Fintech unicorn BharatPe has sharply reduced its losses to Rs 148.8 crore in the first nine months of the current financial year, according to a report by India Ratings and Research. The company had reported losses of Rs 491.9 crore in FY24 and Rs 926.9 crore in the year before.
Excluding costs related to employee stock options, BharatPe managed to break even at the Ebitda level during April-December.
The company primarily earns from payment processing fees from merchants using their QR code for UPI payments, and from service fees for facilitating loans.
BharatPe conducts its lending business through Trillionloans, where it holds a 62.3% stake as of January end. The report said that the firm plans to increase its stake in Trillionloans to 100% in the next three years, subject to regulatory approval.
Trillionloans has been able to grow its loan book significantly in the past three years since BharatPe acquired a controlling in it. BharatPe has infused around Rs 280 crore into Trillionloans between March 2023 and December last year. In January, it infused another Rs 48.4 crore.
Trillionloans’s loan book almost doubled to Rs 1,154.5 crore in the first nine months of this financial year, from Rs 869.5 crore in FY24 and Rs 659.3 crore in FY23. The number of active merchant counts also increased to about 200,000 in February from around 66,000 in March 2023.
After settling a long-standing legal dispute with its former co-founder Ashneer Grover in September last year, BharatPe is focusing on going public in the next two years, and is also in the process of selling a part of its 49% stake in Unity Small Finance Bank.
The rating agency expects BharatPe to continue to infuse capital into Trillionloans, which will assist its portfolio expansion and provide a cushion against any asset quality stress.
“The unsecured lending space is facing asset quality issues across the industry. BharatPe is having a vintage of seven years of offering multiple services to a large merchant base and has unique capability to assess actual cashflows of these merchants on a real time basis,” it said.