MAS Financial Services Ltd Management Discussions

ECONOMIC OVERVIEW

Global Economy

The global economic landscape in FY2025 has entered a period of heightened uncertainty, shaped by shifting policy priorities, intensified trade tensions, and a fragile recovery from recent global shocks. According to the International Monetary Funds World Economic Outlook (April 2025), titled "A Critical Juncture amid Policy Shifts", the global economy faces a challenging road ahead.

World Economic Outlook (April 2025) Real GDP Growth Projections (% change))

Following a brief phase of stabilization, global growth is projected to decelerate to 2.8% in 2025, a notable downgrade from earlier forecasts and well below the historical average of 3.7% (2000–2019). This revision stems primarily from sweeping tariff measures introduced by the United States and retaliatory actions by its trading partners. Such developments have not only introduced fresh obstacles to trade and investment flows but also heightened the unpredictability of policy directions. The OECDs Economic Outlook (June 2025) observed that GDP growth in the United States is projected to decline from 2.8% in 2024 to 1.6% in 2025 and 1.5% in 2026. In the euro area, growth is projected to strengthen modestly from 0.8% in 2024 to 1.0% in 2025 and 1.2% in 2026. Chinas growth is projected to moderate from 5.0% in 2024 to 4.7% in 2025 and 4.3% in 2026. Inflationary pressures have resurfaced in some economies. Higher trade costs in countries raising tariffs are expected to push inflation up further, although the impact will be partially offset by weaker commodity prices. Annual headline inflation in the G20 economies is collectively expected to moderate from 6.2% to 3.6% in 2025 and 3.2% in 2026.

Risks to this outlook remain tilted to the downside. Escalating geopolitical tensions, financial market volatility, and weakening international development support could disproportionately impact developing economies, including those reliant on external credit to drive growth and social development.

At this critical juncture, the IMF underscores the need for globally coordinated policy responses that balance internal stability with cross-border cooperation. For India and its vibrant financial ecosystem this global backdrop reinforces the need for resilience, prudent credit deployment, and continued focus on financial inclusion to navigate the evolving environment effectively.

Indian Economy

In the face of persistent global uncertainties and escalating geopolitical tensions, the Indian economy has continued to demonstrate resilience and dynamism. According to the Reserve Bank of Indias March 2025 bulletin, Indias macroeconomic fundamentals remain strong, buoyed by domestic demand, policy stability, and structural reforms.

Steady GDP Growth with Broad-Based Recovery

Indias GDP is projected to grow at a robust 6.5% in FY 2024–25, driven by broad-based momentum in consumption, investment, and public spending. Key sectors such as construction, trade, and financial services continued to lead the recovery, reflecting the sustained impact of infrastructure push and credit-led expansion.

Note: Figure for FY 2023-24 and FY 2024-25 are as per the First Revised Estimates; Estimate for FY 2025-26 is as per RBI Issues April 2025 Policy Update.

Moderation in Inflation and Liquidity Stability

Consumer price inflation eased to a seven-month low of 3.6% in February 2025, largely due to a decline in vegetable prices. However, core inflation remained slightly elevated at 4.1%, underscoring underlying price pressures in non-food segments. Continued monetary and fiscal measures have helped ensure adequate market liquidity and support economic activity.

External Sector and Currency Dynamics

Despite a volatile global environment, Indias external sector has remained stable. Nonetheless, sustained foreign portfolio investor (FPI) outflows have exerted pressure on capital markets and the rupee. While domestic investors have stepped in to provide stability, currency depreciation remains a risk that warrants close monitoring.

Employment and Labour Market Conditions

Employment generation has shown notable improvement, particularlyinmanufacturingandservices.Themanufacturing sector posted its second-fastest job growth since the inception of the PMI survey, while services also reported healthy expansion in employment, reflecting robust demand conditions. Urban unemployment declined to a historic low of 6.4%, reinforcing confidence in the domestic growth story.

Indias Global Economic Standing

Indias economic ascent continues at a remarkable pace. With a GDP of USD 4.3 trillion by the end of FY 2024-25—just behind Japans USD 4.4 trillion—India is poised to become the fourth-largest economy globally in the coming months. With sustained growth, India is projected to surpass Germany (GDP: USD 4.9 trillion) by 2027, securing its position as the third-largest economy in the world. However, India has a long way to go, lagging far being Chinas GDP of USD 19.5 trillion for 2025.

Liquidity and Financial Markets

During FY 2024–25, liquidity conditions in the Indian financial system saw a marked improvement following timely interventions by the Reserve Bank of India and higher government spending. These actions helped to stabilise short-term borrowing costs across the banking and corporate debt markets. The RBIs proactive stance, including a 25 basis point reduction in the policy repo rate to 6.0% in April 2025, reflects a calibrated approach to supporting economic recovery while maintaining price and financial stability. The central bank has reiterated its commitment to monitoring liquidity and market conditions, ensuring the continued resilience of Indias financial system.

Outlook

Looking ahead, the RBIs outlook for the Indian economy remains cautiously optimistic. In its April 2025 Monetary Policy Report, the central bank projected GDP growth at 6.5% for FY 2025–26, with inflation expected to stay within the 4% target band. Easing inflationary pressures, particularly in food prices, combined with the central banks supportive policy stance, are expected to further stimulate consumption and investment. Nevertheless, the RBI highlighted certain risks, including global financial volatility, potential currency pressures, and persistent FPI outflows, which could impact markets and the rupee.

The UN, however, has revised Indias economic growth forecast for 2025 downward to 6.3%. But despite a projected moderation, it expects that the country remains one of the fastest-growing large economies, supported by resilient consumption and government spending.

As India continues on its growth trajectory, the country is set to consolidate its position as one of the worlds leading economies, presenting opportunities for sustainable growth across sectors—including the financial services landscape in which MAS operates.

INDUSTRY OVERVIEW

Financial Services Industry

Indias financial services industry continues to serve as a key pillar of the countrys economic progress, marked by strong regulatory oversight, rising financial inclusion, and increasing adoption of digital solutions. Spanning a wide range of participants—including banks, NBFCs, insurance companies, mutual funds, and fintech platforms—the sector has evolved rapidly, catering to a growing and increasingly diverse customer base.

A notable trend driving this evolution is the steady expansion of credit across segments. Demand for financing remains strong, particularly from Micro, Small and Medium Enterprises (MSMEs), first-time homebuyers, and vehicle owners—segments that are vital to economic development and employment generation. NBFCs continue to play a pivotal role in serving these underserved and emerging segments, offering customized financial products and last-mile delivery.

The rapid rise of fintech and digital finance is transforming how financial services are accessed and delivered, bringing millions into the fold of formal finance. At the same time, traditional players are evolving through innovation and strategic partnerships. Regulatory bodies such as the Reserve Bank of India (RBI), SEBI, and IRDAI continue to play a pivotal role in strengthening governance, enhancing transparency, and fostering financial inclusion.

The growth of retail credit, including housing and vehicle finance, has been supported by rising income levels, urbanisation, and improved access to formal credit. Additionally, MSME lending has received a boost from policy initiatives aimed at improving liquidity, easing collateral norms, and enhancing credit guarantee mechanisms.

As the regulatory environment remains conducive and the credit appetite in tier-2 and tier-3 cities continues to grow, NBFCs are well-positioned to deepen their impact by bridging credit gaps and enabling inclusive, opportunity-led growth across the Indian economy.

NBFCs in India

Indias financial services landscape has undergone a transformative shift, with Non-Banking Financial Companies (NBFCs) playing an increasingly pivotal role in fostering credit access and financial inclusion. By addressing the gaps left by traditional banks, NBFCs have emerged as agile and innovative lenders, particularly in segments such as personal finance, vehicle loans, microloans, and SME funding. According to the Reserve Bank of India, NBFCs now account for nearly a quarter of total credit in the financial system—underscoring their growing relevance.

Retail loans have been at the forefront of this growth, driven by rising disposable incomes, evolving consumer aspirations, and increased awareness of credit availability. Home loans, personal loans, and vehicle financing dominate this segment, while categories like education and consumer durable loans are also witnessing momentum. In 2024 alone, the retail loan market expanded by approximately 18%, with demand especially strong in urban and semi-urban geographies. Digital platforms, faster loan processing, and models like Buy Now, Pay Later (BNPL) have made access to credit more seamless than ever.

Looking ahead to 2025, key themes will shape the sectors trajectory. Technology adoption—especially AI, ML, and blockchain—will enhance credit risk management and customer experience. Expansion into Tier-2 and Tier-3 cities will unlock new growth, as lenders tailor products and communication to regional needs. Regulatory developments, particularly co-lending frameworks and stricter compliance norms, are expected to improve sectoral resilience. Additionally, ESG-aligned lending and partnerships between NBFCs, fintechs, and banks will further diversify the sectors impact and outreach.

With analysts projecting a robust 15–20% CAGR and retail loans expected to cross 20 lakh crore in value, NBFCs are poised to be major contributors to Indias consumption-led growth. Their ability to adapt swiftly and responsibly will be instrumental in achieving national financial inclusion goals, making 2025 a year of both opportunity and transformation. (Source: IANS)

MSME Sector

The Micro, Small, and Medium Enterprises (MSME) sector continues to play a foundational role in Indias economic landscape, contributing significantly to employment, exports, and industrial output. As of February 2025, over 5.93 crore MSMEs were registered on the Udyam Portal, providing livelihoods to more than 25 crore individuals and accounting for nearly 46% of Indias total exports in FY24. Recognizing this impact, the Union Budget 2025–26 has introduced progressive measures aimed at strengthening and scaling the MSME ecosystem.

Key among these reforms is the upward revision of investment and turnover limits under the MSME classification. This change, expected to take effect from April 1, 2025, is designed to encourage growth and formalisation while ensuring continued access to government benefits such as priority sector lending, tax reliefs, and procurement preferences. Additionally, the government has expanded the credit guarantee cover, especially for micro-enterprises, export-focused MSMEs, and startups, further easing the path to capital access.

The launch of the Udyam Assist Platform marks a critical shift in formalising micro-enterprises and extending formal credit and policy benefits to businesses that had traditionally remained outside the formal sector. Moreover, targeted interventions in labour-intensive sectors such as leather, toys, and footwear are expected to raise productivity and employment. (Source: PIB, msme.gov.in)

Housing Finance

Indias housing finance market is on a robust growth path, poised to more than double in the next five years—from 33 lakh crore (US$ 378 billion) to 81 lakh crore (US$ 928 billion), as per CareEdge Ratings. This trajectory is being shaped by a confluence of structural tailwinds, rising urban aspirations, and sustained policy impetus, making housing finance one of the most promising segments in the financial services landscape.

A notable trend shaping the sector is the shift towards higher-ticket housing loans, driven by premiumisation in Indias real estate market. Homebuyers are increasingly opting for larger and more premium homes, leading to a rise in average loan sizes. HFCs that focus on semi-urban and underserved markets are well-positioned to tap into both affordable housing and mid-segment housing demand by aligning their offerings with evolving customer preferences.

Government initiatives such as the Pradhan Mantri Awas Yojana, interest subvention schemes, and regulatory support for affordable housing continue to play a catalytic role. Moreover, rapid urbanisation, increased financial awareness, and rising disposable incomes are creating a conducive environment for housing credit expansion.

Automobiles

The Indian automobile industry remains a vital barometer of economic health, contributing significantly to both macroeconomic growth and technological innovation. Its close linkage with consumption trends, infrastructure expansion, and manufacturing output makes it a critical sector in Indias development narrative. This sector also represents a key lending opportunity, particularly in vehicle financing for two-wheelers, commercial vehicles, and rural mobility solutions.

The two-wheeler segment continues to lead the market in terms of volume, driven by rising income levels, a youthful population, and increasing demand for personal mobility across both urban and rural areas. Rural market penetration has further strengthened this trend, supported by targeted financing solutions and distribution strategies. NBFCs with a strong rural and semi-urban presence, remain well-positioned to cater to this growing demand through tailored financing products.

Meanwhile, commercial vehicle demand is gaining momentum on the back of growing logistics, infrastructure, and passenger transportation needs. With India aiming to boost domestic manufacturing and build world-class logistics networks, the commercial vehicle segment is expected to see sustained growth.

Looking ahead, electrification is emerging as a defining trend, particularly in three-wheelers and small passenger vehicles. The governments EV-friendly policies, expanding charging infrastructure, and rising environmental consciousness are reshaping the landscape. These changes open up new avenues for financing models, especially in last-mile mobility solutions.

India continues to maintain a robust global presence in the heavy vehicles space, being the worlds largest tractor producer, second-largest bus manufacturer, and third-largest manufacturer of heavy trucks.

In FY2024-25, India produced 31 million vehicles across passengervehicles,two-andthree-wheelers,andquadricycles compared to 28.4 million in the previous year.

Recent sales figures from SIAM paint a positive picture. Total domestic vehicle sales witnessed a 7.33% increase in FY25, to reach 25.6 million units. Two-wheelers experienced significant growth, climbing by 9%.

Domestic Sales Trends

Category	2019-20	2020-21	2021-22	2022-23	2023-24	2024-25
Passenger Vehicles	27,73,519	27,11,457	30,69,523	38,90,114	42 18,750	43,01,848
Commercial Vehicles	7,17,593	5,68,559	7,16,566	9,62,468	9,68,770	9,56,671
Three Wheelers	6,37,065	2,19,446	2,61,385	4,88,768	6,94,801	7,41,420
Two Wheelers	1,74,16,432	1,51,20,783	1,35,70,008	1,58,62,771	1,79,74,365	1,96,07,332
Quadricycles	942	-12	124	725	725	120
Grand Total	2,15,45,551	1,86,20,233	1,76,17,606	2,12,04,846	2,38,57,411	2,56,07,391

Source: SIAM

Export Trends

Category	2019-20	2020-21	2021-22	2022-23	2023-24	2024-25
Passenger Vehicles	6,62,118	4,04,397	5,77,875	6,62,891	6,72,105	7,70,364
Commercial Vehicles	60,379	50,334	92,297	78,645	65,818	80,986
Three Wheelers	5,01,651	3,93,001	4,99,730	3,65,549	2,99,977	3,06,914
Two Wheelers	35,19,405	32,82,786	44,43,131	36,52,122	34,58,416	41,98,403
Quadricycles	5,185	3,529	4,326	2,280	4,178	6,422
Grand Total	47,48,738	41,34,047	56,17,359	47,61,487	45,00,494	53,63,089

Source: SIAM

According to SIAM, all segments of the industry are expected to continue with the growth momentum in FY 2025–26, building on the robust performance of recent years due to stable macroeconomic conditions, proactive policies, and infrastructure spending by the government. A normal monsoon in 2025 is expected to support broader economic activity, especially in rural and semi-urban regions, which would be a tailwind for auto sector demand. The sector will also benefit from the reforms in the personal income tax announced in the recent Union Budget of 2025-26, which has been followed by two back-to-back rate cuts by RBI. These measures would help in creating demand by increased accessibility of vehicle financing.

COMPANY OVERVIEW

MAS Financial Services Limited (MAS) is a specialized Non-Banking Financial Company (NBFC) registered with the Reserve Bank of India, founded in 1995 with a mission to serve the credit needs of the underserved and unbanked sections of society. Headquartered in Ahmedabad, MAS has consistently pursued financial inclusion through efficient and scalable credit delivery across urban, semi-urban, and rural India.

With three decades of experience, MAS has developed a robust and diversified lending platform tailored to the needs of lower and middle-income segments. Its product offerings include Micro Enterprise Loans, SME Loans, Two-Wheeler Loans, Commercial Vehicle Loans, Salaried Personal Loans, and Housing Loans through its subsidiary, MAS Rural Housing & Mortgage Finance Ltd. (MRHMFL).

Distribution Network

The Company operates through a well-established distribution model comprising 204 direct branches and 200 active NBFC partnerships, reaching over 9.25 lakh active loan accounts across 14,500+ customer locations in 13 states and union territories. This hybrid model of direct and partner-led distribution allows MAS to offer last-mile credit delivery while maintaining lean operations and ensuring risk diversification.

Partnerships with Various NBFCs

MAS has strategically built deep relationships with its partner NBFCs and MFIs, offering capital, operational expertise, and shared responsibility for credit risk. This partner-driven sourcing framework helps MAS reach remote geographies and scale its business sustainably without over-relying on any one partner.

As on March 31, 2025, MAS had active partnership with 200 NBFC/MFIs. The company had 552 sourcing intermediaries for its Commercial Vehicle Loan Segment and 135 for Two Wheeler Loans.

MAS remains committed to its vision of being one of the most efficient distributors of financial services and continues to innovate across credit, technology, and operational processes to enhance reach and improve customer experience.

Region wise NBFCs and NBFC-MFI Partners - FY 2024-25

BUSINESS PERFORMANCE

Business Performance

MAS Financial Services continues to offer a broad spectrum of financial products tailored to the diverse needs of Indias underserved and underbanked low- and middle-income population. Through a well-calibrated mix of credit solutions, the Company remains focused on enabling entrepreneurship, supporting livelihoods, and promoting financial inclusion across urban, semi-urban, and rural geographies.

As on March 31, 2025, MAS had a total AUM of 12,100 Crore, with micro-enterprise and SME loans accounting for the majority of its portfolio. The Company has maintained strong asset quality with net Stage 3 assets at 1.62%, supported by rigorous credit underwriting and risk management systems. Its capital adequacy ratio stood at a healthy 24.72%, with Tier-I capital at 22.58%.

Micro Enterprise Loans (MEL)

Micro Enterprise Loans remain a core offering for MAS, serving over 190 business categories including retailers, small manufacturers, service providers, and local traders. These loans typically range from 0.50 lakh to 10 lakh and are aimed at supporting income-generating activities in the informal and semi-formal economy. During FY 2024–25, MAS disbursed a total of 5,125.28 crore in MEL loans. As of March 31, 2025, the MEL portfolio had grown to 4,793.37 crore in AUM, reflecting a year-on-year growth of 9.31% over the same period last year.

Small and Medium Enterprise (SME) Loans

The SME loan segment supports business expansion and working capital needs for small and medium-sized enterprises engaged in manufacturing, trading, and services. These loans, with ticket sizes ranging from 10 lakh to 5 crore, are typically used for acquiring machinery, industrial properties, or financing operational cycles. During FY 2024–25, MAS disbursed a total of 4,227.72 crore in SME loans. As of March 31, 2025, SME loan AUM stood at 4,502.36 crore, marking a robust 20.58% year-on-year growth.

Two-Wheeler Loans

MAS provides two-wheeler loans to a diverse set of borrowers including farmers, small business owners, professionals, and salaried individuals. These loans cater primarily to customers in semi-urban and rural geographies and typically range from

25,000 to 1.50 lakh. Two-wheeler finance plays a crucial role in improving last-mile connectivity and enabling income-generating opportunities. During FY 2024–25, MAS disbursed a total of 665.80 crore in Two-Wheeler Loans. The total AUM for this segment as on March 31, 2025 stood at 785.17 crore, compared to 670.12 crore in the previous year.

TWO-WHEELER AND COMMERCIAL VEHICLE LOANS (WHEELS PORTFOLIO)

The Wheels Portfolio of MAS Financial Services, comprising Two-Wheeler and Commercial Vehicle Loans, continues to support mobility and livelihood creation across the economic spectrum, particularly in underserved regions.

Commercial Vehicle Loans

MAS provides commercial vehicle loans majorly for used vehicles with ticket sizes ranging from

1 lakh to 15 lakh. These loans enable individuals and small businesses to expand their logistics, transport, and distribution capabilities, contributing to economic productivity. In FY 2024–25, total disbursements under this category amounted to 734.33 crore. As on March 31, 2025, the AUM for Commercial Vehicle Loans stood at

979.39 crore, up from 747.66 crore in the previous year.

SALARIED PERSONAL LOANS

MAS entered the Salaried Personal Loans segment in FY 2022–23 to broaden its retail lending portfolio,cater to the personal credit needs of salaried individuals, and to create presence on the consumption side of the economy. These loans are offered to employees of approved companies, with ticket sizes of up to 5 lakh. Designed to meet immediate personal or family requirements, this product has witnessed encouraging traction since its launch.

During FY 2024–25, MAS disbursed Salaried Personal Loans worth 1,146.95 crore. As on March 31, 2025, the total AUM for this segment stood at 1,039.52 crore, up from 588.86 crore at the end of FY2023–24. The growth reflects increased customer acceptance and the Companys continued focus on expanding its presence within this category through both direct sourcing and strategic tie-ups.

HOUSING LOANS

MAS Rural Housing & Mortgage Finance Ltd. (MRHMFL), a subsidiary of MAS Financial Services, operates as a Housing Finance Company (HFC) registered with the National Housing Bank. Established in 2007, MRHMFL aims to extend affordable housing credit to low- and middle-income borrowers, especially in semi-urban and rural regions, where formal mortgage penetration remains low.

MRHMFL offers loans for the purchase, construction, or renovation of residential units, as well as for the acquisition and development of commercial properties. The subsidiary also provides project finance to developers engaged in constructing affordable housing projects. In FY2024–25, MRHMFL disbursed a total of 272.59 crore of loans, further advancing MASs vision of inclusive credit delivery.

As on March 31, 2025, the AUM for MRHMFLs business stood at 768.09 crore as compared to 596.29 crore as on March 31, 2024.

FINANCIAL HIGHLIGHTS ( in Crore)

Particulars	Standalone		Consolidated
	Year Ended on	Year Ended on	Year Ended on	Year Ended on
	March 31, 2025	March 31, 2024	March 31, 2025	March 31, 2024
Revenue from Operations	1517.19	1221.86	1,595.97	1,283.87
Other Income	3.26	7.42	4.18	6.52
Total Income	1,520.45	1,229.28	1,600.15	1,290.39
Total Expenditure	1,110.02	897.86	1,179.14	950.72
Profit Before Tax	410.43	331.42	421.01	339.67
Provision for Taxation (Including Current Tax, Deferred	104.50	83.67	107.03	85.66
Tax & Income Tax of earlier Years)
Net Profit	305.93	247.75	313.98	254.01
Profit Brought Forward	845.91	674.61	850.75	679.63
Profit attributable to minority shareholders			(3.60)	(2.96)
Effect of changes in the Groups interest			(1.12)	(2.28)
Item of other comprehensive income recognised directly in retained earnings - on defined benefit plan	(0.55)	(0.39)	(0.56)	(0.38)
Profit Available for Appropriation	1,151.29	921.97	1159.45	928.02
APPROPRIATIONS:
Transfer to reserve u/s 45-IC of RBI Act, 1934	(61.18)	(49.55)	(61.19)	(49.55)
Transfer to reserve u/s 29-C of NHB Act, 1987			(1.67)	(1.21)
Final Dividend on Equity Shares	(9.24)	(10.11)	(9.25)	(10.11)
Interim Dividend on Equity Shares	(18.14)	(16.40)	(18.15)	(16.40)
Dividend Distribution Tax on Equity Shares
Surplus Balance carried to Balance Sheet	1,062.73	845.91	1,069.19	850.75

Details of significant changes in Key Financial Ratios

During FY 2024-25, there were no significant changes

(changes exceeding 25% or more as compared to the immediately previous financial year) in Key Financial Ratios

Details of changes in Ratios

On a standalone basis, during FY 2024-25, the Debt Equity Ratio was 3.37 times in FY 2024-25 as compared to 4.00 times for FY 2023-24. The Interest Coverage Ratio was 1.57 times in FY 2024-25 as compared to 1.54 times for FY 2023-24. The Companys return on net worth stood at 14.11% in FY 2024-25 as compared to 16.31% for FY 2023-24.

LIABILITY MANAGEMENT

MAS Financial Services considers liability management a cornerstone of its business strategy. The Companys prudent approach has enabled it to successfully navigate sectoral challenges, meet its regulatory obligations, and ensure uninterrupted access to funding from a diverse pool of lenders.

Over the years, MAS has built and nurtured strong relationships with a wide network of leading banks and financial institutions. These partnerships are anchored in the Companys track record of responsible fund management, disciplined financial practices, and commitment to long-term value creation for all stakeholders.

The Company continues to manage its Asset Liability Management (ALM) framework with strategic intent, ensuring a balanced mix of borrowings across instruments such as term loans, debentures, cash credit facilities, and direct assignment transactions. This diversified funding strategy allows MAS to optimize cost of capital, match asset-liability durations, and minimize liquidity risks.

As on March 31, 2025, MASs total borrowings stood at 8,722.39 crore. A significant share of the asset book—approximately 85%—comprises loans that qualify for Priority Sector Lending (PSL), further enhancing the Companys appeal to institutional lenders. MAS also maintains a healthy off-book portfolio through co-lending and direct assignment arrangements, which are structured with door-to-door maturity and without recourse to the Company. The target remains to keep 20% to 25% of total AUM off-book, thereby strengthening capital efficiency and enhancing liquidity buffers.

This balanced and disciplined approach to liability management continues to be integral to MASs growth trajectory and its ability to deliver sustainable returns.

MAS Financial Services continues to follow prudent and proactive liquidity management practices to ensure uninterrupted business operations and financial resilience. The Company maintains a robust cash credit facility, with a total sanctioned limit of approximately 1,400 crore spread across 13 banking partners. Utilization levels are consistently maintained in the range of 65% to 70%, enabling MAS to preserve ample headroom and liquidity at all times.

As on March 31, 2025, the Company maintained the average liquidity of approximately 900 crore and an unutilized cash credit facility of approximately 350 crore. In addition to these buffers, MAS held sanctioned but undrawn limits of approximately 3,000 crore across instruments such as term loans, non-convertible debentures (NCDs), direct assignment, and co-lending transactions. These additional lines of funding enhance the Companys financial flexibility and readiness to capitalize on growth opportunities.

MAS has carried out a detailed structural liquidity assessment for the period ending March 31, 2025, and has concluded that there is no adverse liquidity impact. The Company has also undertaken rigorous stress-testing of its liquidity position under multiple scenarios and remains comfortably placed to meet all its debt servicing obligations throughout the year.

By maintaining a disciplined approach to liquidity and capital planning, MAS ensures its ability to withstand external shocks, support business growth, and deliver long-term value to stakeholders.

RESOURCE MOBILISATION

MAS Financial Services follows a prudent and diversified approach to resource mobilisation, ensuring stable funding, optimal cost of capital, and alignment with its asset-liability strategy. The Company continues to expand and strengthen its funding base through equity, long-term borrowings, capital market instruments, and structured off-book transactions.

Share Capital

As on March 31, 2025, the issued and paid-up Equity Share Capital of the Company stood at 181.45 crore, comprising 18.15 crore equity shares of 10 each. The capital base continues to provide a strong foundation for growth while maintaining adequate headroom for future expansion.

Term Loans

During FY2024–25, the Company secured fresh term loans amounting to approximately 2,850 crore from a diverse set of banking partners. These borrowings had an average tenure of approximately four years, in line with MASs strategy to match long-term funding with the asset maturity profile and ensure robust Asset Liability Management (ALM).

Assignment of Loan Portfolio / Co-Lending

MAS actively pursued off-book asset generation through direct assignment and co-lending partnerships during the year. In FY2024–25, portfolio assignment and co-lending transactions aggregated to approximately 2,450 crore. These arrangements enhance operational efficiency, reduce balance sheet leverage, and enable deeper credit penetration, particularly in semi-urban and rural markets.

Non-Convertible Debentures (NCDs)

To diversify its liability mix and access longer-tenor capital, MAS raised 1000 crore through the issuance

CREDIT RATINGS of Non-Convertible Debentures (NCDs) in FY2024–25. NCDs continue to be a key component of the Companys borrowing strategy, offering flexibility in structuring and investor diversification.

DURING THE YEAR, THE RATING AGENCIES REAFFIRMED/ISSUED/ UPGRADED RATINGS OF VARIOUS FACILITIES TO THE COMPANY, AS UNDER:

Type of Instrument	Rating
1 Long Term Bank Facilities	ACUITE AA; Stable
2 Commercial Papers	ACUITE A1+
3 Non-Convertible Debentures	ACUITE AA; Stable
4 Long Term Bank Facilities	CARE AA-; Stable
5 Commercial Papers	CARE A1+
6 Non-Convertible Debentures	CARE AA-; Stable
7 Subordinated Bond	CARE AA-; Stable

CAPITAL MANAGEMENT

MAS Financial Services remains committed to sound capital management practices that balance growth, stability, and compliance. The Company aims to maximize returns on capital employed while operating within the regulatory framework prescribed by the Reserve Bank of India (RBI).

By employing disciplined capital allocation strategies, MAS ensures that its operations remain adequately capitalized at all times, supporting sustainable business expansion without compromising financial prudence. The Company maintains a well-capitalized balance sheet, leveraging internal accruals and external funding judiciously. This approach enables MAS to strengthen its long-term financial position and deliver consistent value to its stakeholders.

Through continuous improvement in capital management systems, processes, and controls, MAS seeks to enhance capital efficiency and ensure the availability of adequate buffers for future growth and economic uncertainties.

CREDIT AND RISK MANAGEMENT

Risk management forms the cornerstone of MASs operational philosophy. The Company acknowledges that effective risk identification, assessment, and mitigation are essential to safeguard its assets and ensure long-term sustainability. Risks may originate from both internal and external sources, and MAS has built a robust risk management framework to address these challenges proactively.

The Company defines its risk appetite through well-articulated policies, functional controls, and key risk indicators (KRIs), all of which are reviewed periodically. Its enterprise-wide risk framework includes structured processes such as risk assessments, maintenance of a comprehensive risk catalogue, implementation of a risk appetite statement, and cultivation of a strong risk-aware culture.

MAS adopts a product-specific credit appraisal approach tailored to customer profiles, loan purpose, and exposure levels. To mitigate credit risk, the Company employs a combination of in-house analytics, bureau checks, and dynamic credit scoring models. The credit and collections teams work closely to align policies and manage delinquencies, which are monitored continuously at both the senior and middle management levels.

As of March 31, 2025, MASs net Non-Performing Assets (NPAs) stood at 1.62% of total AUM. During the year, the average loan tenure across portfolios was approximately 17 months. To further manage interest rate and credit risk, the Company focuses on maintaining adequate lending spreads, offering predominantly short-tenure loans, and resetting interest rates periodically.

MAS also benefits from a well-diversified borrower base—both inter- and intra-segment—catering to a broad range of sectors and customer profiles. This diversification acts as a natural hedge against market volatility and macroeconomic shocks. The Company continuously monitors economic trends and remains agile in adjusting its strategies to protect asset quality and business continuity.

OPPORTUNITIES & THREATS

MAS Financial Services maintains a vigilant and dynamic approach to environmental scanning, enabling the Company to proactively identify emerging opportunities while preparing for and mitigating potential risks. This dual focus supports its strategic agility and sustained growth in a rapidly evolving market.

Opportunities

MASiswell-positionedtoleverageitsstrengthsinacompetitive and expanding financial ecosystem. The Companys pan-India presence, diversified product portfolio, and strong customer connect in the low- and middle-income segments provide significant room for growth. Its unique partnership-led business model minimizes operating costs and credit risk, while ensuring last-mile credit delivery at scale.

With adequate capitalization in place, MAS is poised to support medium- to long-term expansion plans. Its brand continues to gain traction among underserved and semi-formal segments, especially in underpenetrated geographies where the demand for formal credit is rising steadily. Continued government focus on financial inclusion and MSME development provides additional momentum, reinforcing MASs position as a trusted financial partner.

Threats

The Company operates in a dynamic regulatory and competitive landscape. Potential risks include abrupt changes in policy, growing competition from both domestic and global players, and the inherent exposure to customers in semi-formal and informal sectors. MAS remains alert to these challenges and actively reviews its strategies and credit filters to mitigate their impact.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

MAS has implemented a robust internal control framework designed to safeguard assets, ensure regulatory compliance, and maintain operational efficiency across its growing business. The Company has developed and institutionalized standardized processes that are well-aligned with the scale and complexity of its lending operations.

Internal financial controls are embedded across every business function, ensuring statutory compliance and operational discipline. The framework includes clearly defined authority levels, documented procedures, and multi-tiered checks and balances that guide all critical activities—from loan origination to collections and reporting.

The credit assessment process is supported by demographic data, tailored credit scorecards, and risk-based underwriting standards. The Company maintains strict adherence to these protocols while retaining flexibility to adapt to changing market conditions. No compromise is made on the core principles of responsible lending, even as credit screens are refined periodically.

MAS continues to strengthen its monitoring and evaluation mechanisms, especially in relation to its NBFC partners. The exposure matrix, audit trails, and due diligence processes are regularly reviewed and enhanced to reflect operational realities. Operational expenditure is tracked closely, with a view to drive cost efficiency through process improvements and technology integration.

The Audit Committee of the Board provides oversight of the internal control environment, reviews auditor observations, and ensures accountability for addressing control gaps. This includes an evaluation of risk management practices, policy compliance, and control effectiveness across departments.

The internal audit function provides reasonable assurance regarding the effectiveness and efficiency of operations, the integrity of financial reporting, and compliance with applicable laws and regulatory guidelines. MASs focus on continuous improvement ensures that its control environment evolves in step with its growth ambitions.

HUMAN RESOURCES

At MAS Financial Services, employees are regarded as the cornerstone of the Companys continued growth and long-term success. MAS is deeply committed to fostering a supportive, inclusive, and performance-driven work environment where employees are empowered to achieve both personal aspirations and professional excellence.

The Company promotes a culture built on trust, accountability, and respect—an approach that not only inspires employee engagement but also contributes to a high retention rate. MAS encourages collaboration, instils a sense of ownership, and nurtures leadership at every level of the organisation.

To align people strategy with business objectives, MAS continually reviews and refines its HR policies. The Company has instituted structured talent management practices encompassing career development programs, productivity enhancement initiatives, and performance-linked rewards. Learning and Organisational Development (L&OD) remains a key area of focus, with ongoing efforts to upskill the workforce, support leadership development, and build future-ready capabilities.

Leadership at MAS is closely involved in shaping the Companys strategic direction, with senior managers playing a proactive role in mentoring teams and guiding execution. The leadership team comprises experienced professionals with deep expertise in financial services and long-standing associations with the organisation, ensuring continuity, institutional knowledge, and strategic clarity.

As on March 31, 2025, the Companys employee strength stood at 1758 on a standalone basis. MAS remains committed to building a future-ready, agile workforce that will power the Companys mission of inclusive financial empowerment across India.

OUTLOOK

The NBFC sector is poised for sustained growth, driven by rising credit demand, improved regulatory clarity, and deepening financial inclusion. As formal credit continues to reach semi-urban and rural India, NBFCs like MAS are well-positioned to bridge the gap between traditional finance and underserved communities.

MAS will continue leveraging its hybrid distribution model, strong partner network, and prudent underwriting to scale efficiently. Strategic investments in technology and customer experience will support responsible growth and operational resilience.

With a diversified portfolio and robust capital base, MAS remains confident in delivering inclusive and sustainable financial solutions across India.

CAUTIONARY STATEMENT

This document contains statements about expected future events, financial and operating results of MAS, which are forward-looking. By their nature, forward-looking statements require the Company to make assumptions and are subject to inherent risks and uncertainties. There is a significant risk that the assumptions, predictions, and other forward-looking statements will not prove to be accurate. Readers are cautioned not to place undue reliance on forward-looking statements as several factors could cause assumptions, actual future results, and events to differ materially from those expressed in the forward-looking statements. Accordingly, this document is subject to the disclaimer and qualified in its entirety by the assumptions, qualifications and risk factors referred to in the managements discussion and analysis of the Companys Annual Report FY 2024-25.