InCred a consumer and small and medium enterprises (SMEs) focussed digital lending app has performed brilliantly in the latest reported financial year ending March 2018.
As per the company’s RoC filings with MCA, consolidated revenue earned in FY18 stood at Rs 132.44 crore, a 55X jump from Rs 2.41 crore in FY17. Simultaneously, the losses worth Rs 5.33 crore of the group companies in FY17 turned into profits amounting to Rs 9.38 crore in the last fiscal.
Turning losses into profits, and that too by 3.7X margin, is a good sign for InCred.
Interest income played a major role in this turnaround by increasing 224.6X from Rs 41.39 lakhs to Rs 92.95 crore in a span of one financial year. The other substantial contributor to the revenue increase was fee income that earned the company 37.3X more money (Rs 21.52 crore) as compared to Rs 57.67 lakhs in FY17.
The Operating income of the company also included Service income of Rs 66 lakhs and Rs 4 crore via marketing, aspects added to company’s operational structure, especially in 2018.
Turning profitable also required the company to increase expenses by 15.4X to Rs 116.77 crore in FY18 from Rs 7.58 crore in the previous fiscal. The largest area of expense – Employee benefit – also increased 12.8X to Rs 43.88 crore.
On a standalone basis InCred had already turned profitable in FY17 where it made a gain of Rs 16.58 lakhs, but this profit has also grown 71.5X to Rs 11.86 crore for the company.
During FY18, the company raised Rs 200 crore via venture debt and approximately Rs 8 crore from equity investments.
A couple of days ago, the company had popped up in headlines for raising Rs 300 crore from its founder Bhupinder Singh, Paragon Partner’s private equity fund, and other HNIs in order to diversify its lending focus segments in the Indian industry.
The RoC filings support the company’s claim of raising Rs 300 crore, but these investments have been raised via venture debt rounds, and led by Franklinn India. Kotak Mahindra Trustee Fund and Investo Trustee also made significant contributions of Rs 150 crore, Rs 100 crore, and Rs 50 crore respectively.
As far as Singh’s investment has concerned so far in FY19, he has divested approximately RS 11 crore in the company’s funds, and Paragon Partners along with HDFC Private Equity fund has made an investment worth over Rs 3.7 crore.
Around June the company had also issued Equity shares worth Rs 1.4 crores to Rahul Dravid for his endorsement services.
All the positive figures by the company, both financially and wrt fundings, indicate a bright future for the company ahead, and for the digital lending industry as well. It would be interesting to watch the company grow and analyse its performance again at the end of current FY19.