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IPO Details

• IPO Opening Date): July 29, 2025
• IPO Closing Date): July 31, 2025
• IPO Size): ₹254.26 crores
  • Fresh Issue): ₹165.17 crores
  • Offer for Sale (OFS)): ₹89.09 crores
• IPO Price Band): ₹150 to ₹158 per share
• Lot Size): 94 shares
• Percentage Allocation to Investors):
  • Qualified Institutional Buyers (QIBs)): Not more than 50% of the Net Offer
  • Retail Individual Investors (RIIs)): Not less than 35% of the Net Offer
  • Non-Institutional Investors (NIIs)): Not less than 15% of the Net Offer
  • Eligible Employees): Up to 106,928 Equity Shares
• Lead Managers): PL Capital Markets Private Limited
• Registrar): MUFG Intime India Private Limited (Link Intime)

About the Company

• History: Laxmi India Finance Limited (LIFL) was incorporated in 1996 as Laxmi India Finleasecap Private Limited, received its NBFC license from RBI in 2001, and was acquired by its current promoters in 2010. The name was changed to Laxmi India Finance Private Limited in January 2023 and then converted to a public limited company, Laxmi India Finance Limited, in August 2024.
• Main Products/Services: LIFL is a non-deposit taking non-banking financial company focused on serving underserved customers in India’s lending market. Its product portfolio includes MSME loans, vehicle loans, construction loans, business loans, personal loans, electric vehicle loans, and other lending products. MSME loans are secured against residential or commercial property, while vehicle finance includes private, multi-utility, and small commercial vehicles.
• Sales & Manufacturing Units): As an NBFC, it does not have manufacturing units. Its sales operations are conducted through its branch network.
• Employees: As of March 31, 2025, the company had 1,434 employees.
• Promoters: The promoters of the company are Deepak Baid, Prem Devi Baid, Aneesha Baid, Hirak Vinimay Private Limited, Deepak Hitech Motors Private Limited, Prem Dealers Private Limited, and Vivan Baid Family Trust.
• Branches/Network: As of March 31, 2025, LIFL operates through 158 branches across 83 districts in 5 states: Rajasthan, Gujarat, Madhya Pradesh, Chhattisgarh, and Uttar Pradesh. The company has the widest reach in Rajasthan among its peers.

Financials : Laxmi India Finance

Figures in ₹ Crore

• Post IPO Market Cap: ₹825.83 Cr
• Market Cap/Sales (FY25): 3.33 times
• P/E FY24: 36.74 times
• P/E FY25 (annualized): 22.93 times

Observation on results Laxmi India Finance has demonstrated consistent growth in its financial performance over the past three fiscals. Both revenue and profit after tax have shown significant year-on-year increases, indicating good operational performance. The company maintains a healthy EBITDA margin and has seen an improvement in its net profit margin.

Anchor Investors: Laxmi India Finance

• Laxmi India Finance raised a total of ₹75.51 crore from 11 anchor investors through the allocation of 47.79 lakh shares at ₹158 each.
• The top 10 anchor investors are: Saint Capital Fund (20.2%), BNP Paribas Financial Markets – ODI (16.5%), Compact Structure Fund (13.5%), Cognizant Capital Dynamic Opportunities Fund (11.4%), India Max Investment Fund (9.8%), Holani Venture Capital Fund-I (8.1%), Rajasthan Global Securities (7.1%), Gauri Value Managers LLP (5.3%), Alchemmy Global Opportunities Fund (4.0%), and Arihant Capital Markets (2.1%).

Salient Points

• Use of Funds: The net proceeds from the fresh issue, amounting to ₹143.00 crores, are primarily intended for augmenting the company’s capital base to meet future capital requirements for onward lending.
• Business Scenario: The company focuses on empowering the underserved and promoting financial inclusivity by providing loans to customers who may lack traditional documentation or credit history. The MSME business is considered the core business and the future of India’s growth, with the government making additional provisions for this sector. The NBFC credit sector is projected to grow by 12-15% year-on-year in FY25, driven by demand for retail and MSME loans. Overall MSME non-performing assets (90+ DPD) have been gradually reducing post-COVID, standing at 1.8% as of March 2025.
• Business Operations: LIFL employs a hub-and-branch model coupled with a self-made mobile app for monitoring customer footfall and branch productivity. The company emphasizes a fast and efficient process, leveraging strong IT infrastructure. A significant portion of its loan book is secured, with 98% being secured loans. The company’s risk management framework includes comprehensive credit assessment, underwriting, and focuses on collateral-backed lending.
• Business Strategy: The company plans to expand its geographical footprint by opening more branches in rural and semi-urban areas to secure good business and customer profiles. It aims to diversify its borrowing profile and optimize borrowing costs by accessing funds from a variety of lenders. Strategic acquisitions are also part of its growth strategy, as evidenced by a recent acquisition of another NBFC’s retail lending business for ₹51.69 crores to expand its retail loans and customer base.
• Risks: The issue is perceived as aggressively priced based on recent financial data. The company’s provisions significantly increased from ₹2 crore in FY24 to ₹12 crore in FY25. LIFL has a relatively high leverage with total debt at 4.4 times its net worth. There are indications of increasing asset quality stress and higher impairments in Q1FY26.
• Litigations: As of the Red Herring Prospectus date, there are outstanding litigations against the company, including an income tax demand of ₹0.09 million not acknowledged as debt. There is one criminal proceeding against the company alleging a ₹2 million loss to a complainant. The promoter, Deepak Baid, is also allegedly involved in a criminal complaint regarding the misuse of a repossessed truck. Additionally, there are income tax litigations against the promoters.
• Revenue Split by Region: AUM distribution as of March 31, 2025, shows Rajasthan at 57.59%, Madhya Pradesh at 22.15%, Gujarat at 15.19%, and both Chhattisgarh and Uttar Pradesh at 2.53% each.
• Revenue Split by Product or Service: MSME financing contributed 80.96% of revenues in FY25. As of March 31, 2025, MSME and vehicle loans accounted for 76.34% and 16.12% respectively of the Asset Under Management (AUM).
• Expansion: The company expanded its branch network from 119 in FY23 to 158 in FY25, opening 23 additional branches in FY25 alone, representing a 17.04% year-on-year growth. Asset Under Management (AUM) grew by 32.83% from FY24 to FY25. Disbursements also saw a 36.75% growth in the same period.
• Receivables Trend: The percentage of written-off loans to AUM increased from 0.2% in FY23 to 0.33% in FY25. Net Non-Performing Assets (NPA) increased from 0.33% in FY24 to 0.48% in FY25.
• CAGR Profits/Margins Last 3 Years: Revenue increased by 42% and Profit After Tax (PAT) rose by 60% between FY24 and FY25. AUM grew at a Compound Annual Growth Rate (CAGR) of 36.36% from March 31, 2023, to March 31, 2025. MSME AUM grew at a CAGR of 36.52% and vehicle financing AUM at 47.23% over the same period. Return on Net Worth (RoNW) increased from 11.51% in FY23 to 15.66% in FY25. Net Interest Margin (NIM) was 9.73% in FY25.

Peers Comparison with Industry Peers (as of March 2025)

Salient Points:

• Laxmi India Finance aims to empower the underserved by providing loans to those new to credit or lacking strong documentation, fostering financial inclusivity and participation in India’s growth.
• The company prioritizes an efficient and fast loan disbursal process, supported by a robust IT infrastructure and a strong IT team.
• A healthy balance sheet is attributed to the trust of its lenders, who provide continuous funding at competitive rates, and the dedication of its high-quality team.
• Management fosters a team-centric culture, treating all employees equally from top to bottom, recognizing their hard work as crucial for the company’s growth.
• The MSME sector is seen as the future of India’s growth, and Laxmi India Finance plays a vital role in supporting this vision.
• Funds raised will be primarily used for loan disbursals and business expansion, as interest income is the main revenue driver.
• The company boasts a very diversified lender profile, including major public sector and private banks, small finance banks, and NBFCs.
• The leadership mantra involves trusting and empowering employees, fostering a friendly environment, and collaboratively finding solutions to challenges.
• For potential investors, the message is one of trust: investing in Laxmi India Finance will bring prosperity (“Laxmi will come at your place”), with funds managed diligently for good returns and to be part of India’s growth story.

Management Commentary

• Mr. Deepak Baid, MD):
• Financial Inclusion Focus: The company differentiates itself by providing loans not only to customers with formal income documentation and strong bank records, but also to “new-to-credit” individuals without strong banking or credit history.
• Simplified and Efficient Processes: Laxmi India Finance claims to balance non-harsh, yet not overly lenient, loan processing, prioritizing speed and customer convenience through streamlined turnaround times and full documentation capture.
• Technology Investment: Significant investment is being made in IT infrastructure across onboarding, collection, expense management, and branch operations. In-house mobile apps allow real-time branch and customer monitoring to maintain productivity and quality.
• Secured Loan Portfolio: 98% of the loan book is secured, mainly MSME loans (81%) and vehicle loans (18%). The company prefers to remain focused on secured lending rather than unsecured loan growth.
• Expansion Strategy: Funds from IPO are primarily intended for business expansion, particularly in semi-urban and rural branches, furthering interest income generation through increased loan disbursal.
• Diversified Lender Base: The lender profile comprises 47-48 lending institutions, including major PSU, private, and small finance banks, as well as large NBFCs and government organizations. Largest lending partners include SBI and Union Bank.

Opinion

I may not apply to the IPO though may be suitable for risk takers. Should do OK in long term but similar alternatives are available in the listed space. will reconsider if string QIB support on Day 3.

Post IPO equity capital: ₹26.13 crore, P/E for FY 24: 36.74 times, P/E FY25: 22.93 times (annualized).

• The company focuses on serving underserved customers and promoting financial inclusion.
• LIFL has shown consistent growth in total income and net earnings.
• It operates across five states, with a dominant presence in Rajasthan.
• The company has a high debt-to-equity ratio, indicating significant leverage and aggressive lending.
• Its pricing is considered stretched for a when compared to its peers.
• There are some indications of increasing asset quality stress in recent financial periods.

• This post is exploratory and educational purposes only.
• Standard disclaimer: I am not a SEBI registered analyst and above analysis is for educational purpose only. Iam a postgraduate in engineering & Management . I have in the past cleared some exams like NISM-Series-V-A: Mutual Fund Distributors Certification, NISM-Series-X-A: Investment Adviser (Level 1) Certification and NISM-Series-X-B: Investment Adviser (Level 2) Examination. This post is my view on the subject matter and is only academic and exploratory in nature. It is not meant to influence investment decisions of investors. I may have bias/vested interest in covered Stock/Mutual Funds/NCD etc. due to my own investment or leaning. Further my understanding of the areas on which I write may be imperfect or incomplete and data could be wrong due to limited time and resources at my disposal. Do check the data from company’s RHP and exchanges before making any decision. Please do your own due diligence as stock market/MF investments have high degree of inherent risk.