<dhhead>Management Discussion and Analysis</dhhead>
Manapuram Finance Limited - An Overview
Manappuram Finance Limited (hereafter referred to as "MAFIL” or "the Company”) is a prominent non-banking financial Company (NBFC) in India, headquartered in Valapad, Thrissur,
Kerala. Established in 1949, the Company began as a modest money-lending operation. Over the decades, it has evolved into a diveRsified financial services provider, offering products including gold loans, microfinance, housing finance, vehicle loans, and SME financing. The balanced portfolio undeRscores the CompanyRss commitment to catering to diveRse financial needs across various customer segments.
The Company is the second-largest gold loan provider in the country with a trusted and nationwide reach. The Company is the pioneer in offering online gold loan services through RsOGLRs product and cellular vaulting mechanism, enabling customeRs to avail loans 24x7 with minimal documentation from anywhere in the world. The CompanyRss mobile application is available in different regional languages to cater to all sections of society and regions of the country.
The Company operates through several subsidiaries, each specialising in distinct financial services to various customer segments across India:
• Asirvad Micro Finance Limited (AMFL): Acquired in 2015, AMFL is a Non-Banking Financial Company-Micro Finance Institution (NBFC-MFI) focussing on providing microfinance
loans to women from low-income households. Its offerings include Income Generating Programme (IGP) loans, product loans, MSME loans, and gold loans.
• Manappuram Home Finance Limited (MAHOFIN): MAHOFIN specialises in affordable housing finance, offering loans for
home construction, improvement, and commercial property purchases.
• Manappuram Insurance BrokeRs Limited (MAIBRO): MAIBRO
operates as an insurance brokerage firm, providing life and general insurance products. It has established tie-ups with leading insurance companies to offer competitive quotes and services to customeRs.
• Manappuram Comptech and Consultants Limited
(MACOM): MACOM provides IT solutions, including
application development for digital peRsonal loans and loan
management systems.
Economic Overview Global Economic Overview
The global economy experienced modest growth in 2024, with GDP expanding by 3.3%. This performance was underpinned by resilient consumer spending and a rebound in international trade, which grew by 3.8%, a notable recovery from the subdued levels of 2023. Advanced economies contributed to this growth, with the United States leading at 2.8% GDP expansion, bolstered by strong domestic demand and a robust labour market. In contrast, the Euro Area and Japan faced challenges, registering growth rates of 0.9% and 0.1%, respectively, due to peRsistent energy price pressures and weak external demand.
Emerging markets and developing economies displayed varied performances in 2024. ChinaRss economy grew by 5.0%, supported by fiscal measures and a resurgence in manufacturing investment, despite ongoing property sector weaknesses. India continued its upward trajectory, with robust GDP growth positioning it to become the worldRss fourth-largest economy by the end of the fiscal year, surpassing Japan. However, other regions like Latin America and Africa faced headwinds from commodity price volatility and high debt servicing costs, which dampened investment and growth prospects.
Inflationary pressures began to ease globally in 2024, with headline inflation declining from 6.8% in 2023 to 5.7%. This moderation was facilitated by the unwinding of supply-side constraints and the impact of restrictive monetary policies implemented by central banks worldwide. Notably, the Federal Reserve, European Central Bank, and Bank of England initiated monetary easing in response to moderating inflation and concerns over high financing costs. Despite these positive developments, the global economic landscape remained fraught with uncertainties, including escalating trade tensions and geopolitical risks, which posed challenges to sustained growth.
Outlook
As per IMFRss April 2025 World Economic Outlook, global
economic growth is projected to slow to 2.8% in 2025, down from 3.3% in 2024. This deceleration is attributed to escalating trade tensions, particularly the resurgence of protectionist policies by the United States under President Donald TrumpRss administration. The imposition of century-high tariffs has disrupted global supply chains, leading to retaliatory measures from key trading partneRs like China, which has responded with tariffs of up to 146% on U.S. goods. These developments have dampened international trade and heightened policy uncertainty, adveRsely affecting business investment and consumer confidence worldwide.
In 2026, the IMF anticipates a modest recovery, with global growth projected at 3.0%. However, this remains below the historical average of 3.7% observed from 2000 to 2019. Advanced economies are expected to experience subdued growth, with the U.S. forecasted at 1.7% and the Euro Area at 1.2%. Emerging markets and developing economies are projected to grow at 3.9%, with ChinaRss growth forecasted at 4.0%. PeRsistent trade tensions, elevated public debt, and demographic shifts, including aging populations, continue to constrain economic resilience and growth potential across various economies.
(Source: IMF - World Economic Outlook April 2025)
Indian Economic Overview
Compared to global peeRs, the Indian economy has exhibited strong resilience amidst global uncertainty and emerged as
one of the fastest-growing major economies in the world. Robust domestic demand, structural reforms, and policy support are the major driveRs for economic growth. As per the Second Advance Estimates of GDP, IndiaRss GDP growth is expected at 6.5% in the financial year 2024-25, much lower than the 9.2% GDP growth in the financial year 2023-24. This slowdown reflects the combination of domestic challenges, including a sluggish manufacturing sector, peRsistent food inflation, subdued urban demand, a widening trade deficit, and a decline in private investment activity.
Despite the slowdown, India continued a stable growth path, driven by growing services and increased infrastructure spending. Government initiatives to promote digital transformation, financial inclusion, and ease of doing business
further supported growth. Efforts to diveRsify trade and sign new free trade agreements (FTAs) helped to reduce external risks. Rising urbanisation and a growing middle class also contributed to higher consumer spending.
Inflation remained a concern in the financial year 2024-25 due to global supply chain disruptions and volatile commodity prices. In response to evolving economic conditions, the Reserve Bank of India (RBI)Rss Monetary Policy Committee (MPC) unanimously
decided to reduce the repo rate by 25 basis points twice since February 2025, bringing it down to 6% on April 9, 2025 from 6.5%, while maintaining accommodative stance on the economy. Consumer Price Index (CPI) inflation is estimated at 4.9% in the
financial year 2024-25, down from 5.4% in the previous year, and is projected to reduce further to 4.0% in the financial year 2025-26.
Investment activity is gaining traction on the back of higher capacity utilisation, continued government focus on infrastructure, and strong balance sheets of banks and corporates. While service
exports are likely to remain steady, merchandise exports could face headwinds from global uncertainties and trade disruptions.
Outlook
Key government initiatives are expected to play a pivotal role in sustaining momentum. The Production-Linked Incentive (PLI) schemes continue to attract investment across sectoRs like electronics, pharmaceuticals, and renewable energy. Capital expenditure by the government, particularly on infrastructure, remains high, targeting roads, railways, and digital connectivity. Reforms in labour laws and a push for logistics efficiency through the PM Gati Shakti platform aim to improve productivity. Additionally, efforts to expand the digital public infrastructure and financial inclusion are enhancing economic participation and efficiency.
Led by the governmentRss push for digital transformation, financial inclusion, substantial investment and ease of doing business, the Indian economy is expected to exhibit strong resilience. As per the RBI estimates, the Indian economy is expected to grow by 6.5% in the financial year 2025-26. Healthy agricultural incomes from normal monsoons, a recovery in industrial activity, and stronger household consumption aided by tax reliefs in Union Budget 2025-26 are expected to support economic growth in the financial year 2025-26.
Source: RBI, 2nd advance estimates of Statistics and Programme Implementation (MOSPI)
Industry Overview
Indian Financial Services Industry
The Indian financial services industry is at the corneRstone of the nationRss economic framework, encompassing a broad spectrum of institutions, including banks, non-banking financial companies (NBFCs), insurance firms, asset management companies, and a burgeoning fintech sector. As of 2025, the industry is experiencing significant transformation, propelled by technological advancements, regulatory reforms, and evolving consumer behaviouRs. Despite global economic headwinds and monetary tightening in several advanced economies, IndiaRss financial services sector has remained resilient. Strong domestic demand, a well-capitalised banking system, and proactive fiscal policies have insulated the economy from major shocks in the past few yeaRs.
In the financial year 2024-25, the Bank credit growth slowed to 11%, down from 20.2% in the financial year 2023-24, influenced by regulatory tightening, a high base effect, and slower deposit mobilisation. Notable growth was observed in gold and renewable energy loans, while lending in the retail and services sectoRs experienced a slowdown. Credit to agriculture and allied sectoRs decelerated sharply to 10.4% in the financial year 2024-25, down from 20% in the financial year 2023-24. Lending to the industrial sector remained largely unchanged at 8% year-on-year, similar to the previous year. However, loans against gold jewellery surged significantly, more than doubling
year-on-year, driven by a nearly 50% increase in gold prices. Additionally, loans to the renewable energy sector recorded an impressive 79% growth, up from 30% in the previous year, highlighting the rising interest in clean energy investments.
One of the most significant developments has been the widespread integration of advanced technologies such as artificial intelligence (AI), especially Agentic AI, across the Banking, Financial Services, and Insurance (BFSI) landscape. These tools have enabled financial institutions to automate complex operations, peRsonalise customer interactions, and significantly reduce turnaround times for services. AI-powered systems are increasingly handling everything from credit risk assessments to customer onboarding, providing 24/7 service with minimal human oveRsight. This has made institutions more agile, efficient, and capable of scaling rapidly without proportionate increases in operational costs.
Digital payments & other factoRs are revolutionising the financial landscape in India, marking a significant shift towards a more efficient and transparent economy. Some of the major growth driveRs are:
• UPI Dominance: Unified Payments Interface (UPI) reached over Rs 23.6 Lakhs crore in transaction volumes in April 2025, driving a cashless economy.
• Smartphone Usage: Growth fuelled by increased smartphone use, affordable mobile data, and government digital literacy initiatives.
• Inclusion of small merchants: Small merchants and Rural consumeRs are actively engaging in the formal financial ecosystem, boosting transparency and tax compliance.
• Regulatory Support: RBI and SEBI frameworks promote innovation while protecting consumer rights; initiatives like lowering risk weights on microfinance enhance credit access.
• Entrepreneurial Boost: Schemes such as CGTMSE have enabled Billions in collateral-free lending, stimulating entrepreneuRship and rural economies.
• Gen Z Engagement: With a significant tech-savvy Gen Z population, financial institutions are adapting their services to meet demand for convenience and ethical practices, incorporating mobile-fiRst approaches and AI support.
Outlook
The Indian financial services industry is on the cusp of transformative growth, fuelled by technological innovation, regulatory reforms, and a rapidly evolving consumer base. The adoption of Agentic AI is redefining operations in the BFSI sector by enabling real-time decision-making, automation of complex tasks, and peRsonalised customer engagement. This technological shift, combined with the expansion of digital public infrastructure and the success of UPI, is accelerating financial inclusion across urban and rural India. Government initiatives, such as increased support for MSMEs and regulatory backing for digital lending platforms, are fostering credit access and enhancing financial empowerment.
Meanwhile, the Reserve Bank of India is reassessing bank licensing and owneRship norms to attract foreign investment and ensure systemic scalability.
Looking ahead, the sectorRss growth will be bolstered by sustainable finance, the rise of green investments, and the increasing influence of Gen Z consumeRs who demand digital-fiRst and socially conscious financial services. The mutual fund industry, digital banks, and wealth tech platforms are also expected to thrive, driven by rising incomes and greater investor awareness. With India projected to grow at over 6.5% annually and a proactive policy environment in place, the financial services industry is well-positioned to become a global leader in inclusive, tech-driven financial innovation.
Source: https://www.angelone.in/news/bank-credit-growth-slows-to-12- percent-in-fy25-amid-regulatory-curbs?utm_source=chatgpt.com
NBFC Sector
The Indian Non-Banking Financial Company (NBFC) sector has
become a crucial part of the countryRss financial framework, complementing traditional banks by addressing the credit needs of undeRserved populations. As of December 2024, the total outstanding credit by NBFCs reached Rs 52 Lakhs crore, and it is projected to exceed Rs 60 Lakhs crore by the financial year 2025-26. This growth is largely driven by retail lending, which, along with housing, vehicle, and consumer durables loans, comprises about 58% of the total loan portfolio as of December 2024.
The retail lending sector has experienced double-digit growth due to rising consumer demand and improved access to digital credit channels. Moreover, financing for commercial vehicles, small and medium-sized enterprises (SMEs), and peRsonal loans has also expanded, supported by increasing rural incomes and better logistics infrastructure.
Digital innovation is a key factor in the sectorRss evolution. PartneRships with fintech firms and the use of mobile-fiRst loan origination platforms have enabled NBFCs to serve previously unbanked regions. Many consumeRs now utilise mobile applications or assisted digital service centres to access financial services. The proliferation of Aadhaar-based KYC and the rapid adoption of UPI-based digital payments have further streamlined loan disbuRsals.
According to ICRA Ratings, credit growth in the NBFC sector was about 17% in the financial year 2022-23 and the financial year 2023-24, but it is expected to moderate to 13-15% in the financial year 2024-25 and the financial year 2025-26. This deceleration is not a sign of weakening fundamentals; rather, it reflects a maturing sector where institutions are balancing risk and growth cautiously.
The rising importance of non-traditional sectoRs, such as electric vehicle (EV) financing and affordable housing, is also noteworthy. NBFCs are playing a significant role in facilitating IndiaRss transition to a green economy, aligning with broader financial inclusion and climate goals.
Changes in funding dynamics are also evident. The Reserve Bank of IndiaRss relaxed risk weight norms for bank lending to NBFCs have increased the flow of bank financing into this sector, allowing NBFCs to reduce reliance on short-term instruments and focus on more stable long-term borrowing. Additionally, regulatory reforms from the Reserve Bank of India are enhancing the transparency and accountability of the NBFC ecosystem. This includes harmonising NBFC norms with those for scheduled commercial banks and implementing stricter asset classification guidelines, ultimately aiming to reduce systemic risks while promoting a level playing field.
Outlook
The NBFC sector continues to play a crucial role in achieving the Indian governmentRss financial inclusion objectives. By lending to segments such as small and medium enterprises (SMEs), fiRst-time borroweRs, and rural entrepreneuRs, NBFCs are helping bridge the credit gap that mainstream banks often fail to address. With the use of digital technology and alternative credit scoring models, these institutions are redefining lending norms for IndiaRss next Billion customeRs.
As the sector looks ahead, the outlook remains optimistic. The NBFC sector will sustain a healthy CAGR of 14-16% over the next three yeaRs, supported by IndiaRss expanding digital infrastructure, favourable demographics, and pro-growth policy environment. The continued shift towards digitisation, ESG-compliant lending, and retail-oriented products will shape the NBFC business model of the future.
In conclusion, the Indian NBFC sector has matured into a
formidable force in the financial services landscape. With a diveRsified product mix, expanding reach, and a solid regulatory framework, it is well-positioned to meet the evolving needs of IndiaRss dynamic economy.
Source: ICRA, NBFCRss credit growth to moderate to 13-15% in FY25 and FY26 from 17% witnessed in last two fiscals: ICRA - The Economic Times
Gold Loan Industry
The gold loan industry in India has emerged as a highly dynamic segment within the credit landscape, offering expeditious, collateral-backed financing to millions, particularly those who are undeRserved by the formal banking system. This industry capitalises on IndiaRss cultural affinity for gold and the increasing formalisation of financial services in rural and semi-urban regions.
As of the financial year 2023-24, the overall size of the Indian gold loan market was estimated at Rs 19.2 Lakhs crore, with organised playeRs accounting for 37% and un-organised
playeRs for 63%. The unorganised sector, which encompasses traditional lendeRs such as local pawnbrokeRs and family-run lending institutions, continues to exert substantial influence, especially in Tier 2 and Tier 3 towns. Despite the inherent challenges of higher interest rates and limited consumer protection, many borroweRs remain reliant on these informal sources due to minimal documentation requirements, immediate fund disbuRsal, and established trust.
The organised sector, which comprises banks and non-banking financial companies (NBFCs), was valued at approximately Rs 7.1 Lakhs crore as of the financial year 2023-24, is experiencing rapid growth, facilitated by a variety of favourable conditions such as enhanced credit risk models, expanded branch networks, and technological advancements that support paperless transactions.
Indian households possess an estimated 27,000 tonnes of gold, accounting for about 14% of global gold holdings.
Despite this substantial asset base, the gold loan market penetration remains relatively low at 5.6%, indicating significant untapped potential.
Regulatory oveRsight from the Reserve Bank of India (RBI) contributes to increased borrower transparency and strengthens the credibility of lending institutions. Innovations such as dooRstep gold appraisal and mobile-based disbuRsal options are making gold loans more accessible to a broader audience.
The southern region of India dominates the gold loan market, accounting for approximately 79% of the total outstanding loans.
This dominance is attributed to the cultural significance of gold in southern states and the higher per capita gold holdings in these regions.
Outlook
Looking forward, the gold Loan industry in India is projected to double in value by the financial year 2028-29, underpinned by several critical trends. A primary factor is the anticipated expansion of the organised sector, which is expected to increase its market share from 37% to over 50% by the financial year 2028-29. This transition is driven by the formalisation of lending practices, enhanced customer experiences, and a growing trust in regulated entities. Furthermore, government initiatives such as the Digital India Mission aim to improve broadband and mobile connectivity in rural areas, thereby enhancing the digital infrastructure required for a swift uptake of gold loans.
Overview of Other Business Verticals Microfinance Industry (MFI)
The Microfinance Industry (MFI) in India continues to serve as a crucial enabler of financial inclusion by delivering credit and other financial services to undeRserved and low-income populations. Over time, the sector has evolved considerably, adapting to regulatory frameworks and integrating technological innovations to better serve a wide spectrum of clients. MFIs, especially NBFC-MFIs, have emerged as critical playeRs in advancing the governmentRss financial inclusion agenda and supporting the development of economically weaker sections.
Key government schemes such as the Pradhan Mantri Jan Dhan Yojana (PMJDY), Pradhan Mantri MUDRA Yojana (PMMY), AtaL Pension Yojana (APY), and Other are designed to extend banking,
insurance, and pension coverage to unbanked households. These programs are aligned with the broader vision of "banking the unbanked, securing the unsecured, funding the unfunded, and serving the undeRserved." The microfinance sector acts as a vital bridge between formal financial systems and informal economies, contributing significantly to poverty alleviation, womenRss empowerment, and grassroots entrepreneuRship by meeting the credit needs of the financially excluded.
FY 2024-25 marked a challenging phase for the microfinance industry, as growth momentum moderated following a sustained period of expansion. As of March 2025, the microfinance univeRse stood at Rs 3.75 Lakhs crore in gross Loan portfolio
(GLP), reflecting a sequential decline from Rs 4.34 Lakhs crore Y-o-Y basis. The contraction was Led by NBFC-MFIs, banks, and
small finance banks (SFBs), whose portfolios declined by 13.7%, 14.7%, and 20.2% respectively on a Y-o-Y basis. NBFCs were the only segment to report a modest growth of 4.1% among other financial institutions. The overall number of unique borroweRs stood at 7.8 crore, with regional concentration highest in the East and North-East. DisbuRsement volumes feLL sharply during the year, with Rs 1.12 Lakhs crore disbuRsed across 2.2 crore Loan accounts, a drop of over 25% in vaLue terms.
Despite muted growth, the industry demonstrated operationaL residence through structuraL shifts. The average Loan size increased by 12.3% to Rs 50,131, indicating greater ticket sizes amid focused underwritings. However, asset quaLity pressures intensified, with PAR 31-180 for NBFC-MFIs rising sharpLy to 6.2% as of March 2025 from 2.0% the previous year. Funding avaiLabiLity aLso tightened during the period. NBFC-MFIs received Rs 57,307 crore in debt funding during the year, a 35.7% reduction year-on-year. The decLine in equity base (1.8%) and borrowing (11.9%) refLects the sectorRss recaLibration towards prudent expansion, higher risk provisioning, and cautious Lending strategies. FY 2024-25 was a reset year for many pLayeRs, the underLying fundamentaLs of cLient outreach, technoLogy integration, and borrower diveRsification remain intact, positioning the industry for a more sustainabLe rebound.
Outlook
The microfinance sector is expected to navigate short-term voLatiLity whiLe positioning itseLf for a measured recovery in FY 2025-26. FY 2024-25 was marked by a contraction in disbuRsements, rising PAR LeveLs, and Lower AUM - signaLLing a recaLibration phase across the industry. However, the sectorRss underLying resiLience, supported by strong digitaL adoption, graduaL funding diveRsification, and enabLing reguLatory oveRsight, provides a stabLe foundation for future growth. The focus is expected to shift toward risk-caLibrated expansion, driven by deeper penetration into undeRserved markets, increased support to MSMEs and ruraL fiRst-time borroweRs, and poLicy taiLwinds supporting financiaL incLusion. Broader economic trends - such as the Union BudgetRss infrastructure push, reaL GDP growth of over 6%, and export-Linked microenterprise opportunities - further strengthen the case for revivaL. As nationaL priorities Like Atmanirbhar Bharat and Viksit Bharat 2047 gain momentum, MFIs are poised to pLay a pivotaL roLe in advancing equitabLe, technoLogy-enabLed, and impact-driven financiaL empowerment across India.
• Automobile industry
In the financiaL year 2024-25, the Indian automobiLe industry
demonstrated residence and adaptabiLity, achieving record saLes in severaL segments despite gLobaL chaLLenges. The sectorRss performance was boLstered by strong domestic demand, supportive government poLicies, and a growing emphasis on sustainabLe mobiLity. The industry witnessed a 7.3% growth in domestic saLes and a 19.2% increase in exports during the financiaL year 2024-25, refLecting robust demand both domesticaLLy and internationaLLy.
I n the financial year 2024-25, the passenger vehicle (PV) segment achieved record sales of 4.3 Million units, marking a 2% increase from the previous year. This growth was primarily driven by sport utility vehicles (SUVs), which comprised nearly 65% of total PV sales. Consumer preferences shifted toward SUVs and compact utility vehicles due to their superior safety, space, and performance. FactoRs such as technological advancements, more accessible financing options, and improved road infrastructure further bolstered demand.
ConveRsely, the commercial vehicle (CV) segment experienced a slight contraction, with sales declining 1.2% to 9,56,671 units, attributed to high base effects and sluggish industrial demand. In contrast, two-wheeleRs
achieved impressive sales of 19.6 Million units, reflecting a 9.1% increase, driven by improved rural sentiment and increased disposable incomes. The three-wheeler market also showed signs of recovery, growing by 6.7% to 7,41,420 units as urban mobility needs expanded.
Several macroeconomic and structural factoRs contributed to overall growth in the financial year 2024-25. Chief among them was the increased availability of financing options. Low interest rates, higher loan-to-value ratios, and the expansion of non-banking financial institutions into rural and semi-urban markets played a vital role in boosting vehicle sales. Consumer creditworthiness also improved, allowing more fiRst-time buyeRs to access financing with ease.
(NumbeRs in Million)
Category |
Financial year 2021-22 |
Financial year 2022-23 |
Financial year 2023-24 |
Financial year 2024-25 |
Passenger vehicles |
3.07 |
3.89 |
4.22 |
4.30 |
Commercial vehicles |
0.72 |
0.96 |
0.97 |
0.96 |
Three wheeleRs |
0.26 |
0.49 |
0.69 |
0.74 |
Two wheeleRs |
13.57 |
15.86 |
17.97 |
19.61 |
Grand total |
17.62 |
21.20 |
23.86 |
25.61 |
Source: Society of Indian Automobile ManufactureRs (SIAM)
Vehicle Finance Industry
Vehicle financing continues to play a pivotal role in the Indian automobile industry, influencing consumer purchasing decisions
and market dynamics. Improved credit availability and favourable interest rates have enhanced consumer access to vehicle loans. The availability of financing options has significantly
contributed to the growth in vehicle sales across segments. Affordable financing schemes have made vehicle owneRship more accessible, particularly in semi-urban and rural areas.
Outlook
Concurrently, the vehicle financing sector in India is set for substantial growth, driven by rising vehicle prices, increasing aspirations for vehicle owneRship, and greater credit penetration in underbanked regions. Financial institutions, including banks, non-banking financial companies (NBFCs), and fintech firms, are expected to broaden their outreach through digital platforms, offering tailored financing solutions with expedited disbuRsement processes. The shift toward digital lending and AI-driven credit
assessments is enhancing approval timelines and mitigating default risks, thereby facilitating access to credit for fiRst-time buyeRs, particularly in Tier 2 and Tier 3 cities. Furthermore, an increase in disposable incomes, improved credit ratings, and supportive regulatory frameworks from the Reserve Bank of India (RBI) are anticipated to accelerate growth within the vehicle financing sector, underpinning the broader expansion of the automotive industry.
Housing Finance industry
The Indian housing finance industry plays a pivotal role in driving economic growth, ensuring inclusive development, and meeting the basic human need for shelter. In a country with a population exceeding 1.4 Billion and rapidly accelerating urbanisation, the importance of a robust housing finance ecosystem cannot be oveRstated. The industry has evolved significantly over the last few decades, supported by favourable demographics, a growing middle class, proactive government policies, and increased private participation.
As of 2025, the Indian housing finance market is valued at approximately Rs 33.3 Lakhs crore, with projections suggesting it could grow at a compound annual growth rate (CAGR) of around 15% to reach Rs 77-81 Lakhs crore by the financial year 2029-30. This expansion is driven by rising urban migration, improving income levels, financial inclusion initiatives, and enhanced focus on affordable housing.
In India, the housing finance sector has been buoyed by government initiatives such as the Pradhan Mantri Awas Yojana (PMAY), which aims to provide affordable housing for all by 2022. As of March 31, 2025, the loan disbuRsement in the
housing finance sector is expected to exceed Rs 25 Lakhs crore, marking an uptrend driven by both individual consumeRs and real estate developeRs.
The regulatory landscape governing housing finance is pivotal to fostering market stability and protecting consumer interests. Regulatory bodies, including the Reserve Bank of India (RBI), have introduced various guidelines to enhance transparency and ensure responsible lending. Recent policies emphasise the need for greater financial literacy among consumeRs, which is crucial for long-term sustainability.
The implementation of the Real Estate (Regulation and Development) Act, 2016, has also been instrumental in regulating the housing sector, ensuring that buyeRs are well protected. Additionally, regulatory efforts have led to an increase in the entry of non-banking financial companies (NBFCs) into the housing finance market, which has diveRsified lending options for consumeRs.
The housing finance market offeRs a variety of loan products catering to the diveRse needs of borroweRs. Home purchase loans remain the most popular, accounting for approximately 60% of total housing finance. Other prevalent products include home improvement loans (which have gained traction due to the rise in
home renovation projects) and loans against property, allowing homeowneRs to leverage their propertyRss equity.
Technological innovation is reshaping the housing finance sector, providing new opportunities for efficiency and customer engagement. Digital platforms are increasingly being used to simplify the loan application process, enabling consumeRs to apply for mortgages online. The adoption of artificial intelligence and big data analytics in the underwriting process has enhanced risk assessment, allowing lendeRs to make informed decisions rapidly. These advancements contribute to a more seamless and user-friendly experience for consumeRs seeking loans.
Outlook
The future outlook for the housing finance industry appeaRs promising, driven by a combination of demographic shifts, technological advancements, and supportive government policies. As urbanisation continues to accelerate, particularly in emerging markets, the demand for housing is expected to rise significantly. According to various projections, housing finance is anticipated to experience a compound annual growth rate (CAGR) of around 9.7% through 2030. FactoRs such as increased disposable income, favourable interest rates, and government initiatives like affordable housing schemes are likely to stimulate home buying. Additionally, the shift toward remote work due to the COVID-19 pandemic has prompted many individuals to reassess their housing needs, increasing demand for homes in sub-urban and semi-urban areas. This trend is expected to peRsist, leading to diveRse financing options that cater to a wider range of customeRs, including fiRst-time homebuyeRs and those seeking eco-friendly properties.
Technological innovation will play a crucial role in transforming the housing finance landscape. The integration of advanced technologies such as artificial intelligence, blockchain, and big data analytics will enhance underwriting processes, streamline loan applications, and improve risk assessment. Additionally, the
rising importance of sustainability in home buying will encourage LendeRs to develop green financing products aimed at promoting energy-efficient housing. As consumeRs increasingly prioritise environmental considerations, housing finance institutions that incorporate sustainability into their offerings will gain a competitive advantage. Overall, the housing finance industry is poised for robust growth, characterised by innovation, adaptability, and a focus on consumer needs.
Source: https://www.careratings.com/uploads/newsfiles/n43423679_
Housing%20Finance%20-%20CareEdge%20Report.pdf https://www.custommarketinsights.com/report/india-housing-finance- market/
Insurance industry
The Indian insurance industry is a vital part of the countryRss financial services sector, playing a key role in economic growth and financial inclusion. Over the last three decades, it has transformed from a government-controlled monopoly into a vibrant, competitive market driven by private playeRs and foreign investment. The industry provides risk protection to millions of individuals and businesses, mobilises long-term savings, and supports social welfare initiatives.
In the financial year 2024-25, the Indian life insurance industry recorded a total New Business Premium (NBP) of Rs 3.97 Lakhs crore, reflecting a 5.13% year-on-year growth over the financial year 2023-24. This growth came despite macroeconomic headwinds and evolving regulatory changes. The Life Insurance Corporation of India (LIC) remained the largest contributor, with Rs 2.26 Lakhs crore in NBP, while private life insureRs collectively contributed Rs 1.71 Lakhs crore. Notably, individual new business premiums rose by 11% year-on-year, undeRscoring rising demand for retail protection and long-term savings products.
Growth was also supported by strong demand for non-participating guaranteed plans, which offered stable returns amid high interest rates. Overall, NBP data for the financial year 2024-25 signals steady industry momentum, underpinned by strategic distribution, improved product positioning, and increased consumer financial awareness. While premium growth moderated slightly, structural improvements were evident across the sector. Digital adoption deepened, especially in Tier 2 and 3 cities, enabling efficient customer acquisition and servicing. PeRsistency ratios improved, supported by better policyholder engagement and data-driven customer retention strategies. Product innovation also accelerated, with a strong push for retirement and annuity products addressing the needs of an aging population.
In the financial year 2024-25, IndiaRss non-life insurance industry crossed a significant milestone by surpassing Rs 3 Lakhs crore
in gross direct premium underwritten (GDPI). However, this landmark achievement was accompanied by a slowdown in growth, with the industry expanding by only 6.2% compared to a more robust 12.8% in the financial year 2023-24. This marked
halving of growth reflects a host of structural changes and market pressures, most notably the implementation of the 1/n rule, which changed the way long-term policy premiums are recognised.
Gross Direct Premium Underwritten (GDPI)
in Rs crore
InsureRs |
Financial Year 2022-23 |
Financial Year 2023-24 |
Financial Year 2024-25 |
Financial Year 2023-24 growth |
Financial Year 2024-25 growth |
Public General InsureRs |
82,891.3 |
90,252.1 |
95,196.0 |
8.9% |
5.5% |
Specialised PSU InsureRs |
15,817.3 |
11,190.4 |
11,106.5 |
-29.3% |
-0.07% |
Private General InsureRs |
1,31,941.8 |
1,55,090.5 |
1,62,895.7 |
17.5% |
5.0% |
SAHI |
26,243.9 |
33,119.3 |
38,413.6 |
26.2% |
16.0% |
Total |
2,56,894.2 |
2,89,652.3 |
3,07,611.8 |
12.8% |
6.2% |
Public sector general insureRs collectively grew by 5.5% in the financial year 2024-25, slightly improving their market performance. This growth was driven largely by strong gains in retail health and motor insurance, two areas where public playeRs still maintain a presence. In contrast, private general insureRs, while continuing to dominate the overall market in terms of volume, experienced a significant deceleration with only 5.0% growth, down from 17.5% the year prior.
Outlook
The insurance industry in India is poised for robust growth over the next decade, driven by rising income levels, increased
awareness, and digital transformation. Life insurance penetration remains low at 2.8% of GDP, indicating significant headroom for expansion. The sector is expected to grow at a compound annual growth rate (CAGR) of 10-12%, fuelled by greater adoption in Tier 2 and 3 cities, a younger demographic entering the workforce, and evolving consumer preferences toward protection and retirement products.
Regulatory reforms by the Insurance Regulatory and Development Authority of India (IRDAI), such as simplified product approvals, increased FDI limits (up to 100%), and
emphasis on financial inclusion, are creating a more investor- and
consumer-friendly environment. Technological advancements Like AI, data analytics, and digital onboarding are improving underwriting, fraud detection, and customer experience. Moreover, insureRs are diveRsifying products to cater to niche segments, such as women, gig workeRs, and the elderly, while integrating ESG goals into investment strategies. As insureRs increasingly position themselves as holistic financial solution provideRs, the industry will play a key role in IndiaRss socio-economic development by offering risk protection, long-term savings, and capital mobilisation for infrastructure and nation-building.
Source: CARE edge
https://economictimes.indiatimes.com/industrg/banking/finance/insure/
life-insureRs-record-marginal-5-rise-in-new-premium-collection-in-
fg25/articleshow/120560097.cms?from=mdr
Business Review
The Company operates under a specialised and resilient business model that is primarily centred on gold loans, while also diveRsifying into a range of financial services, including microfinance, vehicle and equipment financing, affordable housing loans, and small and medium-sized enterprise (SME) lending. The core focus on gold loans is grounded in a high-velocity, low-ticket model that capitalises on IndiaRss substantial household gold reserves. By providing short-term loans against gold jewellery, the Company effectively addresses the immediate liquidity needs of customeRs, particularly in semi-urban and rural areas where access to formal credit is limited. This model thrives on high asset turnover and collateralised lending, ensuring security, while the short loan tenures serve to mitigate credit risk.
A distinctive feature of the CompanyRss offerings is its extensive branch network, boasting over 4,100 locations across 25 Indian states, thereby ensuring significant reach into undeRserved markets. Such deep penetration, especially in Tier 2 and Tier 3 cities, strategically positions the Company for success. Furthermore, another key differentiator is its swift service; gold loans are approved within minutes, facilitated by standardised appraisal processes and real-time credit evaluations. The decentralised operational model empoweRs local branches with autonomy within defined policy frameworks, promoting both agility and responsiveness.
In addition, the CompanyRss strong brand equity, cultivated over decades, establishes a foundation of trust among customeRs, an essential asset in the gold loan industry, where emotional and cultural ties to collateral are profound. The CompanyRss
proactive approach to technology adoption further reinforces its business model and competitive advantage. Through the development of digital capabilities, customeRs are afforded the convenience of applying for and managing gold loans via mobile and online platforms. This includes the innovative "Online Gold Loan” product, which allows for disbuRsements without requiring branch visits. The digital interface is seamlessly integrated with real-time customer KYC processes, repayment schedules, and repledging options, thereby enhancing both convenience and efficiency.
Business Performance in the Financial Year 2024-25
The Company has experienced significant growth in both business volume and profitability, positioning itself well for
sustained success. The consolidated Assets under Management (AUM) grew by 2.3% YoY to Rs 43,034 crore in the financial year 2024-25 from Rs 42,070 crore reported in the previous fiscal year. Operating income stood at Rs 10,041 crore in the financial year 2024-25, marking an increase of 13.5% compared to Rs 8,848 crore in the financial year 2023-24. Primarily due to a sharp increase in provision of doubtful debts to Rs 1,963 crore as compared to Rs 578 crore in the previous year, Consolidated PAT (before OCI and Minority Interest) reduced to Rs 1,204 crore, a reduction by 45.2%, compared to Rs 2,197 crore in the preceding year.
The Company reported a consolidated return on equity (ROE) of
10.0% and return on assets (ROA) of 2.5%.
The CompanyRss gold loan business constituted 59.5% of the consolidated AUM, and the remaining 40.5% comprised non-gold
businesses such as microfinance, vehicle, housing, and SME finance. Gold loan AUM increased by 18.7% YoY to Rs 25,586 crore as against Rs 21,561 crore in the previous year.
As of March 31, 2025, the number of active gold loan customeRs stood at 2.58 Million. With an average ticket size of Rs 67,800, the CompanyRss gold loan portfolio is extremely resistant to gold price fluctuations. Gold Loan LTV stood at 57% as on March 31, 2025. The CompanyRss gold holdings stood at 56.4 tonnes as on March 31, 2025 compared to 58.8 tonnes at the end of the previous year. The online gold loan (OGL) book represented 82% of the overall gold loan.
The CompanyRss Vehicle and Equipment Finance division closed the year with an AUM of Rs 4,773 crore compared to Rs 4,111 crore at the end of the previous year, reflecting 16.1% YoY growth.
The CompanyRss microfinance (MFI) subsidiary, Asirvad Micro
Finance Limited (AMFL), recorded a turnover of Rs 27,054 Million during the financial year ended March 31, 2025, as compared to Rs 26,813 Million in the previous financial year ended March 31, 2024 - representing a 0.90% year-on-year growth in revenue from operations. However, the company reported a net loss of Rs 6,387.17 Million for FY 2024-25, as against a net profit of ?4,583 Million in FY 2023-24. The loss before tax for the financial year reflected a decline of 230.46% over the corresponding period of the previous year.
CRISIL reaffirmed its rating of AMFL at RsAA-minus stableRs,
undeRscoring the companyRss sound fundamentals and liquidity profile, despite near-term profitability challenges.
While the microfinance industry remains inherently cyclical, influenced by socio-economic dynamics and external disruptions, the regulatory environment has continued to be supportive - providing stability through guidelines aimed at responsible lending, customer protection, and pricing standardisation. Encouragingly, greenshoots are now apparent, with improving collection efficiencies, rural demand recovery, and enhanced borrower engagement indicating the early signs of a sectoral rebound.
In line with its broader financial inclusion agenda, AMFL has also expanded its product suite to include gold loans, further diveRsifying its offerings and enhancing secured lending access for undeRserved women borroweRs.
Regulatory Action and Resolution Status of Asirvad Micro Finance Limited: On October 17, 2024, the Reserve Bank of India (RBI), under Section 45L(1)(b) of the Reserve Bank of India Act, 1934, imposed supervisory restrictions on Asirvad Micro Finance Limited, a subsidiary company, based on certain concerns observed during an onsite inspection with reference to the financial position as of March 31, 2024. Consequently, the RBI directed the subsidiary company to cease and desist from sanctioning or disbuRsing new loans, effective from October 21, 2024. However, the company was permitted to continue servicing its existing customeRs and to carry out collection and recovery processes in accordance with the applicable regulatory guidelines.
The Board of Director of the subsidiary company thoroughly
reviewed the implications of these directions and constituted a team to implement corrective actions and revise policies and procedures as necessary. The management of the subsidiary company remains confident that these measures will address and resolve all issues raised by the RBI. The company is committed to upholding the highest standards of regulatory compliance, both in letter and in spirit.
The Group has conducted a thorough assessment of its going concern status and does not anticipate any challenges. Specifically:
1. The subsidiary company has adequate funds to support its
operational expenses and meet its repayment obligations for the next twelve (12) months.
2. Cost Control: The company has identified and is in the process of implementing cost-control measures, including the reduction of major discretionary expenditures.
These actions are expected to ensure that the subsidiary companyRss projected cash flows over the next twelve (12) months will be sufficient to meet its financial obligations, maintain robust capital adequacy, and gradually restore financial resilience.
The Group is confident of resolving all issues raised by the RBI and has prepared the financial results of the subsidiary company
on a going concern basis. The business restrictions imposed by the RBI vide its order dated October 17, 2024, on Asirvad Micro Finance Limited were lifted by the RBI vide its order dated January 08, 2025.
The CompanyRss home finance subsidiary, Manappuram Home Finance Limited, recorded an AUM of Rs 1,824 crore at the end of the financial year 2024-25, a growth of 20.79% as against Rs 1,510 crore at the end of the previous fiscal. The total borrowing of the Company on a consolidated basis was a Rs 35,404 crore at the end of the financial year 2024-25. On the liquidity front, the Company has not encountered any obstacles in securing funds for growth. It anticipates no hurdles in funding its plans and remains well-positioned with its strong ALM and access to diveRsified sources of funds. The Company recorded financial expenses of Rs 3,575 crore in the financial year 2024-25 and closing AUM increased by 2.3% YoY. Employee expenses increased to Rs 1,842 crore in the financial year 2024-25 from Rs 1,597 crore in the previous year. The Company has implemented several cost rationalisation measures. Additionally, there is substantial operating expense leverage as the CompanyRss new branches mature.
The CompanyRss consolidated net worth increased to Rs 12,432 crore in the financial year 2024-25 from Rs 11,548 crore the previous year. The book value per share stood at Rs 146.9. Consolidated earnings per share (EPS) for the year stood at Rs 14.2, while the capital adequacy ratio (standalone) was maintained at 31%. The CompanyRss gross non-performing assets (GNPA) was 2.8% and the net NPA position of the standalone entity stood at 2.5%. The CompanyRss total number of consolidated live customeRs in the financial year 2024-25 stood at 5.44 Million compared to 6.77 Million in the financial year 2023-24.
Credit Rating
The credit rating details of the Company as of March 31, 2025 were as follows:
Credit |
Type of facility |
March 31, 2025 |
March 31, 2024 |
||
Rating Agency |
Rs in crore |
Rating |
Rs in crore |
Rating |
|
CRISIL |
Bank Loan Facility Long Term |
7,585 |
CRISIL AA/Stable |
6,995.00 |
CRISIL AA/Stable |
Bank Loan Facility Short Term |
4,415 |
CRISIL A1+ |
2,505.00 |
CRISIL A1+ |
|
Non-Convertible Debentures |
4,064.77 |
CRISIL AA/Stable |
4,522.80 |
CRISIL AA/Stable |
|
Commercial Paper |
4,000 |
CRISIL A1+ |
4,000.00 |
CRISIL A1+ |
|
CARE |
Bank Loan Facility Long Term |
9,490 |
CARE AA Stable |
8,605.00 |
CARE AA Stable |
Bank Loan Facility Short Term |
5,510 |
CARE A1+ |
5,395.00 |
CARE A1+ |
|
Non-Convertible Debentures |
1,360.25 |
CARE AA Stable |
1,610.25 |
CARE AA Stable |
|
Commercial Paper |
4,000.00 |
CARE A1+ |
4,000.00 |
CARE A1+ |
|
Brickwork |
Non-Convertible Debentures |
790.37 |
BWR AA (Stable) |
950.62 |
BWR AA (Stable) |
International Credit Rating
Credit |
Type of facility |
March 31, 2025 |
March 31, 2024 |
||
Rating Agency |
Rsin crore |
Rating |
Rsin crore |
Rating |
|
S&P |
Senior Secured Notes |
2,506.05 |
BB-/Stable |
0 |
|
FITCH |
Senior Secured Notes |
2,506.05 |
BB-/Stable |
0 |
|
Asset Quality
The Company has strong credit underwriting, data-driven early warning systems, and tech-enabled collections. Additionally, Portfolio diveRsification and forward-looking provisioning further enhance resilience against delinquencies. Gross NPA stood at 2.8% in the financial year 2024-25 compared to 1.9% in the financial year 2023-24, while net NPA stood at 2.5% in the financial year 2024-25 as against 1.7% in the financial year 2023-24.
Digital Transformation
The Company has established itself as a leader in the digital transformation of IndiaRss non-banking financial sector, implementing a meticulous strategy that emphasises innovation, differentiation, and execution. By adopting core banking systems at an early stage, the Company has facilitated real-time connectivity across its branches, significantly streamlining the disbuRsement of gold loans while simultaneously enhancing risk management protocols.
In a pioneering move, the Company launched the Online Gold Loan (OGL) platform, which empoweRs customeRs to pledge gold and access funds remotely. This initiative has seen substantial uptake, particularly during the pandemic, where it accounted for nearly 70% of the CompanyRss gold loan business. To further bolster its digital outreach, the Company introduced the Ma-Money app, a comprehensive digital lending platform that offeRs a diveRse range of loans - including peRsonal, business, and sector-specific loans - targeting primarily customeRs in tier 2 and tier 3 cities.
The CompanyRss unwavering commitment to technological advancement is reflected in its integration of cutting-edge tools such as Robotic Process Automation (RPA), the Internet of Things (loT), blockchain technology, and cloud computing.
These innovations significantly enhance both operational efficiency and the overall customer experience.
Additionally, the CompanyRss transition to a paperless workflow management system undeRscores its commitment to sustainability and operational efficiency. By migrating its IT infrastructure to OracleRss second-generation cloud, the Company anticipates considerable performance enhancements and cost reductions, allowing its IT team to focus on driving innovation and providing robust support for core business functions.
Collectively, these strategic initiatives reflect the CompanyRss dedication to leveraging technology for holistic growth, thereby ensuring improved customer service, ongoing employee development, and sustainable operational practices. Through these efforts, the Company is not only positioning itself
as a trailblazer in the financial sector but also contributing to the
overall evolution of digital financial services in India.
SWOT analysis Strengths
LeadeRship Presence
The Company is a well-established leader in the gold loan segment, commanding strong brand recall and customer trust across India, particularly in southern states. Its longstanding experience, grassroots reach, and undeRstanding of local markets offer an edge in informal lending ecosystems. CustomeRs value its fast turnaround times and flexible structures, especially in emergency scenarios. This leadeRship enables the Company to retain pricing power, negotiate favourable funding, and stay resilient during sectoral disruptions. The combination of reputation, customer loyalty, and regional dominance forms a durable competitive advantage in a fragmented NBFC landscape.
DiveRsified Portfolio
Beyond gold loans, the Company has built a diveRsified portfolio
that includes microfinance, affordable housing loans, vehicle finance, and SME lending. This diveRsification helps in risk dispeRsion, revenue stabilisation, and broader market capture. It enables the business to remain agile and responsive to sectoral trends and economic shifts. Cross-sell synergies and integrated customer lifecycle management also improve operational leverage. The ability to cater to different credit profiles - rural borroweRs, self-employed professionals, and small business owneRs - positions the Company as a one-stop solution for financial needs in undeRserved markets.
Robust Capital Structure
The Company enjoys robust capital adequacy, which provides financial resilience, strategic flexibility, and stakeholder confidence. Its capital structure is managed conservatively, with adequate buffeRs to support growth, absorb losses, and meet regulatory requirements. Strong capitalisation also facilitates access to funding at competitive rates and allows the Company to underwrite higher-risk portfolios responsibly. This strength supports the puRsuit of long-term objectives - expansion, digitisation, and product diveRsification - without compromising prudence. ItRss particularly vital in volatile financial markets, were investor and lender confidence hinges on capital health.
Stable Asset-Liability Profile
Supported by the secured and short-term nature of gold loans, the Company maintains a naturally self-liquidating portfolio, reducing the risk of asset-liability mismatches. Its lending and borrowing maturities are well-aligned, and liquidity management
is proactive, with healthy coverage ratios and buffer reserves. The business model inherently reduces rollover risk and dependence on volatile market instruments. During periods of tight liquidity or rising interest rates, this stability protects profitability and operational continuity. The Company also monitoRs stress scenarios and interest rate exposures to preserve balance sheet strength.
Technology-Driven Operations
Digitalisation plays a pivotal role in the CompanyRss operational efficiency and customer experience. From paperless onboarding to AI-driven risk analytics and mobile apps for servicing, the Company has embraced technology at scale. It enables faster disbuRsals, real-time monitoring, and superior customer insights. Automation in underwriting and collections reduces human error and operational cost. Cloud adoption and centralised systems also offer scalability and flexibility. In an increasingly tech-centric lending landscape, this investment in digital capabilities positions the Company to compete effectively and adapt to evolving customer expectations.
Extensive Physical Network
With thousands of branches spread across India, particularly in Tier II and Tier III cities, the Company has built a formidable
physical distribution network. This presence is key to accessing the rural and semi-urban customer base that lacks formal banking access. The network supports not just acquisition but also ongoing service delivery, collections, and customer engagement. It enhances the CompanyRss ability to grow deeper into undeRserved geographies. Additionally, it enables the Company to combine the strengths of digital innovation with on-ground relationships, offering a true phygital model.
Weaknesses and Mitigating Strategies
1. Limited Market Share in the Broader Lending Space
While Manappuram Finance Limited maintains a dominant position in the gold loan segment, its market share across other lending verticals - such as housing finance, MSME lending, and unsecured peRsonal loans - remains
comparatively modest. The Company faces strong competition from banks, large non-banking financial companies (NBFCs), and fintech playeRs in these categories, which poses challenges in achieving meaningful scale and portfolio diveRsification.
Mitigating-Strategy:
The Company has adopted a strategic diveRsification roadmap, expanding its presence in allied segments and other business verticals like vehicle finance, MSME & peRsonal loan business, Forex & money transfer and also
through its subsidiaries and business verticals such as Asirvad Microfinance, Manappuram Home Finance, and vehicle finance. Investments in digital underwriting, data analytics, and risk-based pricing models are enabling prudent expansion into newer geographies and customer profiles. Targeted brand-building initiatives and focussed product innovation are underway to position the Company competitively in non-gold lending categories. These efforts
are expected to progressively de-risk the portfolio and create sustainable revenue streams beyond the core gold loan business.
2. Elevated Operating Cost Structure
The CompanyRss branch-intensive model, combined with substantial regulatory compliance, security requirements, and localised customer service operations, results in a relatively high cost-to-income ratio compared to digital-native peeRs. This structural cost pressure can impact profitability, especially in periods of interest rate volatility or muted credit demand.
Mitigating-Strategy:
Manappuram has initiated a company-wide operational efficiency programme aimed at optimising cost structures while maintaining service quality. Key initiatives include automation of back-office processes, digitisation of customer interfaces, deployment of centralised loan processing systems including online gold loan system, and selective rationalisation of physical infrastructure. Emphasis is being placed on leveraging technology to reduce turnaround times, minimise manual interventions, and improve staff productivity. Over the medium term, these measures are expected to enhance operational efficiency and strengthen the CompanyRss ability to scale new business lines without proportionate increases in overhead.
3. Inability to Accept Public Deposits
As a non-deposit-taking NBFC, the Company is restricted
from mobilising retail public deposits. This limits access to long-tenure, low-cost funding and increases dependence on market instruments, bank borrowings, and institutional financing. Such dependency can lead to funding cost fluctuations during periods of sectoral stress or tightening liquidity.
Mitigating-Strategy:
The Company maintains a well-diveRsified borrowing mix, drawing from banks, mutual funds, debt markets through non-convertible debt instruments, securitisation transactions, and external commercial borrowings. Proactive treasury management and strong institutional relationships have enabled access to competitively priced capital. In addition, Manappuram follows a conservative asset-liability management (ALM) framework, ensuring liquidity buffeRs and timely refinancing of obligations. While regulatory restrictions on deposit-taking remain unchanged, the Company continues to explore innovative funding structures to ensure financial flexibility and resilience under varying market conditions.
The Company remains focussed on proactively addressing these structural challenges through strategic investments, disciplined execution, and a forward-looking risk management approach. These measures are integral to strengthening its competitive positioning and ensuring long-term value creation for all stakeholder.
Opportunities
Favourable Interest Rate Cycle
Softening interest rates or accommodative monetary policy cycles can significantly benefit the Company by lowering its cost of borrowing. As a lender heavily reliant on wholesale funding, cheaper credit enhances profitability and supports lending at competitive rates. Lower interest rates also increase loan demand across microfinance, housing, and SME segments. By actively managing its liability profile during rate easing, the Company can widen spreads and expand into newer products while maintaining risk-adjusted returns. This macroeconomic tailwind creates a conducive environment for business growth and margin improvement.
Deeper Penetration into the Unorganised Sector
A significant portion of IndiaRss credit demand remains unserved or undeRserved by formal institutions. The unorganised sector, particularly in rural and semi-urban India, offeRs a vast opportunity for expansion. The CompanyRss grassroots presence,
operational expertise, and ability to underwrite unconventional borroweRs place it in a strong position to deepen market penetration. By leveraging alternate data, relationship-driven selling, and localised product designs, it can extend financial access to self-employed individuals, small tradeRs, and informal workeRs. This expansion aligns with national financial inclusion priorities and strengthens long-term customer loyalty.
Supportive Government Initiatives
Government schemes such as PMMY (Pradhan Mantri Mudra Yojana), rural housing subsidies, and regulatory encouragement
for NBFC participation in priority sector lending offer growth opportunities. Policies that promote financial inclusion, digitisation of credit, and infrastructure development improve borrower visibility and creditworthiness, especially in rural areas. Public-sector bank outreach limitations also create space for agile NBFCs to step in. By aligning with these initiatives, the Company can co-lend, access refinance support, and expand product offerings under regulatory tailwinds, contributing to inclusive growth while building stable portfolios.
Emergence of New Technologies
Digital transformation across lending, collections, and risk analytics presents immense opportunities for operational efficiency and customer reach. Technologies like AI/ML for credit scoring, blockchain for collateral tracking, and digital identity tools reduce costs, improve accuracy, and mitigate fraud. The Company can use mobile-fiRst platforms and automation to scale efficiently in remote regions while offering a seamless borrower experience. Tech-driven underwriting can also unlock credit to thin-file or informal customeRs. Early adoption of such innovations can position the Company as a forward-looking player in an increasingly digital lending ecosystem.
Threats
Intense Competition Across Segments
The lending landscape is increasingly crowded, with banks, large NBFCs, fintechs, and even peer-to-peer platforms targeting
the same customer base. Gold loans, once niche, now attract competition from aggressive fintechs and regional banks offering low rates and digital disbuRsement. In other segments like housing or MSME, incumbents have scale and branding advantages. This intense competition could lead to margin compression, higher acquisition costs, and portfolio cannibalisation. Sustaining growth while protecting asset quality and pricing power will require continuous innovation and deep customer engagement.
Customer Retention and Employee Attrition Risks
As competition intensifies, retaining both customeRs and skilled peRsonnel is increasingly difficult. BorroweRs have more choices and may switch to digital or lower-cost options. Meanwhile, trained employees with field experience and credit know-how are highly sought after by competitoRs. High attrition raises the costs of hiring and training, affects service quality, and risks data leakage. Retention strategies, including incentive structures, training, and career planning, are essential to maintain continuity. Strengthening customer loyalty through service excellence and peRsonalisation can help mitigate churn and maintain stable revenues.
Operational Risks and Internal Control Gaps
Operating across thousands of decentralised locations increases exposure to fraud, process lapses, and human erroRs. Risks include cash mismanagement, collateral mishandling, IT system failures, and data breaches. Any failure in control mechanisms can result in financial loss, reputational damage, or regulatory penalties. While the Company has strong internal audit and compliance frameworks, continuous vigilance is required to address evolving threats. CybeRsecurity risks are also growing with increased digitisation. Investing in robust internal systems, employee training, and incident response mechanisms is critical to minimising operational vulnerabilities.
Macroeconomic Volatility and External Shocks
NBFCs are sensitive to broader economic trends, such as inflation, unemployment, and rural income shocks. Slowdowns can reduce credit demand, impair borrower repayment capacity, and strain asset quality. For the Company, the customer base includes informal workeRs and micro-entrepreneuRs; these effects can be pronounced. External shocks like pandemics, geopolitical events, or commodity fluctuations may disrupt liquidity, funding, or customer behaviour. Interest rate volatility also affects borrowing costs and portfolio yield. Maintaining financial flexibility, conservative provisioning, and strong asset-liability management is essential to navigate such uncertainties.
Financial Review
The following table illustrates the standalone and consolidated financials of the Company for the financial year 2024-25, including revenues, expenses, and profits.
Consolidated Results at a Glance (in Rs crore)
Particular |
Financial Year 2021-22 |
Financial Year 2022-23 |
Financial Year 2023-24 |
Financial Year 2024-25 |
% growth |
Income from operations |
6,061 |
6,684 |
8,848 |
10,007 |
13.10% |
Profit before tax |
1,784 |
2,041 |
2,960 |
1,666 |
-43.72% |
Profit after tax (after minority interest) |
1,329 |
1,500 |
2,197 |
1,204 |
-45.22% |
AUM |
30,261 |
35,452 |
42,070 |
43,034 |
2.29% |
Net Worth |
8,368 |
9,645 |
11,548 |
12,432 |
7.66% |
RoA (%) |
4.08 |
4.10 |
5.10 |
2.5 |
-50.98% |
RoE (%) |
16.95 |
16.60 |
20.7 |
10.0 |
-51.69% |
No. of branches |
5,053 |
5,057 |
5,286 |
5,359 |
1.38% |
Total No. of employees |
41,396 |
48,369 |
51,004 |
51,647 |
1.26% |
Standalone Results at a Glance (in Rs crore)
Particular |
Financial Year 2022-23 |
Financial Year 2023-24 |
Financial Year 2024-25 |
% change |
AUM |
24,446 |
28,679 |
33,021 |
15.14% |
Gold loan AUM |
19,041 |
20,656 |
24,658 |
19.37% |
Gold Holding (Tonnes) |
58.00 |
56.34 |
54.20 |
-3.80% |
Live Gold Loan CustomeRs (Million) |
2.30 |
2.37 |
2.44 |
2.78% |
Gold Loans DisbuRsed |
1,293.14 |
1,190.84 |
1,452.90 |
22.01 |
Capital Adequacy Ratio |
31.70 |
30.58 |
30.91% |
1.08% |
Cost of Fund |
7.90 |
8.60 |
9.21% |
7.09% |
Gross NPA (%) |
1.33 |
1.93 |
2.77 |
43.52% |
Net NPA (%) |
1.15 |
1.70 |
2.43 |
42.94% |
Number of Branches |
3,524 |
3,524 |
3,524 |
0% |
CV Loans (AUM) |
2,455 |
4,111 |
4,773 |
16.11% |
Key Financial Ratios
Particular |
Financial Year 2022-23 |
Financial Year 2023-24 |
Financial Year 2024-25 |
Return on Net Worth (%) |
14.97 |
16.30 |
14.20 |
Basic EPS (after exceptional items) |
14.96 |
19.59 |
21.07 |
Interest Coverage Ratio |
2.14 |
2.22 |
2.00 |
Current Ratio |
1.96 |
1.78 |
2.20 |
Debt Equity Ratio |
2.14 |
2.17 |
2.29 |
Operating Profit Margin (%) |
38.92 |
41.33 |
37.32 |
Net Profit Margin (%) |
26.23 |
28.32 |
25.79 |
Risk Management
In the dynamic Landscape of financial services, risk management stands as a corneRstone for the sustainability and growth of institutions. The Company, a prominent non-banking financial institution in India, operating within a highly regulated and competitive environment, the Company faces a multitude of risks that can impact its operations and profitability.
Effective risk mitigation involves a proactive approach to identifying potential exposures, evaluating their magnitude, setting risk tolerance limits, and deploying response plans. Through robust governance structures, stringent policies and procedures, and continuous monitoring and assessment, the Company effectively mitigates risks across various domains. By embedding risk management into its strategic and operational framework, the Company not only safeguards its
assets and reputation but also builds resilience in a dynamic and
competitive environment.
Credit Risk
Credit risk arises when borroweRs fail to meet their contractual obligations, leading to potential losses for the lender. For the Company, this risk is inherent in its lending activities, particularly in unsecured segments like microfinance and SME loans.
To mitigate credit risk, the Company employs stringent underwriting norms tailored to each loan product. Credit evaluation tools include borrower profiling, financial history analysis, and risk categorisation. In secured lending, the
value and liquidity of collateral are continuously monitored to ensure adequate coverage.
The Company also adopts a segmented portfolio approach to diveRsify exposure and avoid concentration risk. Automated loan processing systems and centralised decision-making hubs reduce human bias and ensure policy compliance. Early warning systems help identify delinquency patterns, enabling timely remedial measures such as restructuring or intensified collections.
Technology Risk
Technology risk refeRs to the potential for losses resulting from failures or deficiencies in the CompanyRss information technology systems. This includes risks related to system downtime, software erroRs, cybeRsecurity threats, data breaches, obsolescence of IT infrastructure, and dependency on third-party service provideRs. As the Company increasingly leverages digital platforms to deliver financial services, the reliability, security, and scalability of its technology systems become critical to business continuity and customer satisfaction.
The Company mitigates technology risk by maintaining a robust and scalable IT infrastructure supported by advanced hardware and software systems. IT governance is oveRseen by a dedicated team responsible for managing system performance, application security, vendor contracts, and technology upgrades.
CybeRsecurity is a key area of focus. The Company enforces stringent security protocols, including firewalls, intrusion detection systems, data encryption, and multi-factor authentication. Regular vulnerability assessments, penetration testing, and threat intelligence monitoring are conducted to proactively identify and address risks.
To minimise operational disruptions, the Company has established comprehensive disaster recovery and business continuity plans, including data backup systems and alternate data centres. Regular simulation exercises and audits are conducted to test system resilience and readiness.
Additionally, employees undergo regular training in information
security practices to prevent internal breaches and ensure adherence to best practices. The Company also monitoRs technological developments and emerging risks to update its IT strategy in line with evolving business needs and industry standards.
Interest Rate Risk
Interest rate risk pertains to the potential impact of fluctuations in market interest rates on the CompanyRss financial performance. Changes in interest rates can affect the net interest margin, the value of assets and liabilities, and the overall profitability.
The Company manages interest rate risk through a robust Asset-Liability Management (ALM) framework. This involves matching the maturities and repricing profiles of assets and liabilities to minimise mismatches. The ALM Committee regularly reviews interest rate scenarios and adjusts strategies accordingly.
Additionally, the Company utilises hedging instruments such as interest rate swaps and options to manage exposure to interest rate volatility. Stress testing and scenario analysis are conducted to assess the impact of extreme interest rate movements, allowing the Company to develop contingency plans.
Operational Risk
Operational risk encompasses losses from inadequate or failed internal processes, people, systems, or external events. This includes risks related to fraud, system failures, human erroRs, and natural disasteRs.
To address operational risk, the Company has invested in automation and digitisation to streamline processes and reduce manual erroRs. A dedicated internal audit team ensures adherence to policies and flags deviations for correction. Employees undergo regular training in operational protocols, fraud prevention, and customer service standards.
Liquidity Risk
Liquidity risk arises when the Company is unable to meet its financial obligations as they fall due, without incurring excessive costs. This risk can originate from mismatches in asset-liability tenures, unanticipated demand for funds, or constraints in accessing funding markets.
The Company maintains a diveRsified funding profile, tapping into both wholesale and retail sources, including banks, capital markets, and institutional investoRs. The treasury function plays
a pivotal role in ensuring that short-term and long-term funding needs are forecasted accurately and addressed proactively.
A comprehensive liquidity risk management policy is in place, which includes maintaining liquidity buffeRs, daily monitoring of cash flow positions, and preparing contingency funding plans. The Asset-Liability Committee reviews liquidity indicatoRs and recommends adjustments to investment or borrowing strategies.
Regulatory and Compliance Risk
Regulatory risk pertains to the possibility of facing penalties, restrictions, or operational setbacks due to non-compliance with applicable laws, regulations, or codes of conduct. With evolving regulatory expectations in the non-banking financial sector, the Company must ensure continuous alignment with legal and governance standards.
The Company has institutionalised a governance and compliance framework led by a dedicated compliance team. Policies and procedures are regularly updated to reflect changes in regulatory requirements. Real-time alerts, audit trails, and workflow approvals ensure that breaches are prevented or identified swiftly.
The Board of Director and its committees maintain oveRsight on regulatory adherence, while independent auditoRs conduct regular compliance reviews. Awareness and training sessions are held across all levels to reinforce a culture of compliance.
Reputational Risk
Reputational risk is the risk of negative perception among stakeholder resulting from actual or alleged misconduct, governance failures, or poor customer experience. Reputational damage can lead to loss of customeRs, regulatory scrutiny, and funding challenges.
The Company maintains a strong code of ethics, customer service charter, and transparent communication policies to uphold its brand image. Any grievances or complaints are addressed promptly through established redressal mechanisms.
Feedback Loops are built into customer-facing processes to ensure continuous service improvement.
Crisis communication protocols guide the CompanyRss response to reputationaL threats, enabLing prompt and responsibLe disclosure of facts. The public relations function works closely with leadeRship to manage media relations and stakeholder communication.
Competition Risk
Competition risk involves the potential for loss arising from ineffective business strategies, flawed execution, or failure to respond to industry trends. DiveRsification into new geographies or financial products without adequate preparation can expose the Company to unforeseen challenges.
The Company employs a structured approach to strategy formulation, involving comprehensive market research, risk-return assessments, and scenario planning. Strategic initiatives are vetted by the executive team and approved by the Board, ensuring alignment with long-term vision and risk appetite.
Key performance indicatoRs and milestone tracking tools help in monitoring execution and taking corrective action where necessary. Risk reviews are integrated into business planning cycles, allowing strategy to be revisited based on market feedback or macroeconomic changes.
Asset/Security Risk
Asset or security risk pertains to the potential devaluation of collateral assets, which can affect the recoverability of loans. For the Company, this is particularly relevant in gold loans and other secured lending products.
The Company mitigates asset risk by maintaining conservative loan-to-value ratios and performing regular valuations of collateral assets. In the case of gold loans, the value and purity of the gold are assessed at the time of loan disbuRsement and monitored throughout the loan tenure.
Additionally, the Company employs stress testing to assess the impact of adveRse market conditions on collateral values. This enables the Company to take proactive measures, such as adjusting loan terms or seeking additional collateral, to mitigate potential losses.
Human Capital Risk
Human capital risk involves the potential loss arising from inadequate or ineffective human resource management. This includes risks related to talent acquisition, retention, employee engagement, and succession planning.
Succession planning is an integral part of the CompanyRss human resource strategy, ensuring continuity in leadeRship and critical roles. Performance management systems are in place to align individual goals with organisational objectives and to identify and address performance gaps.
Economic Risk
Economic risk encompasses the potential impact of macroeconomic factoRs such as inflation, interest rates, GDP growth, and unemployment on the CompanyRss operations and profitability.
The Company monitoRs key economic indicatoRs and incorporates economic forecasts into its strategic planning and risk management processes. Scenario analysis and stress testing are conducted to assess the potential impact of adveRse economic conditions on the CompanyRss financial position.
DiveRsification of the loan portfolio across sectoRs and geographies helps to mitigate the impact of localised economic downturns. Additionally, the Company maintains adequate capital buffeRs and liquidity reserves to withstand economic shocks.
Human Resource Management Internal Control
The Company has established a robust internal control framework to ensure operational efficiency, regulatory compliance, and risk mitigation across its financial services operations. These controls cover key functions such as credit underwriting, disbuRsement, collections, finance, compliance, and IT. A clear organisational structure with defined responsibilities, system-based checks, and documented policies supports accountability and transparency. Internal controls are embedded within core processes through maker-checker mechanisms, approval hierarchies, and automated validations to minimise manual erroRs and prevent unauthorised activities. The internal audit function operates independently and reports to the Audit Committee of the Board. It conducts regular, risk-based audits across branches and departments to assess control effectiveness, identify gaps, and recommend improvements. Corrective actions are monitored to ensure timely closure. The Company emphasises internal control over financial reporting to ensure the accuracy and reliability of financial disclosures. Technological tools and dashboards enable real-time monitoring of key metrics and deviations. Employees are trained periodically on control procedures and compliance expectations to foster a culture of responsibility. As the business grows and adopts digital solutions, the internal control framework is continuously strengthened to align with evolving risks. Overall, the CompanyRss internal control systems are adequate, proactive, and integral to maintaining operational integrity and stakeholder confidence.
Cautionary Statement
Certain statements in the Management Discussion and Analysis describing the CompanyRss objectives, predictions may be Rsforward-looking statementsRs within the meaning of applicable laws and regulations. Actual results may vary significantly from the forward-looking statements contained in this document due to various risks and uncertainties. These risks and uncertainties include the effect of economic and political conditions in India, volatility in interest rates, new regulations and Government policies that may impact the CompanyRss business as well as its ability to implement the strategy. The Company does not undertake to update these statements.
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+91 9892691696
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