Poonawalla Fincorp Records Significant Growth with Strategic Capital Moves

Poonawalla Fincorp Limited, a prominent non-deposit-taking systemically important non-banking finance company (NBFC) in India, has demonstrated impressive financial results for the quarter ending June 30, 2025. The company’s strong performance in Assets Under Management (AUM) and Net Interest Income (NII), coupled with strategic capital infusion, has bolstered its market position and lays a solid foundation for further growth.

Strong AUM and NII Growth Reflect Operational Strength

Poonawalla Fincorp Limited

Poonawalla Fincorp reported a 53.0% year-on-year (YoY) increase in its AUM, which reached ₹41,273 crore for Q1 FY 2025. This robust growth in AUM signifies the company’s success in expanding its operations and capturing growth in high-demand market segments. Additionally, the company posted a 13.6% YoY rise in NII, totaling ₹768 crore, reflecting its ability to generate consistent income from its diverse financial offerings.

The company’s diversified loan portfolio remains a key strength, with MSME financing contributing 36% of the total AUM. Other major segments include loans against property (25%), personal and consumer finance (23%), and pre-owned car finance (13%). This diverse mix of loans ensures the company can balance risk while capturing growth opportunities across various sectors.

Capital Infusion Enhances Financial Position for Future Growth

Poonawalla Fincorp’s Board of Directors approved a capital infusion of ₹1,500 crore through a preferential allotment of equity shares to the promoters, subject to shareholder approval. This strategic move will further enhance the company’s capital base and provide the financial flexibility required to pursue its long-term growth objectives.

The company’s capital adequacy ratio (CAR) stands at 20.55%, with Tier-1 capital at 19.02%, well above the regulatory minimum of 15%. This solid capital foundation positions Poonawalla Fincorp to continue expanding while maintaining financial stability and ensuring compliance with regulatory requirements.

Maintaining Strong Asset Quality and Managing Risk

Despite substantial growth in AUM, Poonawalla Fincorp Limited has effectively managed its asset quality. As of June 30, 2025, the company reported a Gross Non-Performing Asset (NPA) ratio of 1.84% and a Net NPA ratio of 0.85%. These figures reflect the company’s disciplined lending practices and focus on managing risks effectively.

The Provision Coverage Ratio (PCR) stands at 53.93%, indicating that Poonawalla Fincorp has adequate provisions in place to cover any potential asset quality issues. Furthermore, the company successfully reduced credit costs by 53 basis points on a quarter-on-quarter basis, showcasing its commitment to managing credit risk efficiently while maintaining growth.

MSME and Consumer Finance: Core Focus Areas for Growth

MSME financing remains a central part of Poonawalla Fincorp’s strategy. The company continues to meet the rising demand for accessible credit in the MSME sector, providing tailored financial products to small and medium-sized businesses. This focus aligns with India’s broader economic objectives to foster MSME growth and improve access to capital for these businesses.

Poonawalla Fincorp is also expanding its consumer finance offerings, which include personal loans, loans for professionals, and loans against property. By focusing on both MSME and consumer finance, Poonawalla Fincorp is able to diversify its portfolio and target multiple customer segments, strengthening its position in the market.

Strong Liquidity Position and Financial Flexibility

As of June 30, 2025, Poonawalla Fincorp’s liquidity buffer stood at ₹4,465 crore, providing the company with the flexibility to meet its financial obligations and fund future growth initiatives. The capital infusion by the promoters will further improve the company’s liquidity position, allowing it to expand its product offerings and reach a broader customer base.

Committed to Sustainable and Profitable Growth

Poonawalla Fincorp Limited is focused on building a sustainable growth model that prioritizes risk management and profitability. The company’s solid capital base, sound asset quality, and proactive approach to risk management ensure that it is well-positioned to weather any market volatility while continuing to expand and grow.

The company’s diversified loan portfolio and its strategic investments in key sectors like MSME and consumer finance provide a strong foundation for long-term profitability. By focusing on responsible growth, Poonawalla Fincorp aims to continue delivering value to its shareholders and customers.

Outlook: Continued Expansion and Market Leadership

Poonawalla Fincorp’s financial performance in Q1 FY 2025, coupled with its strategic capital infusion and focus on high-growth sectors, positions the company for continued success. With a diversified loan book, strong liquidity position, and solid risk management practices, the company is poised to capture new growth opportunities and strengthen its market presence.

The company’s proactive approach to managing credit risk, combined with its commitment to maintaining a strong capital position, ensures that Poonawalla Fincorp will continue to lead the way in India’s financial services sector.

Conclusion

Poonawalla Fincorp’s strong financial results for Q1 FY 2025 demonstrate the company’s ability to deliver impressive growth while maintaining financial stability. The company’s strategic focus on MSME and consumer finance, along with its prudent approach to risk management, positions it for sustained success. With a solid capital foundation, a strong liquidity buffer, and a diversified loan portfolio, Poonawalla Fincorp is well-equipped to continue expanding its market share and delivering value to its stakeholders in the years ahead.