True Balance’s profit zooms over 2X to Rs 138 Cr in FY24

True Balance, founded by South Korean entrepreneur Cheolwon Lee, started with a mobile and DTH recharge platform. However, the company’s business dynamics changed drastically after FY21 when it started lending (personal or short-term loans). This shift enabled the company to register over 74X growth in its scale in the past five fiscals as its revenue ballooned to Rs 667 crore in FY24 from Rs 8.95 crore in FY19.

For context, the SoftBank-backed firm started lending in FY20 through third parties, and a year later it also got its own NBFC —True Balance.

On a fiscal to fiscal basis, True Balance’s operating revenue grew 54.8% to Rs 667 crore in FY24 from Rs 431 crore in FY23, its consolidated financial statements sourced from Registrar of Companies show.

true balance

True Balance’s personal loan platform usually targets borrowers who are neglected by banks and have no credit scores. The service and processing charges on the loans offered contributed 56% of the firm’s total operating revenue. This income spiked 63.2% to Rs 377 crore in FY24 from Rs 231 crore in FY23. 

Meanwhile, the income from interest stood at Rs 280 crore in FY24.

The penalties on dues and non-operating incomes (interest from fixed and current investments) took True Balance’s overall revenue to Rs 673 crore in the fiscal year ending March 2024 from Rs 433 crore in FY23.

See TheKredible for the detailed revenue breakup.

For the cash loan firm, the bad debts (NPAs) and their provisions formed 36.2% of its overall cost which increased by 26.3% to Rs 202 crore in FY24 from Rs 160 crore in FY23. The fintech firm had written off the bad debts worth over Rs 114 crore while the rest were the provisions related to the bad debts in FY24.

The firm’s spending on employee benefits, finance, advertising, information technology, technical, legal, and other overheads took its overall cost up by 51.4% to Rs 557 crore in FY24.

Expense Breakdown

Total ₹ 368 Cr
To access complete data, visit
https://thekredible.com/company/true-balance/financials
View Full Data
Total ₹ 557 Cr
To access complete data, visit
https://thekredible.com/company/true-balance/financials
View Full Data
  • Employee benefit expense
  • Finance cost
  • Advertising promotional
  • Bad debts and provision
  • Information technology
  • Cost technical
  • Others

Head to TheKredible for the detailed expense breakdown.

Over 50% YoY growth helped True Balance to post a 2.3X jump in its net profits to Rs 138 crore in FY24 from Rs 59 crore in FY23. Its ROCE and EBITDA margins improved to 42.24% and 27.64%, respectively. On a unit level, the ten year-old firm spent Rs 0.84 to earn a rupee in FY24.

FY23-FY24

FY23 FY24
EBITDA Margin 22.40% 27.64%
Expense/₹ of Op Revenue ₹0.85 ₹0.84
ROCE 32.11% 42.24%

According to TheKredible, True Balance has raised $140 million across equity and debt rounds including its $28 million led by SoftBank and Daesung Private Equity. The company raised its last round almost three years back.

Looking at the numbers, one can’t help but wonder at not just the numbers, but the impressive balancing act True Balance must manage to stay below the radar of regulators and watchdogs including the RBI. With its short tenure, high interest and high processing charges True Balance tries to balance out its high margins  with the promise of 24×7 service and higher risk appetite. But as the delinquency numbers indicate, it must be a high intensity gig, balancing out risks versus margins. Even as margins are winning for now, we still believe the risk of sudden regulatory heavy handedness is intrinsic to its otherwise impressive business. It is also at a stage where the other next stage of growth will be fueled by more debt than equity. Considering the large appetite it can be expected to have to maintain its growth momentum, it will be fascinating to see if it has a trick or two for that too up its sleeve.

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