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Time of India
24-05-2025
- Business
- Time of India
Microfinance firm Fusion suffers 4th consecutive quarterly loss
Fusion Finance reported a net loss of Rs 165 crore for Q4 FY25, marking its fourth consecutive quarterly loss due to severe asset quality stress. Increased provisions for bad loans, totaling Rs 255 crore, significantly impacted profitability. The company is seeking extensions from lenders after breaching financial covenants on borrowings of Rs 4,763 crore. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Kolkata: Microfinance company Fusion Finance reported its fourth quarterly loss in a row due to the ongoing severe asset quality stress that the sector is suffering lender's net loss stood at Rs 165 crore for the fourth quarter of FY25, as compared with a net profit of Rs 133 crore in the year-ago period, owing to higher provisions to cover bad loans. It set aside Rs 255 crore during the quarter as compared with Rs 119 crore operating profit for the quarter under review stood 69% lower at Rs 90 crore against Rs 291 crore in the year-ago interest margin was at 8.57% as compared with 11.59% over the same period. Its interest income at Rs 4,449 crore was 22% lower year-on-year, in line with squeezed business had reported a net loss of Rs 36 crore in the first quarter, Rs 305 crore in the second quarter and Rs 719 crore in the third quarter of FY25. Provision was the highest during the third quarter at Rs 572 Fusion's annual net loss stood at Rs 1,225 crore as compared with Rs 505 crore net profit in the preceding company breached various financial covenants in respect of borrowings amounting to Rs 4,763 crore as of March 31, 2025. Therefore, these borrowings become repayable on demand. The company has obtained extension from its lenders for these breaches for borrowings of Rs 4,080 crore. It is in discussion with the remaining lenders to obtain similar extensions, the company management said in a regulatory filing to the stock company holds cash and cash equivalents and liquid assets aggregating Rs 798 crore."The company remains committed to improving recovery efforts at the field level and is confident of achieving better outcomes. Any subsequent recoveries will be recognised as income and credited to the statement of profit and loss in the period of recovery," managing director Devesh Sachdev lender's gross non-performing assets ratio stood at 7.92% at the end of March against 2.89% a year back. Gross NPA was at 12.6% at the end of December 2024. The ratio came down sequentially due to accelerated write-off of bad loans to the tune of Rs 405 crore during the assets under management dipped 22% year-on-year to Rs 8,980 crore at the end of FY25 from Rs 11,476 crore as it slowed disbursal to prevent further worsening of asset capital adequacy ratio stood at 22.4%, well above the regulatory stipulation.
Economic Times
24-05-2025
- Business
- Economic Times
Fusion Finance suffers 4th consecutive quarterly loss at Rs 165 crore
Live Events (You can now subscribe to our (You can now subscribe to our ETMarkets WhatsApp channel Microfinance company Fusion Finance reported its fourth quarterly loss in a row due to the ongoing severe asset quality stress that the sector is suffering lender's net loss stood at Rs 165 crore for the fourth quarter of FY25, as compared with a net profit of Rs 133 in the year ago period, owing to higher provisions to cover bad loans. It set aside Rs 255 crore during the quarter as compared with 119 crore operating profit for the quarter under review stood 69% lower at Rs 90 crore against Rs 291 crore in the year-ago interest margin was at 8.57% as compared with Rs 11.59% over the same period. Its interest income at Rs 4449 crore was 22% lower year-on-year, in line with squeezed business had reported a net loss of Rs 36 crore in the first quarter, Rs 305 crore in the second quarter and 719 crore in the third quarter of FY25. Provision was the highest during the third quarter at Rs 572 Fusion's annual net loss stood at Rs 1225 as compared with Rs Rs 505 crore net profit in the preceding company breached various financial covenants in respect of borrowings amounting to Rs 4763 crore as of March 31, 2025. Therefore, these borrowings become repayable on demand. The company has obtained extension from its lenders for these breaches for borrowings of Rs 4080 crore. It is in discussion with the remaining lenders to obtain similar extensions, the company management said, in a regulatory filing to the stock company holds cash and cash equivalents and liquid assets aggregating Rs 798 crore."The company remains committed to improving recovery efforts at the field level and is confident of achieving better outcomes. Any subsequent recoveries will be recognised as income and credited to the statement of profit and loss in theperiod of recovery," managing director Devesh Sachdev lender's gross non-performing assets ratio stood at 7.92% at the end of March against 2.89% a year back. Gross NPA was at 12.6% at the end of December 2024. The ratio came down sequentially due to accelerated write-off of bad loans to the tune of Rs 405 crore during the assets under management dipped 22% year-on-year to Rs 8980 crore at the end of FY25 from Rs 11476 crore as its slowed disbursal to prevent further worsening of asset capital adequacy ratio stood at 22.4%, well above the regulatory stipulation.
Time of India
24-05-2025
- Business
- Time of India
Fusion Finance suffers 4th consecutive quarterly loss at Rs 165 crore
Microfinance company Fusion Finance reported its fourth quarterly loss in a row due to the ongoing severe asset quality stress that the sector is suffering from. The lender's net loss stood at Rs 165 crore for the fourth quarter of FY25, as compared with a net profit of Rs 133 in the year ago period, owing to higher provisions to cover bad loans. It set aside Rs 255 crore during the quarter as compared with 119 crore earlier. Pre-provision operating profit for the quarter under review stood 69% lower at Rs 90 crore against Rs 291 crore in the year-ago period. Net interest margin was at 8.57% as compared with Rs 11.59% over the same period. Its interest income at Rs 4449 crore was 22% lower year-on-year, in line with squeezed business volume. Fusion had reported a net loss of Rs 36 crore in the first quarter, Rs 305 crore in the second quarter and 719 crore in the third quarter of FY25. Provision was the highest during the third quarter at Rs 572 crore. Consequently, Fusion's annual net loss stood at Rs 1225 as compared with Rs Rs 505 crore net profit in the preceding fiscal. The company breached various financial covenants in respect of borrowings amounting to Rs 4763 crore as of March 31, 2025. Therefore, these borrowings become repayable on demand. The company has obtained extension from its lenders for these breaches for borrowings of Rs 4080 crore. It is in discussion with the remaining lenders to obtain similar extensions, the company management said, in a regulatory filing to the stock exchanges. The company holds cash and cash equivalents and liquid assets aggregating Rs 798 crore. "The company remains committed to improving recovery efforts at the field level and is confident of achieving better outcomes. Any subsequent recoveries will be recognised as income and credited to the statement of profit and loss in the period of recovery," managing director Devesh Sachdev said. The lender's gross non-performing assets ratio stood at 7.92% at the end of March against 2.89% a year back. Gross NPA was at 12.6% at the end of December 2024. The ratio came down sequentially due to accelerated write-off of bad loans to the tune of Rs 405 crore during the quarter. Fusion's assets under management dipped 22% year-on-year to Rs 8980 crore at the end of FY25 from Rs 11476 crore as its slowed disbursal to prevent further worsening of asset quality. Its capital adequacy ratio stood at 22.4%, well above the regulatory stipulation.
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Business Standard
12-05-2025
- Business
- Business Standard
Fusion Finance shares rise over 8% after Rs 800-cr rights issue success
Shares of Fusion Finance jumped over 8 per cent after the Warburg Pincus-backed firm successfully concluded its Rs 800-crore rights offering. The fully paid shares of Fusion Finance surged 8.4 per cent to end at Rs 165.5, while the partly paid shares rose 10 per cent to Rs 96. The rights issue—the largest successfully concluded so far this calendar year—was oversubscribed 1.5 times. It saw strong participation from existing shareholders, including Honey Rose Investment (a Warburg Pincus affiliate) and Creation Investments Fusion. As on 2 May, Honey Rose held about 35.2 per cent stake in the company, while Creation Investments held 16.83 per cent. Both are categorised as promoters. Among public shareholders, HDFC Mutual Fund and Nippon MF held 4.21 per cent and 3.97 per cent, respectively. The microfinance lender issued 61.1 million partially paid-up equity shares at Rs 131 each. Eligible shareholders could apply for 55 shares for every 91 held, paying 50 per cent (Rs 65.5 per share) upfront and the balance later. The proceeds will bolster Fusion Finance's balance sheet, fuelling growth opportunities. 'The additional capital will reinforce our balance sheet, enabling us to capitalise on the emerging opportunities while continuing to deliver sustainable value to all stakeholders,' said Devesh Sachdev, Managing Director, Fusion Finance. With close to 3.7 million clients, Fusion Finance provides financial services to underserved and unserved women entrepreneurs in rural areas. It has assets under management (AUM) of Rs 10,600 crore and a network of 1,506 branches spread across 22 states. Investec, in a note in April, said the 'worst seems to be over' for the Indian microfinance industry and that one can expect a gradual recovery and consolidation in this space.
Mint
12-05-2025
- Business
- Mint
Fusion Finance rights issue subscribed 150%. Share jumps 7%
Financial service provider Fusion Finance share price jumped over 7.51 per cent in Monday's trading session to ₹ 164.20 apiece after the company announced the completion of ₹ 800 crore Rights Issue, which was subscribed 1.5x or 150 per cent. Fusion Finance stock has gained nearly 16.84 per cent in over a month, however, has fallen over 11 per cent in six months. The offering, which was open on April 15, witnessed robust participation from existing institutional investors, including promoters Honey Rose Investment Ltd, an affiliate of Warburg Pincus LLC, and Creation Investments Fusion LLC, underscoring investors' conviction in Fusion's growth trajectory and business fundamentals. The rights issue comprised up to 6,10,58,392 partly paid-up equity shares at a price of ₹ 131 per rights equity share (including a premium of ₹ 121), aggregating up to ₹ 799.86 crore. 'The strong response to our Rights Issue is a testament to the enduring trust of our shareholders in Fusion's operational resilience and strength as a business. The additional capital will reinforce our balance sheet, enabling us to capitalize on the emerging opportunities while continuing to deliver sustainable value to all stakeholders," said Devesh Sachdev, Managing Director, Fusion Finance Limited. The proceeds from the rights issue will enhance the Company's capital adequacy, further strengthening its position as one of the most well-capitalized entities in the Indian microfinance sector. IIFL Capital Services Limited has been appointed as the Lead Manager to the Issue, meanwhile CRISIL Ratings Limited serves as the Monitoring Agency to the Issue. Axis Bank Limited has been appointed as the Banker to the issue. 'Over the past year, Fusion has made significant strides in advancing its long-term strategy including strengthening its executive leadership team. The recent appointment of Mr. Sanjay Garyali as the Chief Executive Officer was one of the key steps towards this direction. Mr. Garyali brings over 28 years of experience in the banking and finance industry with deep expertise in retail finance,' the company said in a release dated May 12. Speaking on the development, Sanjay Garyali, Chief Executive Officer, Fusion Finance Limited, said, 'The success of this Rights Issue reflects the strength of Fusion's franchise and the trust of our shareholders. This milestone event will enable us to further strengthen our foundation as we drive the next phase of our journey, with a focus on scale, sustainability and long-term value creation.' Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.
