Transwar.Fin. Management Discussions


Transwarranty Finance Limited is a non-deposit accepting Non-Banking Finance Company ("NBFC"), holding a license from the Reserve Bank of India ("RBI") engaged in a wide spectrum of financial services, both advisory and fund based lending. The Company is headquartered in Mumbai and has a capital market subsidiary engaged in equity / commodities / currency broking and Merchant Banking activities.

Global Economic Overview:

The Fiscal Year 2023 started on a mixed note in an uncertain macroeconomic environment for the Global Economy. The outbreak of omicron corona virus and geopolitical conflict in Europe, affected major disruptions in global supply chain, resulting in a massive surge in energy and commodities prices, with a persistent high inflation not seen in the past. Majority of the Central Banks responded in a synchronized manner with consistent increase in the policy interest rates. However, the global economy demonstrated marginal growth driven by resilience of labour markets, robust household consumption and easing out of supply chain issues.

Indian Economic Overview:

Indian Economy faced challenges in terms of elevated commodity prices leading to depreciation of the Indian rupee, higher retail inflation (both core and food inflation) leading to the RBI raising interest rates and rationalising systemic liquidity, and a rising current account deficit. However, Indian economy has demonstrated remarkable resilience. Strong investment activity, capital expenditure driven by the government and large consumption base has aided the growth in Indian economy. Indias financial sector remains robust with massive digitization, high credit take off and improvement in asset quality.

Industry Overview:

The Financial Services sector in India is a diversified sector consisting of commercial banks, insurance companies, non-banking financial companies, housing finance companies, co-operatives, pension funds, mutual funds and various other smaller financial entities. Banking sector is crucial for the growth of the economy. According to the RBI, bank credit increased by 15% year-on-year (YoY) in FY 2022-23 as compared to FY 2021-22.

NBFCs have become important constituents of Indias financial sector and have been recording higher credit growth than scheduled commercial banks (SCBs) over the past few years. Digital payment transactions have increased significantly as a result of the coordinated efforts of the government. During the past five years, various easy and convenient modes of digital payments, have experienced significant growth and transformed the digital payment ecosystem making it the most preferred mode of payment. Given the increasing importance of NBFCs, the RBI, in the last few years, has increased its regulatory oversight over the sector. Despite this, NBFCs with superior asset quality, higher capital adequacy, better margins, frugal cost management, prudent risk management will continue to deliver sustainable growth in the foreseeable future.

Review of operations of the Company:

The Company achieved revenue of Rs.386.82 lakhs compared to Rs.722.15 lakhs in previous year. This is mainly due to certain share sale transactions not executed in FY 2022-23. On a consolidated basis, revenue was Rs.1203.09 lakhs during the year as compared to Rs.1656.50 lakhs in the previous year. The Company has been in the personal and consumer lending business on digital platform. It has developed its own digital lending OROBORO app as well. The Company has collaborated with many channel partners and have accelerated lending activities. The number of disbursements during the year have increased substantially to Rs.2150.35 lakhs (15,960 no. of loans). The Company has taken necessary steps to further upgrade the technology platform and has put in place systems to cater to higher scale of operations. The business activity is very encouraging and there is huge potential to scale up the business.

Strengths, Weakness, Opportunities and Threats (SWOT) analysis:


Professional and ethical management

Availability of adequate funding

Various Channel partners

Stringent cost control

Prudent risk management systems

Strong collection field force

Strong Technological base


Limitations in getting adequate scale of business


Scalability of digital lending business

Leveraging technology for ease of operations

Distribution of various financial products

Wealth management


Exposed to systemic risks and economic risks

Segment-Wise or Product Wise Performance

The Company has only one segment of activity namely, Financial services.

Business Outlook:

The Company, an RBI registered NBFC, is active in a wide gamut of Financial Services like Corporate Finance, Project Finance, Trade Finance, Merchant Banking, Investment Banking etc. Excellent domain expertise combined with a strong client and institutional relationship network nurtured over last 28 years has ensured that all the companies in the Group are well poised to unlock value for its shareholders in the fast-evolving financial landscape in India.

The Company has collaborated with multiple channel partners for lending. This will accelerate the scale up in fund based digital lending business. The Company strives to be an important player in pocket loans segment. The Company has recently completed its Rights issue and is also exploring equity capital from strategic / financial investors to finance the growth in its lending business.

The Company has developed OROBORO app for seamless digital lending. It is in the process of integrating it with other technology platforms for complete automation. Application Program Interface (API) based integrations and full set of digital payment options and the integration with partner networks is likely to improve operational efficiency.

The Company, conducts all capital market activities through its subsidiary company, Vertex Securities Limited. This includes broking of equity & equity derivatives, commodities and currency broking and distribution of third-party products.

Financial Review:

The following table presents companys standalone abridged financials for the year 2022-23 as per Ind AS along with comparatives for the previous year restated as per Ind AS


31st March, 2023 31st March, 2022

Revenue from operations

383.79 672.07
Other income 3.02 50.07
Total revenue 386.82 722.14

Purchases-Stock- in-Trade

- 391.72

Employee Benefit expenses

137.79 110.42
Finance costs 460.23 381.13

Depreciation and amortization expense

21.67 21.10
Other expenses 637.20 53.65
Total expenses 1256.91 958.04

Profit before exceptional items and taxes

(870.09) (235.89)

Exceptional items (net) - income / (expense)

- -
Profit before tax (870.09) (235.89)
Tax expenses - -
Profit for the year - -

Other Comprehensive Income

0.30 2.62

Total Comprehensive Income

(869.79) (233.27)


Key Ratios



Debtors Turnover ratio 0.58:1 0.76:1
Interest Coverage Ratio (0.86) 2.62:1
Current Ratio 1.15 1.06
Net Profit Margin (%) (226.70) (32.67)
PBT/Total Income (224.93) (32.67)
PBT/Total Assets (13.26) (0.04)
RONW (Avg. Net (0.26) (0.13)
Debt/ Equity 0.64 2.10:1
Capital Adequacy 92.10% 17.67%
Tier I Capital 46.05% 5.41%

Profitability ratios for the year are negative due to loss for the year. The same has resulted in reduction in Equity and hence significant increase in Debt Equity ratio.

Risk Management:

Risk Management is an integral part of the Companys business strategy. The Company is exposed to specific risks that are peculiar to its business including interest rate volatility, economic cycle, market risk and credit risk. The management continuously assesses the risk and monitors its business and risk management policies to mitigate risk.

Internal Control Systems and their Adequacy:

The Companys internal control system is designed to ensure operational efficiency, protection and conservation of resources, accuracy and promptness in financial reporting and compliance with laws and regulations. The internal control system is supported by an internal audit process for reviewing the adequacy and efficacy of the Companys internal controls, including its systems and processes and compliance with regulations and procedures. Internal Audit Reports are discussed with the Management and are reviewed by the Audit Committee of the Board which also reviews the adequacy and effectiveness of the internal controls in the Company.

Human Resource Development:

The Company believes that the human resources play a vital role in giving the company a competitive edge. The Companys philosophy is to provide congenial work environment, performance oriented work culture, knowledge acquisition/ dissemination, creativity and responsibility. As in the past, the Company has enjoyed cordial relations with the employees at all levels. Our employee strength is 32 as on March, 2023.

Cautionary Statements:

Statements in the Management Discussion and Analysis Report describing the Companys objectives, projections, estimates, expectation may be forward looking statements within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied.

For and on behalf of
the Board of Directors
Kumar Nair
(DIN: 00320541)
Place: Mumbai
Date: July 25, 2023