Finbud Financial Services
- Finbud Financial Services is coming out with an initial public offering (IPO) of 50,48,000 equity shares in a price band of Rs 140-142 per equity share.
- The issue will open on November 6, 2025 and will close on November 10, 2025.
- The shares will be listed on SME Platform of NSE.
- The face value of the share is Rs 10 and is priced 14.00 times of its face value on the lower side and 14.20 times on the higher side.
- Book running lead manager to the issue is SKI Capital Services.
- Compliance Officer for the issue is Vivekananda Udaya Bhandarkar.
Profile of the company
Finbud Financial Services (Finance Buddha) a is a prominent retail loan aggregation platform in India that helps people get personal loans, business loans, and home loans from banks and non-banking financial companies. The company acquires customers through a hybrid strategy using digital marketing and through a wide network of external agents to reach out to prospective borrowers. Once the intent of the customer has been established, the company uses its matchmaking capabilities to advise the customer on the best suited product for his/her needs by allowing them to compare prospective loan offers across multiple lending institutions and hand holds them through the entire loan documentation process till the final disbursement. The decision to either approve or reject the loan application is with the bank/NBFC and hence the company doesn’t take any credit risk. Upon loan disbursement the company earns a commission from the lenders. The service is completely free for the customer and is provided with a seamless end to end journey of loan products from discovery to disbursement.
The company is uniquely differentiated amongst its competitors by being the only major player to have a hybrid business model - conventional lending i.e., Agent channel and Digital Lending i.e., Digital Channel. As different customer looks for different kind of solutions, the company is able to provide the nuance of solutioning that the conventional lending model provides and the speed and ease of delivery that the digital lending model provides to consumers. Conventional or Agent business is the primary & initial customer acquisition strategy for the company, here in this case with its widely distributed agent network the company gets access to a curated audience of customers where a large part of the preliminary checks is already done on the consumers, thus resulting in higher conversion rates and more optimised model for the lender ecosystem.
The company operates within the digital lending market, which is experiencing rapid growth, driven by increasing internet penetration, smartphone usage, and the adoption of digital financial services. The digital lending segment is shaped by several key factors, including rapid technological advancements that enhance credit assessment and operational efficiency. Consumer behaviour is also pivotal, with increasing preference for digital channels driving growth. Regulatory environments impact the market by setting compliance standards and fostering financial inclusion. Economic conditions, such as interest rates and economic stability, influence borrowing demand and borrower creditworthiness. The market is experiencing significant growth driven by increased digital adoption, with consumers favouring online channels for their convenience, speed, and enhanced accessibility.
Proceed is being used for:
- Working capital requirement
- Investment in wholly owned subsidiary i.e. LTCV Credit Private Limited
- Funding for business development and marketing activities
- Prepayment or repayment of a portion of certain outstanding borrowings availed by the company
- General corporate purposes
Industry Overview
The banking and financial sector in India remains stable, well-capitalised, and continues to effectively support the financing needs of the economy. Credit disbursal by Scheduled Commercial Banks (SCBs) continues to grow at a double-digit pace, although the rate of growth has moderated in recent months. This slowdown is attributed to a high base effect and regulatory tightening in segments that had previously experienced rapid expansion. In response to the high growth in certain categories of consumer credit, the Reserve Bank of India (RBI), on November 16, 2023, increased the risk weights on unsecured retail loans by 25 basis points. Despite this, credit expansion remains broad-based, with housing loans being the primary contributor. Alongside personal loans, credit to the services sector is another key driver of gross bank credit growth. While industrial credit growth has started to improve, it still lags behind growth rates in other major sectors.
The Indian banking system consists of 12 public sector banks, 21 private sector banks, 44 foreign banks, 12 Small finance banks. As of April 2024, the total number of micro-ATMs in India reached 17,36,972. Moreover, there are 1,26,593 on-site ATMs and Cash Recycling Machines (CRMs) and 91,826 off-site ATMs and CRMs. Banks added 2,796 ATMs in the first four months of FY23, against 1,486 in FY22 and 2,815 in FY21. 100% of new bank account openings in rural India are being done digitally. BCG predicts that the proportion of digital payments will grow to 65% by 2026. In 2023, total assets in the public and private banking sectors were $1686.70 billion and $1016.39 billion, respectively. In 2023, assets of public sector banks accounted for 58.31% of the total banking assets (including public, private sector and foreign banks). The interest income of public banks reached $102.4 billion in 2023. In 2023, interest income in the private banking sector reached $70 billion.
Enhanced spending on infrastructure, speedy implementation of projects and continuation of reforms are expected to provide further impetus to growth in the banking sector. All these factors suggest that India’s banking sector is poised for robust growth as rapidly growing businesses will turn to banks for their credit needs. The advancement in technology has brought mobile and internet banking services to the fore. AI and automation are demonstrating unprecedented value while Blockchain has sparked innovation throughout the business landscape and is poised to continue in doing so. The banking sector is laying greater emphasis on providing improved services to their clients and upgrading their technology infrastructure to enhance customer’s overall experience as well as give banks a competitive edge. In recent years India has experienced a rise in fintech and microfinancing. India’s digital lending stood at $75 billion in FY18 and is estimated to reach $1 trillion by FY23 driven by the five-fold increase in digital disbursements. The Indian fintech market has attracted $29 billion in funding over 2,084 deals so far (January 2017-July 2022), accounting for 14% of global funding and ranking second in terms of deal volume. By 2025, India's fintech market is expected to reach Rs 6.2 trillion ($83.48 billion).
Pros and strengths
Operates within the digital lending market: The company operates within the digital lending market, which is experiencing rapid growth, driven by increasing internet penetration, smartphone usage, and the adoption of digital financial services. The digital lending segment is shaped by several key factors, including rapid technological advancements that enhance credit assessment and operational efficiency. Consumer behaviour is also pivotal, with increasing preference for digital channels driving growth. Regulatory environments impact the market by setting compliance standards and fostering financial inclusion. Economic conditions, such as interest rates and economic stability, influence borrowing demand and borrower creditworthiness.
Hybrid business model: The company’s hybrid business model allows it to cater to a wide range of customers, from those preferring traditional methods to digitally savvy consumers. The company’s extensive agent network and digital marketing capabilities provide a competitive edge in acquiring and retaining customers. Moreover, the company’s partnerships with lending institutions, including major banks and NBFCs, further strengthen its market position.
Technological integration and customer-centric approach: Advanced use of technology and data analytics enhances the customer experience and operational efficiency. Moreover, personalised loan offers, efficient processing, and post-approval support ensure a seamless and transparent borrowing experience.
Risks and concerns
Maximum revenue comes from limited customers: The company derives a significant portion of its revenue from a limited number of key Lending Partners. For instance, as of March 31, 2025, the top 1 Lending Partner alone accounted for 20.10% of its total revenue, while the top 5 Lending Partners represented 48.51%, and the top 10 Lending Partners contributed 65.99%. This concentration of revenue from a small group of Lending Partners exposes it to risks associated with the loss or reduction in business from any of these key partners.
Significantly reliant on Agent channel sales: The company's revenue is predominantly derived from Agent channel sales, which account for a significant majority of its total income. For the stub period ended on July 31, 2025 and for the periods ended March 31, 2025, March 31, 2024, and March 31, 2023, Agent channel sales contributed 86.17%, 85.46%, 86.03%, and 87.79%, respectively, of the total revenue. In contrast, Digital channel sales accounted for only 13.83%, 14.54%, 13.97%, and 12.21%, indicating a limited growth trajectory in this segment. Any termination of relationships with one or more of these key Lending Partners, or any significant reduction in the volume of business they conduct with it, could materially and adversely affect its financial performance.
Business is subject to seasonality: The company’s business is subject to seasonal fluctuations in demand for its financial products, with increased activity typically observed before major festivals like Diwali, during wedding seasons, and at the end of the financial year. These periods of heightened demand can result in variability in revenue and cash flow, which may affect its financial performance. The timing and impact of these seasonal trends are influenced by external factors such as consumer behavior, market conditions, and economic cycles. Any disruption to these seasonal patterns or changes in demand could have a material adverse effect on its business, financial performance, results of operations, and future growth prospects.
Outlook
Finbud Financial Services is a loan aggregation platform in India, assisting individuals in obtaining personal, business, and home loans from banks and non-banking financial companies. The company has strong digital lending platform with robust technological infrastructure. On the concern side, the company’s business is heavily reliant on Agent channel sales, which constitute a significant portion of its total revenue. Any disruption to Agent channel sales operations, changes in consumer preferences, or inability to effectively grow its digital channel sales could have a material adverse effect on its business, financial performance, results of operations, and future growth prospects. Moreover, concentration risk from dependency on a few key lending partners may adversely affect its business.
The company is coming out with a maiden IPO of 50,48,000 equity shares of Rs 10 each. The issue has been offered in a price band of Rs 140-142 per equity share. The aggregate size of the offer is around Rs 70.67 crore to Rs 71.68 crore based on lower and upper price band respectively. On performance front, the company’s revenue from operations surged 17.37% to Rs 22,328.28 lakh in FY25 as compared to Rs 19,023.97 lakh in FY24. Moreover, the company has reported 50.18% rise in net profit at Rs 849.68 lakh in FY25 as compared to Rs 565.78 lakh in FY24.
The company diversifies its product line by introducing financial solutions such as investment products, retirement planning services, and specialty loans for niche markets. This diversification meets the evolving requirements of existing customers and engages new customer segments, enhancing market penetration. Strategic collaborations with fintech innovators and financial institutions expand the product portfolio. Going forward, the company enters new geographical markets identified through market research as having high potential for fintech adoption, particularly in underbanked areas. Tailored marketing strategies adapt to the cultural and economic conditions of each market, aiming to maximize impact. This expansion strategy is supported by local partnerships and adherence to regulatory requirements, facilitating smooth market entry and growth.
