Details of the Corporate Bond:
- Name of the Issuer: NeoGrowth Credit Pvt. Ltd.
- Product: Senior Secured Bonds (regulated by SEBI)
- Yield: 12.00% p.a. XIRR
- Tenure: 22 months
- Min Investment: Rs. 1,00,000
- Interest repayment: Quarterly
- Principal repayment: Quarterly
- Rating: ICRA 'BBB+'
Key Highlights:
- As of Dec 2023, the company had an AUM of INR 2,329 crore and a Net Worth of INR 636 crore; company has witnessed strong growth in FY24 AUM grew by 49% (annualised) to INR 2,329 crore
- Backed by equity investors including Omidyar Network, Lightrock, Khosla Impact, Quona, Leapfrog and FMO Entrepreneurial Bank
- The company raised equity of INR 300 crore from Dutch entrepreneurial development bank FMO and existing investors in FY23
- Healthy capital adequacy ratio of 30.7% and net NPA of 1.4 % as of Dec23
- Healthy capital adequacy ratio of 32.7% and net NPA of 2.2% as of Mar'23
Overview:
NeoGrowth offers innovative digital lending solutions to Micro, Small and Medium Enterprises (MSMEs), the backbone of India’s socio-economic growth. They are a Systemically Important, Non-Deposit taking RBI Registered Non-Banking Financial Company (NBFC-ND-SI) and a founding member of the Digital Lenders Association of India.
Through digitally enabled loan offerings, they have served 1,50,000+ MSMEs and disbursed over $1 billion in loans to support their growth ambitions and create a positive impact on their lives. They cover MSMEs across 75+ industry segments, right from modest neighbourhood Kirana stores to friendly eateries and even to chic salon operators in over 25+ locations in India.
Management:
Arun Nayyar, MD & CEO is a Chartered Accountant having a well-diversified experience of around 20 years in the financial services domain. He possesses a successful track record of building businesses from scratch, scaling up established businesses and managing stressed portfolios. He has led businesses across Micro Enterprise Lending, SME Lending and Consumer Finance and also has deep understanding of key business drivers, risk and product Management, Route to Market and digital lending. His prior experience includes stints at organizations like Edelweiss, Citibank & CRISIL.
Key Financials:
All figures in INR crore
|
Balance Sheet |
FY 22 |
FY 23 |
9m FY24 |
|
Cash & cash equivalents |
90 |
175.23 |
82.84 |
|
Bank balances |
48.42 |
61.49 |
62.83 |
|
Loans Portfolio |
1,379.72 |
1,645.80 |
2,233.00 |
|
Other Receivables |
2.75 |
12.61 |
3.74 |
|
Other financial assets |
29.34 |
44.29 |
62.73 |
|
Other non-financial assets |
102.31 |
92.41 |
91.86 |
|
Total Assets |
1,652.54 |
2,031.83 |
2,537.00 |
|
Debt Securities |
792.98 |
533.01 |
499.64 |
|
Borrowings (other than debt securities) |
500.8 |
867.14 |
1321 |
|
Other Financial Liabilities |
34.96 |
34.09 |
45.81 |
|
Non-Financial Liabilities |
21.05 |
40.26 |
34.3 |
|
Total Equity |
302.75 |
557.33 |
636.25 |
|
Total Liabilities & Equity |
1,652.54 |
2,031.83 |
2,537.00 |
|
P&L Statement |
FY 22 |
FY 23 |
9m FY24 |
|
Interest Income |
357.54 |
363.13 |
410.58 |
|
Total Income |
362.76 |
382.94 |
429.61 |
|
Finance cost |
153.42 |
159.01 |
152.79 |
|
Impairment on Financial instruments |
147.3 |
69.68 |
102.84 |
|
Profit Before Tax |
-51.77 |
23.63 |
67.02 |
|
Tax Expense |
12.32 |
6.36 |
16.85 |
|
PAT |
-39.45 |
17.27 |
50.17 |
The various products of the company are as follows:
Loans:
- Retail Finance: Retail Finance products help consumer facing businesses with end-to-end digital journeys, processes & loan fulfilment right from onboarding to disbursal with minimal or no touchpoints with the customers.
- Supply Chain Finance: Supply Chain flow-based lending is suited to serve the credit needs of customers’ vendor, manufacturers, suppliers or service providers serving large corporates.
Lenders:
The prominent lenders in NeoGrowth include:
Banks:
- ICICI Bank
- HDFC Bank
- RBL Bank
- Federal Bank
- DCB Bank
- Indian bank
FI (NBFC):
- Northern Arc Capital
- Hinduja Leyland Finance
- Kisetsu Saison Finance (Credit Saison)
- InCred Financial Services
- Sundaram Finance
- Manappuram Finance
Impact institutions:
- Proparco
- Blue Orchard MicroFinance
- Microvest
- Triple Jump
- Triodos
Disclaimer: The content of this blog should not be considered as financial or investment advice. Readers/Viewers may consult their financial advisor before any investment.