Real Touch Finance Ltd. Management Discussions

Real Touch Finance Limited is a Non-Banking Financial Company (NBFC) registered with the Reserve Bank of India (RBI). The company offers a wide range of financial services, including Loan against Property (LAP), Personal Loans, and Structured Loans to Micro and Small Enterprises, along with financing in the Real Estate sector and funding to other NBFCs into impact lending Space. Headquartered in Kolkata, Real Touch Finance operates across West Bengal and Tamil Nadu. In line with its growth strategy and expansion plans, the company has established several branch offices across Tamil Nadu, including locations such as Chennai, Kancheepuram, Thiruvallur, Villupuram, Areni, Vandavasi, Chengalpattu, Thiruvannamalai, and Tindivanam. Indias economy has experienced robust growth in recent years, driven by several key factors such as structural reforms, increased public and private investment, a thriving digital economy, and a focus on financial inclusion. These developments have contributed significantly to the growth of the NBFC sector, providing new opportunities to expand their footprint and serve a broader customer base.

Business Environment

1. Global Economic Overview

The global economy has continued its recovery through 2024 into 2025, with the IMF projecting a stable GDP growth of around 3.0%, supported by easing inflation, recovering global trade, and improving investor and consumer confidence. Advanced economies are expected to grow at a modest pace of 1.4% 1.5%, while emerging markets, particularly India, are forecast to expand at a stronger rate of 3.7% 3.9%, driven by domestic consumption, digital innovation, and structural reforms. These macroeconomic trends present significant growth opportunities for NBFCs, especially in core lending products such as Loan Against Property (LAP), real estate loans, and personal loans, where credit demand remains strong across self-employed, MSME, and retail segments. The rapid acceleration of digital payments and fintech adoption led by Indias UPI ecosystem processing over 18 billion monthly transactions is transforming credit delivery, enabling NBFCs to expand reach through data-driven underwriting and digital platforms. Simultaneously, rising urbanization and stable real estate demand are supporting LAP and mortgage-backed financing, while evolving consumer behavior continues to drive demand for unsecured personal loans. However, global risks such as elevated debt levels, interest rate volatility, geopolitical tensions, and regulatory oversight remain key challenges. Despite this, the strong fundamentals of the Indian economy, combined with increasing financial inclusion and technology-driven lending models, position NBFCs for sustained growth and deeper market penetration in the years ahead.

2. Indian Economic Overview

Indias economy continues to demonstrate strong momentum, emerging as one of the fastest-growing major economies globally. For FY 2025, GDP growth is projected in the range of 6.5% 6.8%, supported by robust domestic demand, rising private consumption, and sustained government initiatives focused on infrastructure development and manufacturing. This favorable macroeconomic environment, along with improved credit offtake and increasing financial inclusion through digital channels, offers a strong platform for Non-Banking Financial Companies (NBFCs) to expand their lending portfolios across both secured and unsecured segments. Demand for Loan Against Property (LAP) has remained resilient, driven by increasing property valuations and the financing needs of self-employed individuals and Micro, Small and Medium Enterprises (MSMEs). Similarly, the Personal Loan segment has witnessed substantial growth, propelled by rising consumer aspirations, higher discretionary spending, and the proliferation of digitally enabled lending platforms.

Structured financing to Micro and Small Enterprises (MSEs) is also gaining traction, supported by policy frameworks such as the Emergency Credit Line Guarantee Scheme (ECLGS) and the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE). These developments have underscored the critical role NBFCs play in addressing the credit gap often left by traditional banking institutions. The real estate sector has shown signs of sustained recovery, especially in residential and affordable housing segments, with increasing demand from Tier II and Tier III cities. This has created a steady pipeline for NBFCs engaged in project financing, developer funding, and construction-linked lending. An emerging and strategically important segment is product funding to other NBFCs operating in the impact lending space. These are institutions focused on socially responsible financing supporting sectors such as education, healthcare, clean energy, and microfinance. By extending capital to these impact-focused NBFCs, larger institutions like Real Touch Finance Limited enable deeper financial penetration into underserved communities and promote inclusive economic development. Despite these opportunities, the sector must remain vigilant to challenges such as elevated interest rates, inflationary pressures, and asset quality risks. Prudent underwriting practices, strong risk management frameworks, and regulatory compliance will be key to sustaining growth. Nonetheless, the increasing formalization of the economy, expansion of digital infrastructure, and the sectors ability to deliver agile, customized financial solutions position NBFCs as pivotal enablers in Indias next phase of economic growth.

3. Non-Banking Financial Sector Overview

The Non-Banking Financial Company (NBFC) sector in India continues to play a pivotal role in bridging the credit gap, particularly in segments underserved by traditional banks, such as self-employed individuals, micro and small enterprises (MSEs), and semi-urban and rural borrowers. During FY 2024 25, the sector has entered a phase of renewed growth and structural strengthening, building on the consolidation efforts and regulatory recalibrations of the previous year. The industry benefited from robust credit demand across personal loans, loan against property (LAP), MSME financing, and real estate lending, driven by rising consumer confidence, improved formalization of small businesses, and increased urban housing demand. Asset quality has continued to improve, with Gross Non-Performing Assets (GNPA) ratios declining steadily, supported by enhanced underwriting standards, digitized risk assessment tools, and portfolio diversification strategies. Capital adequacy and liquidity positions remain strong, enabling NBFCs to maintain lending momentum despite elevated borrowing costs and tighter financial conditions. Regulatory measures introduced by the Reserve Bank of India (RBI) such as strengthened norms on asset classification, capital provisioning, and liquidity coverage have significantly improved transparency, governance, and operational discipline across the sector. However, NBFCs continue to face headwinds, including rising cost of funds, competitive pressure from both banks and fintechs, and the need for continuous investment in digital transformation to meet evolving customer expectations. The growing adoption of digital lending platforms, API-based integrations, and data-driven credit models has become a strategic imperative to enhance customer reach, reduce turnaround time, and improve operating efficiency. Overall, the NBFC sector in FY 2024 25 is well-positioned to grow sustainably, driven by a resilient domestic economy, favorable credit demand, and a more robust regulatory foundation, while also navigating the challenges of an increasingly competitive and tech-driven financial ecosystem.

Companys Financial Performance FY 2024-25