Unifinz Capital's NCDs Earn 'BBB-/Stable' Rating from CRISIL

Unifinz Capital India Limited's Non-Convertible Debentures (NCDs) totaling Rs 170 crore have received a 'BBB-/Stable' rating from CRISIL. The company's annualised profit after tax (PAT) stands at ₹67.9 crore. This rating improves Unifinz Capital's ability to access debt markets based on its strong earnings, though asset quality and funding costs remain key areas to watch.

CRISIL Assigns Rating to Unifinz Capital's NCDs

CRISIL Ratings has assigned a 'BBB-/Stable' rating to Unifinz Capital India Limited's planned Non-Convertible Debentures (NCDs) worth ₹170 crore. This rating acknowledges the company's sufficient capital base, with a networth of ₹145 crore and a gearing ratio of 1.2 times as of December 31, 2025. A strong earnings profile, driven by high-yield loan products and processing fees, also supports this assessment. Critical factors under observation include asset quality trends, changes in the regulatory landscape for digital lenders, and the company's funding expenses.

Rating Enhances Market Access and Credibility

The CRISIL credit rating offers an independent evaluation of Unifinz Capital's creditworthiness for its debt instruments. This is vital for the company's capacity to raise capital in the debt markets and can affect the interest rates it pays on borrowed funds.

Unifinz Capital's Evolution

Unifinz Capital India Limited, established in 1982 and previously named Shree Worstex Limited, began its retail lending activities under the 'lendingplate' brand in March 2022. The company has recently bolstered its capital base, securing equity investments totaling about ₹57 crore in FY25. Earlier, it had approved the issuance of ₹30 crore in NCDs for March 2026, offering a 13% coupon. Unifinz Capital achieved profitability for the first time in Q1 FY24-25, reporting a PAT of ₹2.51 crore.

Impact of the New Rating

• The 'BBB-/Stable' rating enhances Unifinz Capital's standing in the debt markets, likely improving its access to funding.
• This improved credit perception could lead to more competitive borrowing costs for future debt offerings.
• Investors in the current NCD issue gain a clearer perspective on the company's credit risk, validated by an external agency.
• The rating acts as a benchmark for assessing the company's financial health and its capacity to meet debt obligations.

Key Risks for Unifinz Capital

• Asset Quality: The unsecured nature of loans poses a risk to asset quality, with potential for higher rates of overdue payments (90+ days past due).
• Regulatory Environment: Unifinz Capital is exposed to potential changes in regulations for digital lenders, which could impact its operations.
• Funding Costs: The company's funding costs are relatively high. Its ability to diversify funding sources and secure long-term loans at competitive rates is crucial.
• Debt Obligations: Future lending growth depends on ensuring sufficient funds are available to meet maturing debt.

Competitive Landscape

Unifinz Capital operates in the highly competitive consumer credit sector, often competing with larger firms like Bajaj Finance and Shriram Finance. These established players benefit from significant scale, strong brand recognition, and lower borrowing costs, creating substantial entry barriers for smaller companies. While Unifinz focuses on digital unsecured personal loans, its larger competitors offer diversified portfolios including vehicle loans, gold loans, and MSME financing, providing broader market reach and financial stability.

Key Financial Metrics

• Total disbursements reached ₹1,807 crore in the nine months ending December 2025. Assets Under Management (AUM) stood at ₹376 crore as of December 31, 2025.
• The company reported an annualized Return on Managed Assets (RoMA) of 35.3% for the nine months ending December 2025, an increase from 24.3% in fiscal 2025.
• As of September 2025, delinquency in the 1-89 days past due range was 21.1%. The adjusted 90+ days past due, including 12-month write-offs, was 4.0%.

Areas to Monitor

• Sustained improvement in asset quality, maintaining adjusted 90+ days past due below 4.0% including write-offs.
• Continued profitability alongside stable capitalization metrics like gearing and networth.
• Success in diversifying funding sources and securing long-term bank loans at competitive rates.
• Management's effectiveness in navigating the digital lender regulatory landscape.
• Performance of high-yield personal loan products and their contribution to overall earnings.