Digital lending startups put off IPO plans amid muted growth
While Moneyview and Kissht are in the process of filing their draft documents with the market regulator, Kreditbee is seeking a board approval to convert itself into a public limited company, taking one step closer to its IPO.
"Many of these fintechs are just looking to keep their regulatory clearances in place, but will eventually want to time their public listing when their financials are in a better place and overall market sentiments have changed," said a founder of a digital lending startup.
Lending platforms such as Axio, Fibe, Moneyview and Kreditbee showed divergent performance in FY25. 'Lending companies saw higher operating expenses as credit quality worsened, and regulatory tightening forced businesses to slow disbursals and grow more cautiously,' chief executive officer of a digital lending startup said on condition of anonymity.Bengaluru-based Kreditbee reported a comparatively muted net profit growth of just over 10% in FY25 at Rs 221 crore, up from Rs 200 crore in FY24, while its operating revenue jumped 56% to Rs 2,185 crore from Rs 1,399 crore.A sharp 67% year-on-year increase in expenses to Rs 1,890 crore in FY25 dented the bottom-line growth of Kreditbee, which primarily offers unsecured consumer loans.Rival Moneyview reported an improvement in the returns on its assets under management (AUM) while it slowed down disbursement growth in the last fiscal.'Since the second half of FY25, the company has consciously reduced disbursements and plans modest AUM growth in FY26,' India Ratings and Research said in a ratings document issued on April 10.The Bengaluru-based startup's return on average assets deployed went up to 6.8% in the first nine months of the last fiscal, compared to 6.65% in FY2024.FY2025 details of financial performance of the company are not available.
Fibe, which raised $90 million through a mix of primary and secondary funding in June 2024, performed better than its rivals. The Pune-based startup, which offers personal loans and instant cash loans, nearly doubled its net profit to Rs 100 crore in FY2025, up from Rs 55 crore in FY24, taking more out of its operating income of Rs 1,033 crore in FY25 against Rs 708 crore in the preceding year.Consumer lending platform Axio (formerly Capital Float), reported a pre-provisioning profit of Rs 24 crore in the first half of the fiscal year 2025, down from Rs 81 crore in FY24.
Axio is in the process of getting acquired by ecommerce major Amazon. The deal is awaiting clearance from the Reserve Bank of India. According to a rating document issued by Crisil Ratings in January, credit costs of Axio surged to 7% in the first half of FY25 from 4% in FY24.Company promoters are hopeful that despite the challenges, the sector should do better in coming months as there is stability.
IPO still some time away An Indian partner at a large US-based venture fund with multiple fintech investments said that while several digital lenders are preparing for IPOs, most are likely to wait until the December quarter before filing their final prospectus for a public listing.'For some, the IPO is a route to provide exits for existing investors. For others, it's more about testing market appetite,' he said, adding that these companies aim to complete the fundraising process while they still have venture capital in the bank.The chief executive quoted earlier said the first set of draft red herring prospectus (DRHP) filings for IPOs by digital lending startups will likely happen by the end of July. Sebi approvals could take another three months, followed by a two- to three-month window before the companies are ready to go public.'Overall, it's a nine-month process. So, timing the market becomes key for any fintech looking to list,' the CEO said. Elevate your knowledge and leadership skills at a cost cheaper than your daily tea. Punit Goenka reloads Zee with Bullet and OTT focus. Can he beat mighty rivals?
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