up from the prior years 6.5%. The expansion was driven by a strengthening consumption cycle and accelerating manufacturing activity. Despite a fragmented global trade environment shaped by evolving geopolitical alignments, Indias domestic growth engines have gained depth and resilience. Tax rationalisation and the maturation of digital public infrastructure have deepened this resilience, cementing Indias standing.

Agriculture remained on a steady footing, supported by the Digital Agriculture Mission and targeted programmes for self-reliance in pulses. Industrial output gained traction, with manufacturing emerging as a standout contributor. The services sector retained its position as the primary growth engine. Indias Banking, Financial Services, and Insurance (BFSI) landscape is undergoing a structural transformation, shaped by technology adoption, evolving regulatory frameworks, and strong domestic credit momentum.

During the year, GST 2.0 was launched leading to a major overhaul of Indias tax system and simplifying the structure into two main slabs—5% and 18%—with a 40% rate for luxury/sin goods. The key objective of the reform was to reduce compliance cost on tax filing, make MSMEs more competitive and boost consumer demand by lowering tax on daily essential goods.

Non-Banking Financial Companies (NBFCs) play a pivotal role in Indias financial ecosystem, catering to a wide spectrum of borrowers including MSMEs and financially underserved populations thereby advancing financial inclusion and generating employment across the country. Leveraging their deep market understanding and widespread geographic reach, NBFCs have efficiently addressed diverse credit needs with agility and responsiveness.

In FY 2023-24, the sector continued to anchor credit growth, with assets under management (AUM) reaching approximately 47 trillion and is projected to reach 53.7 trillion as on March 31, 2025. Growth was primarily driven by robust retail lending activity and demand from small businesses, despite increased regulatory scrutiny such as enhanced risk weights on unsecured loans and tighter supervision of riskier segments.

In FY 2025-26, the sector is expected to benefit from supportive macroeconomic measures. Budgetary tax reliefs and sustained repo rate cuts are likely to increase disposable income and enhance loan eligibility, offering a tailwind to credit expansion. Strategic public investments and digital lending innovations are also set to drive operational efficiency and sustained growth across the NBFC landscape.

Looking ahead, Indias NBFC sector is on a sustained growth trajectory, with assets under management (AUM) expected to surpass 50 Lakh Crore in FY 2026-27 excluding government-owned NBFCs, as per CRISIL Ratings.

As at 31st March 2026, FMEC manages a loan book of Rs.23.5 crore, supported by over 3.74 lakh app downloads and a team of 50+ professionals. Between 1st April 2025 and 31st March 2026, the Company disbursed ~6273 loans aggregating to approximately Rs.43 crore. This demonstrates strong public market presence and governance discipline.

Our five-year strategic roadmap focuses on geographic expansion, partnership deepening, and product diversification to achieve transformational growth. We are targeting a 38x increase in AUM through disciplined execution across key metropolitan markets and underserved credit segments.

The future projections may be considered as Forward-Looking Statement. They are inherently speculative, and actual future results may differ materially from the predictions based on changing economic or operational assumptions.