Finbud Financial Services Ltd Management Discussions

The following discussion is intended to convey managements perspective on our financial condition and results of operations for the Stub period ended July 31^st 2024 and the period ended 31^st March 2024, 31^st March 2023 and 31^st March 2022. One should read the following discussion and analysis of our financial condition and results of operations in conjunction with the section titled "Restated Financial Information" on page 165 of the Draft Red Herring Prospectus. This discussion contains forward-looking statements and reflects our current views with respect to future events and our financial performance and involves numerous risks and uncertainties, including, but not limited to, those described in the section entitled "Risk Factors" on page 22 of this Draft Red Herring Prospectus. Actual results could differ materially from those contained in any forward-looking statements and for further details regarding forward-looking statements, kindly refer to the chapter titled "Forward-Looking Statements" of this Draft Red

Herring Prospectus. Unless otherwise stated, the Restated Financial Information of our Company used in this section has been derived from the Restated Financial Information. Our financial year ends on March 31 of each year. Accordingly, unless otherwise stated, all references to a particular financial year are to the 12-month period ended March 31 of that year.

In this section, unless the context otherwise requires, any reference to "we", "us" or "our" refers to Finbud financial services Limited with our Subsidiary, on a consolidated basis as on the date of this Draft Red Herring Prospectus. Unless otherwise indicated, Restated Financial Information included herein are based on our Restated Consolidated Financial Statements for Stub period ended July 31^st 2024 and period ended 31st March 2024, 31st March 2023 and 31st March 2022 included in this Draft Red Herring Prospectus beginning on page 165 of this Draft Red Herring Prospectus.

BUSINESS OVERVIEW

Finance Buddha, founded in 2012 by Vivek Bhatia, Parag Agarwal, and Parth Pande, is one of Indias leading retail loan aggregation platforms. Initially started in Bangalore, the company has expanded its operations across the country, covering more than 19,000 postal areas. It serves as a bridge between customers and lenders by offering a variety of loan products, including personal loans, business loans, and home loans, through partnerships with over 100 banks and non-banking financial companies (NBFCs).

The founders bring substantial expertise to the companys operations. Parag Agarwal has over 20 years of experience in investment management, having held senior roles in private equity, including Vice President of Investments at Masan Group and Investment Manager at Avigo. Parth Pande, with his background in digital business management, spent a decade at Citibank, where he managed a large retail asset franchise and a significant loan portfolio. Vivek Bhatia, an entrepreneur with experience in retail financial services distribution, has played a pivotal role in developing the companys operations, human resources, and agent network, particularly in South India. Together, their combined experience and leadership form the solid foundation of Finance Buddhas growth.

Finance Buddha operates with a hybrid customer acquisition strategy that integrates both digital channel and a wide network of external agents i.e., agent channel. This allows the company to reach a broad range of prospective borrowers. Once a customer expresses intent, the platform uses its matchmaking technology to compare loan offers from multiple lenders, advising customers on the most suitable options. The company guides them through the entire loan application process, ensuring a seamless experience until the loan is disbursed. While Finance Buddha doesnt take any credit risk (as the decision to approve or reject a loan rest with the lender), it earns a commission from lenders when a loan is successfully disbursed.

A key differentiator for Finance Buddha is its unique hybrid business model, which combines conventional lending with digital lending. This model allows the company to offer a broad range of loan solutions to different customer segments. The Agent model, which relies on a wide network of agents, enables the company to access a curated audience of customers, often with preliminary checks already completed, leading to higher conversion rates. The digital model aspect, powered by the companys proprietary tech platform, enables the processing and enrichment of customer data using both internal and third-party variables, which is then leveraged for future cross-selling and up-selling opportunities.

This hybrid approach offers a significant advantage over competitors. While many of Finance Buddhas peers focus exclusively on either agent or digital models, Finance Buddhas combination of both allows for better customer lifecycle management and more optimized margins. The Agent model focuses on acquiring a large number of customers with lower profits per loan, while the digital model targets fewer customers but with higher profitability. This balanced strategy allows Finance Buddha to grow and remain profitable in the long term, even as it navigates the competitive loan distribution market in India.

With over 450 employees and 30 offices across the country, and a network of more than 2,500 sales agents, Finance Buddhas expansive reach and personalized service make it a leader in the Indian loan aggregation space. Its ability to integrate traditional and digital approaches, coupled with its focus on customer satisfaction, positions the company as a key player in the future of retail lending in India.

Business Model

FinBud employs a hybrid acquisition model that leverages both traditional (Agent channel) and digital (Digital channel) channels, which provides the flexibility and reach necessary to connect with varied customer demographics.

? Agent-Led Channel : The Agent model capitalizes on a large network of agents to attract customers. Agents conduct preliminary checks and engage with clients in person or over the phone, performing essential initial assessments and connecting them with relevant loan offers. This approach increases conversion rates, reduces customer acquisition costs, and optimizes lender resources.

? Digital Channel : FinBuds digital channel provides a data-driven, automated loan process that enables customers to explore loan products online through our website or mobile app. By leveraging digital marketing strategies and data analytics, we can pre-approve loan amounts for customers based on their financial profiles and streamline their applications.

Below are the details about the revenue in terms of Digital Channel and Agent Channel:

Particulars	July 31 2024		March 31 2024		March 31 2023		March 31 2022
	Amount	In %	Amount	In %	Amount	In %	Amount	In %
Digital Channel	970.0	14.24%	2646.4	13.97	1647.3	12.21%	1203.2	13.71%
Agent Channel	5,841.7	85.76%	16303.4	86.03	11845.3	87.79%	7573.9	86.29%

This dual-channel model enhances FinBuds reach and profitability, balancing high-volume, lower-margin Agent channel sales with targeted, higher-margin digital channel sales.

Revenue Model

FinBuds revenue is generated primarily from commissions on loans disbursed by our partner banks and NBFCs. This commission-based model aligns FinBuds interests with those of its lending partners, encouraging high-quality lead generation and customer retention. Commissions are either a percentage of the loan amount or a fixed fee per disbursed loan, depending on our agreement with the lender.

Product and Product Range

Finance Buddha offers a diverse range of loan products, including personal loans, business loans, and home loans. Personal loans are unsecured and target salaried individuals for various personal needs, with an average ticket size of INR 10 lakhs. Business loans, also unsecured, cater to SMEs seeking capital for working capital, expansion, or inventory purchases, with an average ticket size of INR 20 lakhs. Home loans are secured loans for purchasing homes or mortgaging properties, with ticket sizes varying based on property value. The companys unique hybrid acquisition model, combining agent networks and digital channels, ensures broad customer reach and efficient acquisition. Advanced technological integration and data analytics enhance operational efficiency and customer experience. Finance Buddhas customer-centric approach focuses on offering personalized loan solutions, streamlined processing, and comprehensive post-approval support, ensuring a seamless and transparent borrowing journey.

Below are the details of revenue in terms of product category (Standalone):

Particulars	July 31 2024		March 31 2024		March 31 2023		March 31 2022
	Amount	In %	Amount	In %	Amount	In %	Amount	In %
Personal Loan	4820.1	70.80%	13791.1	72.80%	9848.3	73.00%	6722.3	76.60%
Business Loan	1676.9	24.60%	4215.7	22.20%	2865.7	21.20%	1509.3	17.20%
Home Loan	203.1	3.00%	721.8	3.80%	521.8	3.90%	516.9	5.90%
Others	111.6	1.60%	221.2	1.20%	256.8	1.90%	28.6	0.30%

Key Performance Indicators

Key Performance	31 July 2024	31 March 2024	31 March 2023	31 March 2022
Indicator
Revenue from operations	6,833.51	19,027.22	13,547.82	8,812.02
EBITDA	528.13	1,062.84	432.12	207.07
EBITDA Margin (%)	7.73%	5.59%	3.19%	2.35%
PAT	309.91	593.08	183.60	-0.87
PAT Margin (%)	4.54%	3.12%	1.36%	-0.01%
ROE (%)	20.44%	49.15%	29.93%	-0.20%
ROCE (%)	21.64%	51.36%	25.60%	13.73%

Notes:

? Revenue from operations is the total revenue generated by our Company from the sale of products.

? EBITDA is calculated as Profit before tax + Depreciation & Amortization + Interest Expenses

? EBITDA Margin is calculated as EBITDA divided by Revenue from Operations

? PAT is calculated as Profit before tax Tax Expenses

? PAT Margin is calculated as PAT for the period/year divided by Revenue from Operations.

? Return on Equity is ratio of Profit after Tax and Shareholder Equity

? Return on Capital Employed is calculated as EBIT divided by capital employed, which is defined as shareholders equity plus

Long term debt and Long term provisions.

SIGNIFICANT DEVELOPMENTS SUBSEQUENT TO THE LAST FINANCIAL STATEMENTS

Except as discussed below, As per mutual discussion between the Board of the Company and Book Running Lead Manager, in the opinion of the Board of the Company there have not arisen any circumstances since the date of the last financial statements as disclosed in the Draft Red Herring Prospectus and which materially and adversely affect or is likely to affect within the next twelve months.

? Private Placement: Fundraising through a private placement on 13/09/2024, resulting in Rs.15,69,41,340 in cash.

? Conversion of Preference Shares: Conversion of CCPS into equity shares on 06/11/2024 with no cash impact.

? Bonus Issue: Issuance of bonus shares on 17/12/2024, involving 1,39,84,000 shares, with no cash impact.

For more information, please refer to Capital Structure and Our Management beginning on page no 58 and 145 of this DRHP.

STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

For details in respect of Statement of Significant Accounting Policies, please refer to Annexure A2of Restated Financial Statements under "Restated Financial Information" beginning on page 165 of this Draft Red Herring Prospectus.

FACTORS AFFECTING OUR RESULTS OF OPERATIONS

Our business is subjected to various risks and uncertainties, including those discussed in the section titled "Risk Factors" beginning on page 22 of this Draft Red Herring Prospectus. Our results of operations and financial conditions are affected by numerous factors including the following:

1. Our ability to successfully implement our strategy, our growth and expansion, technological changes.

2. Fail to attract, retain and manage the transition of our management team and other skilled & unskilled employees;

3. Our ability to protect our intellectual property rights and not infringing intellectual property rights of other parties;

4. Ability to respond to technological changes;

5. Failure to comply with regulations prescribed by authorities of the jurisdictions in which we operate;

6. Inability to successfully obtain registrations in a timely manner or at all;

7. General economic and business conditions in the markets in which we operate and in the local, regional and Bombay economies;

8. Our ability to effectively manage a variety of business, legal, regulatory, economic, social and political risks associated with our operations;

9. Recession in the market;

10. Changes in laws and regulations relating to the industries in which we operate;

11. Effect of lack of infrastructure facilities on our business;

12. Our ability to successfully implement our growth strategy and expansion plans;

13. Our ability to attract, retain and manage qualified personnel;

14. Failure to adapt to the changing technology in our industry of operation may adversely affect our business and financial condition;

15. Failure to obtain any approvals, licensees, registrations and permits in a timely manner;

16. Changes in political and social conditions in India or in countries that we may enter, the monetary and interest rate policies of

India and other countries, inflation, deflation, unanticipated turbulence in interest rates, equity prices or other rates or prices;

17. Occurrence of natural disasters or calamities affecting the areas in which we have operations;

18. Conflicts of interest with affiliated companies, the promoter group and other related parties; 19. The performance of the financial markets in India and globally;

20. Any adverse outcome in the legal proceedings in which we are involved;

21. Our ability to expand our geographical area of operation;

DISCUSSION ON THE RESULTS OF OPERATIONS

Particulars	31-Jul- 24	% of Revenue	31-Mar-24	% of Revenue	% Change vis-?-vis FY 2022	31-Mar-23	% of Revenue	% Change vis-?-vis FY 2021	31-Mar- 22	% of Revenue
Income
Revenue from operations	6,833.51	100.00%	19,027.22	99.98%	40.44%	13,547.82	99.93%	53.74%	8,812.02	99.97%
Other income	-	0.00%	3.91	0.02%	-56.45%	8.98	0.07%	290.65%	2.30	0.03%
Total Income	6,833.51	100.00%	19,031.13	100.00%	40.38%	13,556.80	100.00%	53.80%	8,814.32	100.00%
Expenses
Employee benefits expenses	777.27	11.37%	1,815.17	9.54%	25.59%	1,445.29	10.66%	12.08%	1,289.48	14.63%
Finance costs	42.35	0.62%	115.38	0.61%	17.28%	98.38	0.73%	-3.35%	101.78	1.15%
Depreciation and Amortization expenses	38.64	0.57%	107.17	0.56%	19.05%	90.03	0.66%	2.46%	87.87	1.00%
Other expenses	5,528.11	80.90%	16,153.12	84.88%	38.30%	11,679.38	86.15%	59.60%	7,317.77	83.02%
Total Expenses	6,386.36	93.46%	18,190.84	95.58%	36.64%	13,313.08	98.20%	51.34%	8,796.91	99.80%
Restated Profit/(Loss) before tax	447.14	6.54%	840.28	4.42%	244.78%	243.72	1.80%	1299.53%	17.41	0.20%
Tax expense
Current tax	134.91	1.97%	253.89	1.33%	500.49%	42.28	0.31%	1392.77%	2.83	0.03%
Deferred tax (benefit)/charge	2.32	0.03%	-6.69	-0.04%	-137.49%	17.84	0.13%	-0.65%	17.95	0.20%
MAT Credit Entitlement	-	0.00%	-	0.00%	0.00%	-	0.00%	-100.00%	-2.50	-0.03%
Total tax expense	137.23	2.01%	247.20	1.30%	311.20%	60.12	0.44%	228.77%	18.29	0.21%
Share of minority in profit	-	-	-	-	-	-	-	-	-	-
Restated Profit/(Loss) after tax	309.91	4.54%	593.08	3.12%	223.03%	183.60	1.35%	-21177.88%	-0.87	-0.01%

Key components of companys profit and loss statement:

Revenues

Revenue from operations

Our revenue from operation comprises of commission earned from Banks and NBFCs on distribution of 3 primary products - personal loan, business loan and home loans. There are marginal revenues from distribution of other loan products like credit cards, auto loans and insurance cross sell as well.

Particulars	July 31 2024		March 31 2024		March 31 2023		March 2022
	Amount	In %	Amount	In %	Amount	In %	Amount	In %
Personal Loans	4820.1	70.80%	13791.1	72.80%	9848.3	73.00%	6722.3	76.60%
Business loans	1676.9	24.60%	4215.7	22.20%	2865.7	21.20%	1509.3	17.20%
Home Loans	203.1	3.00%	721.8	3.80%	521.8	3.90%	516.9	5.90%
Others	111.6	1.60%	221.2	1.20%	256.8	1.90%	28.6	0.30%

Finance Buddha is operating in two models

1) Agent channel which is primarily agent led and marginal sales (less than 5% of agent sales) being contributed by internal sales team

2) Digital Channel where almost entire sales (~98%) is contributed by internal sales teams

	July 31 2024		March 31 2024		March 31 2023		March 2022
Particulars	Amount	In %	Amount	In %	Amount	In %	Amount	In %
Digital Channel	970.0	14.24%	2646.4	13.97	1647.3	12.21%	1203.2	13.71%
Agent Channel	5,841.7	85.76%	16303.4	86.03	11845.3	87.79%	7573.9	86.29%

Other income

Other income has two main categories:

1. Interest Income on income tax refund and

2. Write back of excess provisioning of commission payable to agents

Expenses

Expenses comprise:

(i) Employee Benefit Expenses,

(ii) Finance Costs covering interest expenses and bank charges;

(iii) Depreciation and Amortization Expenses; and

(iv) Other Expenses such as commission, insurance, power and fuel, professional fees, office expenses, rent, repairs, rates and taxes, travel expenses, miscellaneous costs, communication expenses, marketing and promotion, printing and stationery, subscription charges, and hiring fees.

Employment benefit expenses

Employment benefits include salaries and wages, provident fund and other contributions, staff welfare, and gratuity

Finance costs

Finance costs covering interest expenses and bank charges.

Depreciation and amortization expenses

Depreciation and amortization expense includes depreciation on Computer and Accessories, Electrical items, Furniture and Fixtures, Motor Vehicle, as well as amortization of software.

Other expenses

Other expenses include Commission, Insurance, Power and fuel, Professional fees, Office expenses, Rent, Repairs others, Rates and taxes, traveling expenses, Miscellaneous expenses, Communication expenses, Marketing and business promotion, Printing and stationary, Subscription charges, Hiring Charges.

Primary contributions to other expenses include following:

? Commission includes payments made to agents for the agent business. These agents source customers on behalf of the Company and upon successfully disbursal of loan are paid commission by the Company on the loan amount.

? Marketing and Business promotion includes payments made to freelancers for sourcing customers for the Company. These are generally smaller players in the market who rely heavily on the company for file processing and liasoning with various parties.

? Subscription charges are payments made to vendors for availing various services which are integral in customer management and interaction and thereby resulting in better lead sourcing for the digital segment. These services include dialing costs, SMS services, whatsapp communication. In addition, it also includes payments made for AWS storage, website/email hosting charges etc.

? Rent includes rent paid for offices used by the company for its business operations. For more information, please refer Our business chapter page no 116.

? Professional fees include payments made to vendors for availing technology platforms like CRM, marketing automation platforms, statutory audit fee and payments to advisors for undertaking compliances, statutory filings, accounting assistance.

? Repairs others include repairs and maintenance of office premises, computers and other accessories.

? Rates and taxes include interest on late payment of statutory dues, payments towards municipal taxes for certain office premises.

? Power and Fuel includes electricity expenses for the offices used by the Company.

? Communication expenses include telephony expenses for outbound calling undertaken by the tele sales executives

? Traveling expenses includes local and national travel expenses undertaken by the employees for business purposes

? Printing and Stationary includes expenses for purchase of printing items like cartridges and office stationary items

? Office expenses include expenses for office housekeeping

? Miscellaneous expenses include on various miscellaneous items

? Insurance includes premiums paid for insurance policies

SUMMARY OF MAJOR ITEMS OF INCOME AND EXPENDITURE

FISCAL 2024 COMPARED WITH FISCAL 2023

Revenue from Operation

Our revenue from operations for the period fiscal 2024 stands at Rs 19,027.22 lakhs increased by 40.44% as compared to Fiscal 2023 that is Rs 13,547.82 lakhs.

In fiscal 2024 Digital Channel contributed 13.97% increased by 60.65% as compared to fiscal 2023, Agent Channel contributed 86.03% increased by 37.64% as compared to Fiscal 2023.

Rationale for Increase in the Revenue from Operation for the financial year ended March 31, 2024:

The increase in revenue from operations can be primarily attributed to 3 factors:

1) Manpower increase The Company has invested heavily in building its manpower in the digital team as well as hiring channel managers and backend processing teams for Agent business. The employee strength has increased from 191 to 251. This almost 30% increase is one of the reasons for revenue increase.

2) Agent and Freelancer increase The Agent and freelancer base has increased from 2411 to 2722. This has helped the Company to increase its geographical footprint and customer outreach which has resulted in increased revenue.

3) Lender Addition The company has increased its lender empanelment from 107 to 121. At any given point in time the Company will always have a segment of existing database which is not serviced by the existing list of empanelled lenders. With addition to new lenders some of this database becomes potentially attractive. In addition, ability to showcase more lenders to customers who are in the pipeline increases the approval rates and thereby results in higher revenue with existing infrastructure

Other Income

In fiscal 2024 other income stands for Rs 3.91 lakhs decreased by 56.45% as compared to fiscal 2023 that is Rs 8.98 lakhs. The decrease was on account of lower interest on income tax refund as the income tax refund was processed earlier compared to previous financial year.

Employee Benefit Expenses

Employee benefit expenses for Fiscal 2024 totalled Rs 1,815.17 lakhs, accounting for 9.54% of the companys revenue, reflecting a 25.59% increase from Rs 1,445.29 lakhs in Fiscal 2023. This increase is primarily due to the addition of new manpower as part of the companys growth strategy, along with a general increase in the salaries of existing employees. Key factors contributing to the rise include a Rs 313.33 lakhs increase in salary expenses, driven by higher compensation for both new hires and existing employees, and a Rs 2.25 lakhs increase in contributions to provident and other funds. Staff welfare expenses rose by Rs 46.53 lakhs, reflecting efforts to improve employee benefits, while gratuity expenses increased by Rs 7.76 lakhs, in line with the growing team and long-term employee benefits commitments. For more information, please refer to the Our Business chapter page no 116 of this DRHP.

Finance Costs

In fiscal 2024, finance cost at Rs 115.38 lakhs as compared to Rs 98.38 lakhs in fiscal 2023, saw an increase by Rs 17.00 lakhs in this very fiscal year. The increase in interest expense by Rs.20.90 lakhs in Fiscal 2024 as compared to fiscal 2023, reflects additional borrowings which have increased from Rs 739.77 lakhs to Rs 1242.54 lakhs. The increase in borrowings was to support higher working capital requirements due to increased business volumes. The decrease in bank charges by Rs 3.90 lakhs in fiscal 2024 over fiscal 2023. Bank charges are processing fees paid at the time of availing new loans. In FY 24 new loans availed had dropped compared to previous year and hence there was a drop in bank charges.

Depreciation and Amortization Expenses

In fiscal 2024, the depreciation and amortization expense were Rs 107.17 lakhs, a 19.05% increase compared to Rs 90.03 lakhs in fiscal 2023. This rise was due to the addition of Rs 169.73 lakhs in tangible assets.

	GROSS BLOCK				DEPRECIATION				NET BLOCK
Particular s	As at 1 April 2023	Addition s	Deletion s	As at 31 March 2024	As at 1 April 2023	Deletion s	For the year 2023- 24	As at 31 March 2024	As at 31 March 2024	As at 31 March 2023
Computer & Accessorie s	317.39	78.23	-	395.61	238.48	-	70.61	309.09	86.52	78.90
Electrical Items	41.62	0.17	-	41.79	28.89	-	5.44	34.34	7.45	12.73
Furniture & Fixtures	436.84	91.34	-	528.18	317.85	-	29.17	347.03	181.15	118.98
Motor Vehicle	8.30	-	-	8.30	1.14	-	1.86	2.99	5.31	7.17
Software	7.54	-	-	7.54	7.38	-	-	7.38	0.16	0.16
Total	811.68	169.73	-	981.42	593.75	-	107.08	700.83	280.59	217.94

Other Expenses

In fiscal 2024, total expenses amounted to Rs 16153.12 lakhs, marking a 38.30% increase from Rs 11679.38 lakhs in fiscal 2023. This rise reflects several key changes:

? Commission increased by 42.84% which is the major contributor towards offline sales. The increase in commission expenses is almost proportionate to the increase in offline sales by ~37%

? Insurance decreased by 6.09% due to the fall in insurance premiums.

? Power and fuel increased by 23.72% due to opening up of new offices. The company had a net addition of 10 offices in FY24 which contributed towards higher electricity charges.

? Professional fees increased by 11.08% led by higher digital/online revenues.

? Office expenses increased by 87.29% due to increased manpower and opening up of new offices as highlighted earlier

? Rent increased by 32.50% due to new offices being opened and regular rental increase clauses in the agreements

? Rates and taxes increased by 73.23% due to a one time interest on late fee payment of statutory dues and ineligible GST input credit expenses

? Traveling expenses increased by 84.04% driven by higher travel costs by employees and intercity travels

? Communication expenses increased by 16.49% to sustain higher business volumes

? Marketing and business promotion increased by 16.19% which is the second biggest contributor towards offline sales. It is to be noted that the increase is much lesser than the overall growth in offline sales due to economies of scale and better efficiencies

? Printing and stationary increased by 13.15% to sustain higher business volumes

? Subscription charges increased by 386.16% which is primarily driven due to further adoption of efficient automated customer communication and management tools like whatsapp, SMS, IVR etc. These services has helped us significantly in scaling up our digital revenues by increasing customer reach and conversions.

Tax Expenses

In fiscal year 2024, our total tax expense surged by Rs 187.08 lakhs, representing a 311.20% increase from Rs 60.12 lakhs in fiscal year 2023 to Rs 247.20 lakhs in fiscal year 2024. This was primarily due to increase in current tax expenses during the year which got increased from Rs 60.12 lakhs in fiscal year 2023 to Rs 253.89 lakhs in the fiscal 2024 and decrease in deferred tax from Rs 17.84 lakhs in fiscal 2023 to Rs (137.49) %.

Profit after Tax

For the various reasons discussed above, and following adjustments for tax expense, we recorded an increase in profit; from profit of Rs 183.60 lakhs in fiscal 2023 to profit of Rs 593.08 lakhs in fiscal 2024. Profit after tax as a percentage of total revenue stood at 3.12% for Fiscal 2024 versus 1.35% for Fiscal 2023.

Rational for Increase in the Profit after Tax for the Fiscal Year 2024:

? Robust Revenue Growth: Revenue increased by 40.54%, indicating strong demand, and successful expansion strategies that contributed to higher sales.

? Enhanced Profitability through Operational and Financial Efficiency: Our core profitability has significantly improved, with the EBITDA margin rising from 3.19% to 5.58%, driven by effective cost control and operational enhancements. Furthermore, the EBIT margin increased from 2.52% to 5.02%, largely due to a decrease in depreciation as a percentage of revenue, which allowed a larger share of revenue to contribute to operating income. In addition, finance costs were effectively managed, this resulted in an increased EBT margin from 1.80% to 4.42%, demonstrating our ability to optimize financing expenses in relation to our expanding revenue base.

? Realization of Economies of Scale: Higher sales volumes enabled a reduction in per-unit fixed costs, resulting in economies of scale that boosted profitability.

FISCAL 2023 COMPARED WITH FISCAL 2022

Revenue from Operation

Our revenue from operations for the period fiscal 2023 stands for Rs 13547.82 lakhs and increased by 53.74% as compared to fiscal 2022 that is Rs 8812.02 lakhs.

In fiscal 2023 online sales (Digital lending) contributed 12.21% increased by 36.91% as compared to fiscal 2023, offline (Agent led) contributed 87.79% and increased by 56.40% as compared to Fiscal 2023.

Rationale for Increase in the Revenue from Operation for the financial year ended March 31, 2023:

The increase in revenue from operations can be primarily attributed to 3 factors:

1) No Impact of COVID In the previous financial year, the revenues for the months of April-June 2021 had taken a severe hit due to COVID-2 related disruptions. FY23 was the first full year of operations without any lockdowns due to COVID and hence we saw jump in revenues as the overall economy wanted to make up for the lost opportunities of the previous 2 years.

2) Agent and Freelancer increase The Agent and freelancer base has increased from 2147 to 2411. This has helped the Company to increase its geographical footprint and customer outreach which has resulted in increased revenue.

3) Lender Addition The company has increased its lender empanelment from 96 to 107. At any given point in time the Company will always have a segment of existing database which is not serviced by the existing list of empanelled lenders. With addition to new lenders some of this database becomes potentially attractive. In addition ability to showcase more lenders to customers who are in the pipeline increases the approval rates and thereby results in higher revenue with existing infrastructure

Other income

In fiscal 2023 other income stands for Rs 8.98 lakhs increased by 38.74% as compared to fiscal 2022 that is Rs 6.68 lakhs. In this fiscal other income consists of Interest income over Fiscal 2022 which also includes write back. The increase reflects the following points:

? Interest income increased by Rs 8.76 lakhs over fiscal 2022. The increase reflects income tax returns of 2 years being processed in the same financial year and thereby higher interest on income tax refund.

? Write back in fiscal 2023 of Rs 2.08 lakhs

Employee Benefit Expenses

Employee benefit expenses as of Fiscal 2023, accounting for 10.66% of our revenue that is Rs 1445.29 lakhs, saw an 12.08% increase over Fiscal 2022 that is Rs 1289.48 lakhs. The overall increase in employee benefit expense was inspite of a reduction in staff strength from 223 to 191. However, the Company had invested heavily in its senior management employees and beefed up team leader positions alongwith introducing attractive incentive schemes for top performing employees which resulted in overall increase in employee benefit expenses.

Finance Costs

In fiscal 2023, finance cost at Rs 98.38 lakhs as compared to Rs 101.78 lakhs in fiscal 2022, decreased by Rs 3.40 lakhs. The reason for decrease reflects the following points: Decrease in Interest Expense by Rs 7.90 lakhs due to better debt management by refinancing high cost debt with low cost debt. Increase in Bank charges Rs 4.49 lakhs

Depreciation and Amortization Expenses

In fiscal 2023 the depreciation and Amortization expense was Rs 90.03 lakhs as compared to fiscal 2022 which was Rs 87.87, saw an increase of 2.46% over the fiscal 2022. This reflects the addition of Rs 154.87 lakhs over the fiscal 2022 in tangible assets.

Particulars	GROSS BLOCK				DEPRECIATION				NET BLOCK
	As at 1 April 2022	Additions	Deletions	As at 31 March 2023	As at 1 April 2022	Deletions	For the year 2022- 23	As at 31 March 2023	As at 31 March 2023	As at 31 March 2022
Computer & Accessories	249.66	67.73	-	317.39	198.79	-	39.69	238.48	78.90	50.87
Electrical Items	29.38	12.24	-	41.62	24.80	-	4.09	28.89	12.73	4.58
Furniture & Fixtures	369.99	66.85	-	436.84	271.98	-	45.87	317.85	118.98	98.00
Motor Vehicle	1.20	7.10	-	8.30	0.81	-	0.33	1.14	7.17	0.40
Software	7.54	-	-	7.54	7.38	-	-	7.38	0.16	0.16
Total	657.76	153.92	-	811.68	503.76	-	89.99	593.75	217.94	154.00

Other Expenses

In fiscal 2023, our expenses totalled Rs 11679.38 lakhs, which is a 59.60% increase from Rs 7317.77 lakhs in fiscal 2022. The main reason for this increase includes:

? Commission increased by 90.87% which is the major contributor towards offline sales. The increase in commission expenses was higher than the 56% increase in offline sales because FY 23 was the first full year of normal operations post COVID and the company wanted to increase the overall scale of operations so as to achieve higher payout slabs from lenders. As a result we had to pay higher commission to agents. Also as a strategy the company had decided to increase its presence in the Business Loan segment for which it had to pay higher commission in the initial stages to acquire market share and establish credibility. As a result the Company has established solid presence in Business Loan segment and the contribution in total sales has seen an uptrend.

? Insurance decreased by 17.06% due to lower premium payments.

? Power and fuel increased by 47.41% due to opening up of new offices

? Professional fees decreased by 18.03% due to cost savings on outsourced IT contract.

? Office expenses increased by 123.31% on a low base effect

? Rent increased by 24.27% due to new offices being opened and regular rental increase clauses in the agreements

? Rates and Taxes increased by 64.55% due to increase in ineligible GST input credit on expenses.

? Repairs increased by 27.61% due to opening up of new offices

? Traveling expenses decreased by 34.48% due to rationalization of costs

? Communication expenses increased by 14.78% to sustain higher business volumes

? Marketing and business promotion increased by 17.76% which is the second biggest contributor towards offline sales. It is to be noted that the increase is much lesser than the overall growth in offline sales due to economies of scale and better efficiencies.

? Subscription charged increased by 408.81% because in FY23 the company introduced for the first time automated customer interaction module via whatsapp, SMS, IVR etc.

Tax Expenses

In fiscal year 2023, our total tax expense increased by Rs 39.33 lakhs, representing a 228.77% increase from Rs 60.12 lakhs in fiscal year 2023 to Rs 18.29 lakhs in fiscal year 2022. This was primarily due to increase in current tax expenses during the year which got increased from Rs 2.83 lakhs in fiscal year 2022 to Rs 42.28 lakhs in the fiscal 2023 and decrease in deferred tax from Rs 17.95 lakhs in fiscal 2022 to Rs 17.84 lakhs in fiscal 2023.

Profit after Tax

For the various reasons discussed above, and following adjustments for tax expense, we recorded profit; from loss of Rs (0.87) lakhs in fiscal 2022 to profit of Rs 183.60 lakhs in fiscal 2023. Profit after tax as a percentage of total revenue stood at 1.35% for Fiscal 2023 versus (0.01)% for Fiscal 2022.

Rational for Increase in the Profit after Tax for the Fiscal Year 2023:

1.Increase in Revenue: Revenue increased by 53.74% over fiscal 2022.

2.Improved operational efficiency: Core profitability showed substantial gains, with the EBITDA margin climbing from 2.35% to 3.19%. This increase reflects effective cost management and improved operational efficiencies. Additionally, the EBIT margin improved from 1.35% to 2.52%, primarily due to disciplined control over operating expenses, which allowed a greater portion of revenue to contribute to operating income. Furthermore, the EBT margin saw a significant increase from 0.20% to 1.80%, highlighting our ability to manage finance costs effectively in relation to revenue growth, thus enhancing our pre-tax earnings.

Cash Flows

Particulars	July 31 2024	March 31 2024	March 31 2023	March 31 2022
Net Cash from Operating Activities	(343.30)	(209.75)	268.83	188.12
Net Cash from Investing Activities	(40.28)	(165.83)	(145.90)	(78.48)
Net Cash used in Financing Activities	145.84	387.39	82.92	(201.53)

Cash Flows from Operating Activities

For the financial year ended March 31, 2024

Our net cash used from operating activities was Rs (209.75) Lakhs for the financial year ended March 31, 2024. Our operating profit before working capital changes was Rs 1058.93 Lakhs for the financial year ended March 31, 2024, which was primarily adjusted against increase in trade receivables by Rs 1180.65 lakhs, increase in loans and advances by Rs 305.71 lakhs, increase in other current assets by Rs 208.98 lakhs, increase in non-current assets by Rs 6.69 lakhs, increase in Trade payables by Rs 430.60 lakhs, increase in other current liabilities by Rs 10.86 lakhs, increase in short term provisions by Rs 213.99 lakhs, and increase in long term provisions by Rs 25.10 lakhs.

For the financial year ended March 31, 2023

Our net cash used from operating activities was Rs 268.83 Lakhs for the financial year ended March 31, 2023. Our operating profit before working capital changes was Rs 423.15 Lakhs for the financial year ended March 31, 2023 which was primarily adjusted against increase in Trade receivable by Rs 328.23 lakhs, decrease in loans and advances by Rs 263.19 lakhs, increase in other current assets by Rs 13.13 lakhs, decrease in non-current assets by Rs 17.84 lakhs, increase in trade payable by Rs 113.25 lakhs, decrease in other current liabilities by Rs 125.65 lakhs, decrease in short term provisions by Rs 39.41 lakhs and increase in long term provisions by Rs 17.94 lakhs.

For the financial year ended March 31, 2022

Our net cash used from operating activities was Rs 188.12 Lakhs for the financial year ended March 31, 2022. Our operating profit before working capital changes was Rs 207.27 Lakhs for the financial year ended March 31, 2022 which was primarily adjusted against increase in trade receivables by Rs 538.42 lakhs, decrease in loans and advances by Rs 72.84 lakhs, increase in other current assets by Rs 149.12 lakhs, decrease in other non-current assets by Rs 17.95 lakhs, increase in trade payables by Rs 433.83 lakhs, increase in other current liabilities by Rs 151.47 lakhs, decrease in short term provisions by Rs 5.67 lakhs and increase in long-term provisions by Rs 18.75 lakhs.

Cash Flows from Investment Activities

For the financial year ended March 31, 2024

Our net cash flow from investing activities was Rs (165.83) lakhs. This was mainly on account of Purchase of Property, plant and equipment of Rs 169.73 lakhs, Interest Received of Rs 3.91 lakhs.

For the financial year ended March 31, 2023

Our net cash flow from investing activities was Rs (145.90) lakhs. This was mainly on account of the Purchase of Property, plant and equipment of Rs 154.87 lakhs, Interest Received of Rs 8.98 lakhs.

For the financial year ended March 31, 2022

Our net cash flow from investing activities was Rs (78.48) lakhs. This was mainly on account of the Purchase of Property, plant and equipment of Rs 80.78 lakhs, Interest Received of Rs 2.30 lakhs.

Cash Flows from Financing Activities

For the financial year ended March 31, 2024

Our net cash flow from financing activities was Rs 387.39 lakhs. This was on account of repayment of long-term borrowings of Rs 93.52 lakhs, proceeds from Short-term borrowings of Rs 596.29 Lakhs and Interest paid of Rs 115.38 lakhs.

For the financial year ended March 31, 2023

Our net cash flow from financing activities was Rs 82.92 lakhs. This was on account of Proceeds from Long-Term borrowings of Rs 266.56 Lakh, Repayment of Short-term borrowings of Rs 85.26 lakhs and Interest Paid of Rs 98.38 lakhs.

For the financial year ended March 31, 2022

Our net cash flow from financing activities was Rs (201.53) lakhs. This was on account of Buy back of shares of Rs 50.04 lakhs, Repayment of long term borrowings of Rs 180.35 lakhs, Proceeds from short term borrowings of Rs 130.65 lakhs and Interest Paid of Rs 101.78 lakhs.

INFORMATION REQUIRED AS PER ITEM (II) (C) (I) OF PART A OF SCHEDULE VI TO THE SEBI REGULATIONS:

1. Unusual or infrequent events or transactions

Except as described in this Draft Red Herring Prospectus, Our Company has not engaged in any transactions or events during the periods under review that, in our best judgment, would be considered unusual or infrequent.

2. Significant economic changes that materially affected or are likely to affect income from continuing operations

Other than as described in the "Risk Factors" beginning on page 22 of this Draft Red Herring Prospectus, to our knowledge there are no known significant economic changes that have or had or are expected to have a material adverse impact on revenues or income of our Company from continuing operations.

3. Known trends or uncertainties that have had or are expected to have a material adverse impact on sales, revenue or income from continuing operations

Other than as described in this Draft Red Herring Prospectus, particularly in the sections "Risk Factors" on pages 22 , respectively, to our knowledge, there are no known trends or uncertainties that are expected to have a material adverse impact on our revenues or income from continuing operations.

4. Income and Sales on account of major product/main activities (Standalone):

Particulars	July 31 2024		March 31 2024		March 31 2023		March 2022
	Amount	In %	Amount	In %	Amount	In %	Amount	In %
Personal Loans	4820.1	70.8%	13791.1	72.8%	9848.3	73.0%	6722.3	76.6%
Business loans	1676.9	24.6%	4215.7	22.2%	2865.7	21.2%	1509.3	17.2%
Home Loans	203.1	3.0%	721.8	3.8%	521.8	3.9%	516.9	5.9%
Others	111.6	1.6%	221.2	1.2%	256.8	1.9%	28.6	0.3%

For a detailed breakdown of the revenue by major products and main activities, please refer to the "Our Business" chapter on page 116 of this Draft Red Herring Prospectus.

5. Future relationship between Costs and Income

Our Companys future costs and revenues will be determined by the growth of the industry in which we operate.

6. Extent to which material increases in net sales or revenue are due to increased sales volume, introduction of new products or services or increased sales prices.

Increases in our revenues are by and large linked to increases in the volume of business.

7. Status of any publicly announced new products or business segments

Our Company has not announced any new products, services, or business segments that are separate from our ongoing operations, as detailed in the "Our Business" section on page 116 of this Draft Red Herring Prospectus. However, it is pertinent to note that Our Company regularly engages in research and product development and improvements so as to meet customer needs and market trends.

8. The extent to which the business is seasonal

Our business is subject to seasonality. We see an increase in our business before Diwali, wedding seasons, and during end of season sales. For a detailed understanding please refer to the "Risk Factor" on page of this Draft Red Herring Prospectus.

9. Any significant dependence on a single or few suppliers or customers

Our Company is significantly dependent on a few suppliers. For further details, refer to the chapter titled "Risk factors" on page 22 of Draft Red Herring Prospectus.

10. Competitive Conditions

Competitive conditions have been discussed in sections titled "Our Business" and "Our Industry" on pages 116 and 106 of this Draft Red Herring Prospectus.