Bengaluru-based Kinara Capital will increase its focus on embedded finance. The company intends to disburse Rs 400-500 crore in the embedded finance segment during the current fiscal, compared with Rs 100 crore in 2022-23.
“One of the things that we are seeing is the emergence of embedded finance. We see this as something that could be a good additional growth driver for our core business,” Hardika Shah, founder and chief executive officer, said, adding that the segment will contribute 12-15% to the overall business.
The company posted its ninth straight year of profitability in 2023-24. The net profit rose 51% year-on-year to Rs 62 crore in FY24 due to a growth in its loan book. Assets under management grew 26% to Rs 3,142 crore as on March 31. The revenue rose 47% YoY to Rs 723 crore.
The gross non-performing asset ratio stood at 5.6% as on March 31. The company clocked a 2.2% return on assets in 2023-24.
The company provides unsecured business loans to micro, small and medium-sized enterprises. Its products include working capital loans and loans for machinery purchase. It also provides unsecured business loans to women entrepreneurs. A majority of the company’s customer base comprises micro enterprises.
Kinara Capital disbursed around Rs 1,900 crore in 2023-24. Since its inception in 2011, the company has disbursed nearly Rs 6,768 crore. The average ticket size of the loan is around Rs 750,000 and the average tenure is 36-38 months.
“We expect our assets under management to nearly double in the next couple of years. I think there is enough demand in the space that we are operate in,” Shah said. “In FY25, we are looking to disburse around Rs 2,500-2,800 crore. In terms of top line, we want to cross $100 million in revenues this year.”
The company plans to borrow around Rs 1,500 crore in the current financial year.
