SPA Capital Services Ltd Management Discussions

GLOBAL

Indias financial services industry continued to witness strong growth during FY2025-26, supported by increasing financialisation of household savings, rising retail investor participation, expanding capital-market activity and rapid adoption of digital financial services. The continued development of Indias asset and wealth-management ecosystem presents significant long-term opportunities, supported by increasing participation from retail and institutional investors and the growing demand for investment and wealth-management products.

The Indian mutual fund industry continued its strong expansion during FY2025-26. According to data reported by the Association of Mutual Funds in India (AMFI) and cited by IBEF, mutual fund Assets Under Management (AUM) stood at Rs.73.73 lakh crore as of March 31, 2026, compared with Rs.66.70 lakh crore as of March 31, 2025. The industry also witnessed sustained growth in investor participation, with the total number of mutual fund folios reaching 28.10 crore as of March 2026. Equity-oriented schemes continued to account for a significant share of folios, reflecting increasing retail participation in financial markets.

Digital financial services continued to expand rapidly during FY2025-26. The Unified Payments Interface (UPI) emerged as a dominant component of Indias digital payments ecosystem, processing approximately 24,161.69 crore transactions during FY2025-26, with a total transaction value of approximately Rs.314.23 lakh crore. UPI accounted for around 84% of Indias digital payments and represented approximately 49% of global real-time payment transaction volume in 2025, highlighting Indias leadership in real-time digital payments.

The UPI ecosystem also continued to broaden its reach, with 741 banks live on the platform by July 2026. Monthly UPI transaction volumes reached a record 2,366 crore transactions in July 2026, reflecting continued adoption of digital payments by consumers, merchants and businesses.

With rising financialisation of household savings, increasing retail investor participation, continued growth in mutual fund assets, expanding wealth-management opportunities and widespread adoption of digital payments, Indias financial services sector remains well positioned for sustained long-term growth. The combination of Indias digital public infrastructure, growing household financial savings, deeper capital-market participation and increasing demand for investment and wealth-management products is expected to support the continued development of Indias financial-services ecosystem.

Source : IBEF

INDIAN FINANCIAL INDUSTRY

India has a diversified and rapidly evolving financial services sector comprising commercial banks, small finance banks, payments banks, cooperative banks, non-banking financial companies (NBFCs), insurance companies, mutual funds, pension funds, capital-market intermediaries and other financial institutions. The sector has expanded significantly, supported by regulatory reforms, increasing financial inclusion, digitalisation and growing participation from private-sector institutions. The banking sector continues to remain a key component of Indias financial system, while the importance of NBFCs, insurance companies, mutual funds and capital markets has increased steadily. Indias financial services sector is undergoing a significant transformation, supported by rising domestic savings, deeper capital-market participation, increasing investor base, fintech adoption and the expansion of digital financial services.

The Government of India and the Reserve Bank of India (RBI) continued to implement measures aimed at strengthening financial stability, promoting financial inclusion and improving access to institutional credit. For Micro, Small and Medium Enterprises (MSMEs), the Credit Guarantee Scheme for Micro and Small Enterprises (CGTMSE) saw its credit guarantee ceiling enhanced from Rs.5 crore to Rs.10 crore for guarantees approved on or after April 1, 2025. The revised framework also provides guarantee coverage of up to 90% for eligible categories, thereby supporting increased access to collateral-free credit for MSMEs.

The Government also continued to expand the role of the Pradhan Mantri MUDRA Yojana (PMMY) in supporting micro and small enterprises and promoting financial inclusion. As of March 27, 2026, PMMY had sanctioned over 57.79 crore loans aggregating Rs.40.07 lakh crore, including Rs.5.65 lakh crore sanctioned during FY2025-26 up to March 27, 2026. The continued scale of the scheme reflects the growing access to formal institutional credit among micro and small enterprises and entrepreneurs.

The Government has also strengthened credit-support mechanisms for MSMEs through the Mutual Credit Guarantee Scheme for MSMEs (MCGS-MSME). The scheme provides guarantee cover of up to 60% for eligible loans of up to Rs.100 crore for the purchase of plant and machinery. During FY2025-26, the Government further modified the scheme to expand eligibility, including extending coverage to service-sector MSMEs, reducing compliance requirements and improving access to finance.

Digital infrastructure is increasingly becoming an important enabler of financial intermediation. The Reserve Bank of Indias Unified Lending Interface (ULI) is intended to facilitate faster and more seamless credit delivery by enabling lenders to access standardised digital information from multiple sources. ULI has the potential to improve access to formal credit, particularly for underserved borrowers and MSMEs. In parallel, public-sector banks have introduced digital- footprint-based Credit Assessment Models to enable automated and objective credit assessment for MSME borrowers, thereby improving the efficiency and speed of loan appraisal.

The insurance industry remains a key pillar of Indias financial services sector and continued to expand, supported by increasing awareness, rising incomes, greater private-sector participation, digital distribution and regulatory reforms. According to IBEF, total premium income of the Indian insurance industry stood at approximately Rs.7.05 lakh crore in FY2024-25, representing a year-on-year increase of 5.6%. In the non-life insurance segment, gross direct premiums written increased from Rs.2,89,673 crore in FY2023-24 to Rs.3,07,611 crore in FY2024- 25 and further to Rs.3,35,918 crore in FY2025-26, reflecting sustained growth in general and health insurance demand.

The life-insurance segment also maintained strong momentum during FY2025-26. New business premiums (first-year premiums) increased by 15.70%, from Rs.3,97,336.75 crore in FY2024-25 to Rs.4,59,713.41 crore in FY2025-26, reflecting continued growth in policy issuance and expansion across individual and group insurance segments.

The regulatory environment also witnessed significant reforms during FY2025-26. The Sabka Bima, Sabki Raksha (Amendment of Insurance Laws) Act, 2025 introduced important changes to the insurance sector, including increasing the permitted foreign direct investment (FDI) limit in Indian insurance companies from 74% to 100%. The Act also reduced the net-owned-fund requirement for foreign reinsurers from Rs.5,000 crore to Rs.1,000 crore and introduced measures aimed at simplifying regulatory requirements and improving ease of doing business. These reforms are intended to attract additional capital, facilitate greater participation, strengthen reinsurance capacity and deepen insurance penetration in India.

With continued expansion across banking, NBFCs, insurance, mutual funds, pensions, digital payments and capital markets, Indias financial services industry remains well positioned for sustained long-term growth. Increasing financial inclusion, rising household financial savings, digital public infrastructure, expanding access to formal credit, deeper capital-market participation and continued regulatory reforms are expected to support the further development of the sector and contribute to Indias broader economic growth.

MUTUAL FUND FOLIOS

The Indian mutual fund industry enters FY 2026-27 on a strong growth trajectory, supported by increasing financialisation of household savings, rising retail participation, systematic investment plans (SIPs), digital adoption and growing investor awareness. During FY2025-26, the industrys Assets Under Management (AUM) increased to Rs.73.73 lakh crore as of March 31, 2026, registering a 12.2% year-on-year growth. The continued expansion of the industry reflects the growing acceptance of mutual funds as an important vehicle for long-term investment and wealth creation. (amfiindia.com)

Investor participation continued to broaden during FY2025-26. The total number of mutual fund folios increased to 27.39 crore as of March 31, 2026, supported by continued retail participation and wider access to mutual fund products. The number of folios subsequently increased to 28.09 crore as of July 31, 2026, of which approximately 21.40 crore were in equity, hybrid and solution-oriented schemes, where the maximum investment is from the retail segment. (amfiindia.com)

The increase in folios demonstrates the continued deepening of mutual fund penetration across investor segments. The expansion of digital investment platforms, wider distribution networks and increasing financial awareness are expected to facilitate further participation, including from investors in smaller towns and cities.

Source: AMFI

Key Industry Indicators

Metric	Value	Period
Industry AUM	Rs. 73.73 lakh crore	March 2026
FY2025-26 AUM growth	12.2%	FY2025-26
Industry AUM	Rs. 85.76 lakh crore	July 2026
Industry AAUM	Rs. 86.34 lakh crore	July 2026
Total investor folios	Rs. 27.39 crore	March 2026
Total investor folios	Rs. 28.09 crore	July 2026
Equity, Hybrid & Solution- oriented folios	Rs. 21.40 crore	July 2026
Monthly SIP contribution	Rs. 31,961 crore	July 2026

Source: AMFI

SIP Flows

Systematic Investment Plans continued to be one of the key structural drivers of the mutual fund industry during FY2025-26. Monthly SIP contributions crossed the Rs.32,000 crore mark for the first time, reaching a record Rs.32,087 crore in March 2026, representing a 23.8% year-on- year increase. The number of contributing SIP accounts increased to 9.72 crore in March 2026, compared with 9.44 crore in February 2026. (amfiindia.com)

SIP assets stood at approximately Rs.15.11 lakh crore in March 2026, representing around 20.5% of the industrys total AUM. The continued growth in SIP assets and contributions demonstrates the increasing preference among investors for disciplined, periodic investment over longer investment horizons. (amfiindia.com)

The momentum continued into FY2026-27, with monthly SIP contributions standing at Rs.31,961 crore in July 2026. The sustained level of SIP contributions provides a relatively stable source of domestic flows and is expected to remain an important contributor to mutual fund industry growth during FY2026-27.

Demographics

Individual investors continued to be a key contributor to the growth of the Indian mutual fund industry. As of March 2026, individual investors held approximately Rs.45.96 lakh crore in mutual fund assets. Of these assets, approximately 63.1% or Rs.28.99 lakh crore was invested in equity- oriented schemes, while hybrid schemes accounted for 17.7%. This asset mix highlights the significant role played by individual investors in supporting equity-oriented and long-term investment products. (amfiindia.com)

The geographical penetration of mutual funds is also broadening. In January 2026, cities beyond the Top 30 (B30) accounted for approximately 18.9% of mutual fund assets, while Top 30 (T30) cities accounted for approximately 81.1%. Equity-oriented schemes represented a relatively higher share of assets in B30 locations, accounting for approximately 64.1% of B30 assets, compared with 38.2% in T30 locations. (amfiindia.com)

The continued growth of B30 participation, supported by distributor networks, digital platforms and increasing financial awareness, is expected to remain an important opportunity for the industry during FY2026-27.

INDIAN MUTUAL FUND INDUSTRY TRENDS

The Indian mutual fund industry continued to demonstrate resilience during FY2025-26 despite periods of market volatility. Equity funds recorded positive net inflows for the 61st consecutive month in March 2026, with net inflows of approximately Rs.40,450 crore. Flexi-cap funds led the equity category during the month, recording net inflows of approximately Rs.10,054 crore.

Source: AMFl

FUTURE PROSPECTS AND OUTLOOK

The outlook for the Indian mutual fund industry during FY2026-27 remains positive. The industry enters the year with a significantly expanded asset base, a growing investor population and sustained SIP participation. Continued financialisation of household savings, increasing retail participation, rising financial awareness and the expansion of digital investment platforms are expected to remain key structural drivers of growth.

The industrys AUM stood at Rs. 73.73 lakh crore at the end of FY2025-26 and subsequently increased to Rs. 85.76 lakh crore by July 2026, while total folios increased to 28.09 crore. These developments indicate continued momentum in investor participation and asset mobilisation at the beginning of FY2026-27. (amfiindia.com)

SIP-based investing is expected to remain an important source of stable retail flows, with monthly contributions reaching Rs.32,087 crore in March 2026 and remaining strong at Rs.31,961 crore in July 2026. The continued adoption of SIPs is likely to support disciplined long-term investment behaviour and deepen retail participation in capital markets. (amfiindia.com)

The expansion of mutual fund penetration in B30 locations, growing adoption of digital investment platforms and increasing interest in equity, hybrid and passive products are expected to create additional opportunities for industry growth. At the same time, market volatility, global economic conditions, interest-rate movements and changes in investor sentiment may influence short-term asset valuations and investment flows.

Overall, the Indian mutual fund industry is well positioned for continued long-term expansion during FY2026-27. The combination of a growing investor base, increasing financialisation of savings, sustained SIP flows, expanding digital distribution and broader product availability is expected to support further growth in mutual fund assets and folios and contribute to the continued deepening of Indias capital markets.

RISK MANAGEMENT SYSTEM

The Company has developed and implemented a risk management policy which is periodically reviewed by the management. The enterprise risk management policy of the Company, which has been duly approved by the Board, is reviewed by the Audit Committee and the Board on a periodic basis. The risk management process encompasses practices relating to identification, assessment, monitoring and mitigation of various risks to key business objectives. Besides exploiting the business opportunities, the risk management process seeks to minimize adverse impacts of risk to key business objectives.

SEGMENT WISE OR PRODUCT WISE PERFORMANCE

The Company is engaged primarily in the business of mutual funds and accordingly there are no separate reportable segments

OPPURTINIITES AND THREATS

OPPORTUNITIES:

1. Rising Interest from Millennials and Youth

2. Risk Diversification

3. Affordability & Convenience (Invest Small Amounts)

4. Tax Benefits

THREAT

1. Risk of losing money

2. Liquidity Risk for listed securities

3. Event Risk

4. Credit Risk

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

1. The Company has in place, an adequate system of internal controls commensurate with its size, requirements and the nature of operations. These systems are designed keeping in view the nature of activities carried out at each location and various business operations.

2. The Internal Auditor of the Company carries out internal audits at all, offices, across all locations of the country. Their objective is to assess the existence, adequacy and operation of financial and operating controls set up by the Company and to ensure compliance with the Companies Act, 2013, SEBI (Listing Obligations & Disclosures Requirements) Regulations, 2015 (SEBI Listing Regulations, 2015) (to the extent as applicable) and corporate policies

3. A summary of all significant findings by the audit department/auditor along with the follow-up actions undertaken thereafter is placed before the Audit Committee for review. The Audit Committee reviews the comprehensiveness and effectiveness of the report and provides valuable suggestions and keeps the Board of Directors informed about its major observations, from time to time.

HUMAN RESOURCES

The Company continues to give priority to its human assets. The Company is also continuously working to create and nurture an atmosphere which is highly motivated and result oriented.

Financial Ratios		For the year ended
Ratios/Measure	Methodology	March 31,2026	March 31,2025	Change(%)	Reasons for Change
a. Current Ratio	Current assets over current liabilities	28.15	29.54	5%	Difference is due to increase in Stock
b. Debt-Equity Ratio	Debt over total shareholders equity	0.95	1.29	26%
c. Debt Service Coverage Ratio	Earnings available for debt service	4.77	2.93	-107%	-
d. Return on Equity Ratio	PAT over total average equity	0.05	0.03	-43%	-
e. Inventory Turnover Ratio		-	-	-	Not Applicable
f. Trade Receivables Turnover Ratio	Net Sales over average Account receivables	17.33	19.59	7%
g. Trade Payables Turnover Ratio					-
h. Net Capital Turnover Ratio	Net Sales over Shareholders Equity	2165.26	1937.67	-12%
i. Net Profit Ratio	Net profit over sales	0.02	0.02	-44%
j. Return on Capital Employed	EBIT over capital employed	0.03	0.02	-40%	-
k. Return on Investment		-	-

Sr. No. Activities	Date
1 Book Closure	23 September, 2025 to 30 September, 2026 (both days inclusive)
2. Record Date	23 September, 2026
3. E-voting Cut Off (Eligibility for E- voting)	Wednesday, 23 September, 2026
4. AGM	Wednesday, 30September, 2026 (11:00 A.M.)
5. Bonus	NA
6. Dividend Dividend per shares Dividend Rate	NA
7. E-voting Start Date & Time	Sunday, 27, September, 2026 at 9.00 A.M.
8. E-voting End Date & Time	Tuesday, 29, September, 2026 at 5.00 P.M.
9. Voting Result Date	Within 2 working days of conclusion of AGM