Mufin Green Finance Secures Key Approval for Capital Infusion
Mufin Green Finance Limited has taken a significant step towards strengthening its financial foundation by receiving in-principle approval from both the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) for a preferential issue. This crucial go-ahead allows the company to move forward with allotting approximately 3,43,03,482 equity shares and 76,53,061 warrants to specific investors. This fundraising effort is vital for Mufin Green Finance as it continues its expansion in the burgeoning green finance sector, particularly focusing on electric vehicles (EVs) and renewable energy projects.
The Capital Raise and Its Purpose
A preferential issue is a method where a company sells shares or warrants to a select group of investors at a predetermined price, often at a premium to the current market rate. For Mufin Green Finance, this capital infusion is intended to fuel its core business of onward lending. The company, which has been actively disbursing loans for EVs, charging infrastructure, and solar projects, aims to scale up its assets under management (AUM) significantly. As of March 31, 2025, its AUM stood at approximately ₹838.44 crore, a notable increase from ₹624.14 crore in the previous fiscal year. The funds raised will support this growth trajectory and enhance the company's lending capacity.
This move aligns with Mufin Green Finance's broader strategy, which has seen it raise capital through various channels, including Non-Convertible Debentures (NCDs) worth ₹90 crore in December 2025 and ₹100 crore in February 2026, and a term loan of $12 million (about ₹109 crore) from Finnfund.
Conditions and Potential Hurdles
While the in-principle approval is a positive development, it is subject to several stringent conditions. These include strict adherence to Securities and Exchange Board of India (SEBI) regulations governing such issues and, critically, strengthening internal controls related to trades by the allottees, as advised by NSE. These conditions highlight the regulatory scrutiny accompanying capital market transactions, especially those involving preferential allotments.
Investors will be watching closely to ensure Mufin Green Finance effectively meets these requirements. Notably, the company has previously navigated complexities with preferential issues. In January 2026, it withdrew a component of a preferential issue related to equity shares for non-cash consideration, citing delays in obtaining requisite regulatory approvals for valuation. This past event underscores the importance of timely and compliant execution for future fundraising efforts.
Financial Health and Market Position
Mufin Green Finance operates in a niche but rapidly growing segment. As of FY2025, the company reported a net profit of nearly ₹20 crore. Its Capital Adequacy Ratio (CAR) stood at 25.99 percent as of March 31, 2025, indicating a reasonably well-capitalized position for its current scale of operations. However, compared to larger Non-Banking Financial Companies (NBFCs) like Bajaj Finance or Shriram Finance, Mufin is a smaller player, with a market capitalization around ₹2,000 crore. The company's focus on green finance provides a distinct strategic advantage in a market increasingly prioritizing sustainable investments.
Risks and Future Outlook
The primary risks associated with this preferential issue revolve around the successful fulfillment of the exchange and SEBI's stipulated conditions. Any delays or non-compliance could jeopardize the final approval. Furthermore, the past withdrawal of a preferential issue component highlights potential execution challenges in navigating regulatory pathways. Investors should also monitor promoter shareholding trends; while recent reports indicate a stable, albeit slightly reduced, promoter stake, a significant reduction could be a concern.
Looking ahead, Mufin Green Finance's ability to successfully complete this preferential issue and deploy the raised capital effectively into its green lending portfolio will be critical for its sustained growth and market position. The company's performance will be closely watched for its ability to manage asset quality and profitability amidst an expanding operational scale.