- Our view
- AVOID
- Market cap then
- ~INR 270.5 Cr.
- Price band
- INR 140 to 142 per share
Finbud Financial Services Ltd. distributes loans through digital and agent-led channels, earning commissions from partner banks and NBFCs when loans are disbursed. Minerva Capital Research Solutions assigns an AVOID rating to the IPO, citing its aggressive valuation, competition and working-capital pressures.
About Finbud
Incorporated in 2012 in Bengaluru, Finbud earns most of its revenue from commissions paid by partner banks and NBFCs after successful loan disbursements. It acquires customers through digital and agent-led channels, using 3,239 agents as of FY 2025 to reach customers across at least 27 States/Union Territories, with a focus on Tier 2 and Tier 3 markets. Its wholly-owned subsidiary, LTCV Credit Private Limited, is a non-deposit taking NBFC.
Finbud IPO Details
| Particulars | Details |
|---|---|
| Price Band (INR) | 140 to 142 |
| Face Value (INR) | 10 |
| Implied M.Cap (INR Cr.) | 270.50 |
| Exchange | NSE SME |
| Min. Lot Size (Retail | HNI) | 2,000 | 3,000 |
| Issue Opens on | 6-Nov’25 |
| Issue Closes on | 10-Nov’25 |
| Listing Date | 13-Nov’25 |
| No. of shares pre-issue (#) | 1,40,01,480 |
| Fresh Issue of Shares (#) | 50,48.000 |
| Offer for Sale (#) | - |
| No. of shares post-issue (#) | 1,90,49,480 |
| Funds Mobilized — Fresh Issue of Shares (INR Cr.) | 71.68 |
| Funds Mobilized — Offer for Sale (INR Cr.) | 0.0 |
Use of Issue Proceeds
| Object | Amount |
|---|---|
| Working Capital Requirement | 20.90 |
| Investment in Wholly owned Subsidiary; LTCV Credit Pvt Ltd | 15.00 |
| Funding for Business Development and Marketing | 17.75 |
| Prepayment or repayment of borrowings by the Company | 4.03 |
| General Corporate Purposes | [●] |
Strengths
- Growing digital contribution: Finbud intends to raise the Digital Channel’s share of revenue from 14.54% in FY25 Standalone to 28% by FY26. The digital segment has a reported EBITDA margin of 12%.
- Secured-loan opportunity: The company expects secured loans to generate higher revenue per customer, supported by larger ticket sizes and longer loan tenures.
- Planned subsidiary investment: Finbud plans to invest ₹15 Cr in LTCV Credit Private Limited to support the phased increase in the minimum Net Owned Fund requirement for NBFC-BLs, including the required threshold of ₹10 crore by March 31, 2027.
- Potential product expansion: The report identifies credit cards and used car loans as potential new product lines.
- Technology development: Data-driven customer profiling, credit scoring and personalised loan offers are identified as areas where technology could support the business.
Finbud Key Financials
| Particulars (INR Cr.) | FY23 | FY24 | FY25 | 31-Jul’25 |
|---|---|---|---|---|
| Revenue (excl. other inc.) | 135 | 190 | 223 | 86 |
| Growth Rate Y-o-Y % | - | 40.4% | 17.4% | |
| EBITDA (excl. other inc.) | 4.3 | 10.6 | 14.7 | 5.9 |
| EBITDA % | 3.2% | 5.6% | 6.6% | 6.8% |
| PAT | 1.8 | 5.7 | 8.5 | 3.3 |
| PAT % | 1.3% | 3% | 3.8% | 3.9% |
| Debt (Short+Long) | 7.4 | 12.4 | 18.5 | 20.5 |
| Debt/Equity | 1.21x | 1.06x | 0.51x | 0.52x |
| ROE % | 29.9% | 48.3% | 23.6% | 8.47% |
| ROCE % | 24.91% | 49.85% | 32.11% | 12.19% |
| CFO / EBITDA % | 62.5% | (19.7%) | (90.9%) | (42.4%) |
NWC includes Inventory, Receivables & Payables; & NWC days is computed as % of rev.
Revenue rose from 135 in FY23 to 223 in FY25, while year-on-year growth eased from 40.4% in FY24 to 17.4% in FY25. CFO / EBITDA was (90.9%) in FY25.
Revenue Profile
Personal loans accounted for 74.52% of FY25 revenue, business loans 20.81%, home loans 2.95% and other products 1.72%. The agent channel generated 85.46% of FY25 revenue, while the digital channel generated 14.54%. Revenue generated per agent was 5,87,403 in FY25, down from 5,98,934 in FY24.
The report notes that personal loans are often categorised as unsecured loans and may have lower ticket sizes and margins. It also cites a 39.5% CAGR for India’s digital lending market over 10 years.
IPO Valuation and Our View
At the INR 140 to 142 per-share price band, the issue is valued at a P/E ratio of 31.9x based on FY25 PAT. The report cites the competitive industry and a listed peer with better margins and lower debt, and assigns an AVOID rating primarily due to aggressive IPO valuation.
- INR 140 to 142 per share
- IPO price band
- 31.9x
- P/E based on FY25 PAT
- AVOID
- Recommendation
Peer Comparison
The report identifies My Mudra Fincorp Ltd. as Finbud’s direct peer and also compares PB Fintech Ltd., while noting that PB Fintech is not comparable given its scale. For FY25, My Mudra Fincorp had EBITDA margins of 16.8%, PAT margins of 11.2% and debt of 3.7; Finbud’s corresponding figures were 6.6%, 3.8% and 18.5. The report states that the 3 year P/E for the financial sector hovers in range of 22x-24x multiple.
Management
- Parag Agarwal: Whole Time Director and CFO, with over 20 years of experience in investment management and financial services.
- Parth Pande: Whole Time Director, with over 19 years of expertise in digital business; he worked at Citibank from 2005 to 2012.
- Vivek Bhatia: Whole Time Director, with over 25 years of experience and previous work as a distribution partner for Citibank’s retail asset product.
Key Risks
- Working capital: Receivables rose from 41 to 57 days, and the cash cycle increased from 19 days to 50 days. The report notes that digital marketplaces generally have higher receivable cycles and that a greater digital mix could further strain working capital.
- Competition: The industry is described as highly competitive and fragmented, with many players and low barriers to entry.
- Subsidiary funding: Capital infusions into LTCV remain a key monitorable.
- Lender concentration: The report flags high lender concentration and limited negotiating power with lending institutions.
Our View
Finbud is growing its loan distribution business and plans to build its digital channel and invest in its subsidiary. However, the report highlights weak cash conversion, working-capital pressure and a competitive market alongside an aggressive IPO valuation. Minerva Capital Research Solutions assigns an AVOID rating.
Standard disclosures
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- Research Analysts for this report : Mr. Shubham Upadhyay (+91-9953459775), Mr. Nishant Gupta (+91-8171433387)
Rating rationale
Minerva Capital Research Solutions endeavors to provide objective opinions and recommendations. Ratings are assigned to stocks according to their fair value vs current market price and then categorizes them as Buy, Hold, Reduce, Sell. The performance horizon is one year unless specified and fair value is defined as analyst’s valuation for a stock.
- Buy:> 15%
- Hold: -5% to 15%
- Reduce: -15% to -5%
- Sell: <-15%