Finbud Financial Services Limited Makes Strong Debut with 16.09% Premium, Lists at ₹164.85 Against Moderate Subscription

Finbud Financial Services Limited, a loan aggregation platform incorporated in July 2012 assisting individuals and SMEs in obtaining personal, business, and home loans from banks and NBFCs operating through dual agent and digital model, offering comprehensive loan comparison services averaging ₹10 lakhs for personal loans and ₹20 lakhs for business loans with extensive agent network across India, robust digital lending platform with strong technological infrastructure, effective data analytics for customer profiling and loan approval, partnerships with lending institutions. The company commenced trading with a premium of 10.56% opening at ₹157.00 and surged to ₹164.85 with gains of 16.09%.

Finbud Financial Services Limited Listing Details

Finbud Financial launched its IPO at ₹142 per share with minimum investment of 2,000 shares costing ₹2,84,000. The IPO received moderate response with subscription of 4.43 times - retail at modest 2.80 times, QIB at moderate 4.33 times, and NII at solid 8.38 times (bNII at impressive 10.63 times and sNII at modest 3.87 times).

First-Day Trading Performance

Listing Price: Finbud Financial opened at ₹157.00 representing premium of 10.56% from issue price of ₹142.00, surged to ₹164.85 (up 16.09%) maintaining the high throughout early trading with VWAP at ₹157.96, delivering strong gains of ₹22.85 per share reflecting positive market sentiment towards fintech loan aggregation platform despite aggressive valuation concerns.

Growth Drivers and Challenges

Growth Drivers:

Dual Business Model with Extensive Network: Unique agent-based and digital model providing competitive advantage, extensive agent network across India enabling wide geographic reach, comprehensive loan product range including personal loans (₹10 lakhs average), business loans (₹20 lakhs average), and home loans serving salaried individuals and SMEs.

Technology-Driven Operations: Robust digital lending platform with strong technological infrastructure, effective data analytics for customer profiling and loan approval enhancing conversion rates, partnerships with multiple lending institutions providing diverse product offerings, commission-based revenue model from lenders upon successful disbursements.

Strong Financial Growth: Revenue increased 17% and PAT surged 50% between FY24 and FY25, solid ROE of 23.61%, strong ROCE of 32.11%, moderate debt-to-equity of 0.51, though thin PAT margin of 3.81% and EBITDA margin of 6.57%, leadership position with dual model earning higher commission and margins compared to peers.

Challenges

Aggressive Valuation Metrics: Post-issue P/E of 27.08x appearing aggressively priced for loan aggregation platform, pre-issue P/E at 23.40x, price-to-book of 5.53x requiring sustained growth to justify premium valuations, expert review describing issue as "aggressively priced" operating in highly competitive and fragmented segment.

Thin Margins and Working Capital: Low PAT margin of 3.81% and EBITDA margin of 6.57% indicating pressure on profitability despite revenue growth, significant working capital requirement of ₹20.90 crore from IPO proceeds suggesting cash flow management challenges, moderate debt-to-equity of 0.51 with total borrowings of ₹20.48 crore as of July 2025.

Competition and Regulatory Risks: Operating in highly competitive and fragmented loan aggregation space with numerous established players and emerging fintech competitors, evolving regulatory landscape for digital lending and loan aggregation businesses, promoter holding at 64.92% pre-issue with post-issue details not specified raising dilution concerns.

Utilisation of IPO Proceeds

Working Capital and Subsidiary Investment: ₹20.90 crore for working capital requirements supporting operational cash flows and business expansion, ₹15.00 crore investment in wholly owned subsidiary LTCV Credit Private Limited for business growth.

Business Development: ₹17.75 crore funding for business development and marketing activities expanding agent network and digital platform reach, ₹4.03 crore for prepayment/repayment of outstanding borrowings reducing debt-to-equity from 0.51 level, plus unspecified amount for general corporate purposes.

Financial Performance

Revenue: ₹223.50 crore for FY25, growth of 17% from ₹190.28 crore in FY24, reflecting expanding loan aggregation operations through agent and digital channels.

Net Profit: ₹8.50 crore in FY25, growth of 50% from ₹5.66 crore in FY24, demonstrating improving operational leverage despite thin margins.

Financial Metrics: Solid ROE of 23.61%, strong ROCE of 32.11%, moderate debt-to-equity of 0.51, thin PAT margin of 3.81%, EBITDA margin of 6.57%, price-to-book of 5.53x, post-issue EPS of ₹5.24, P/E of 27.08x, and market capitalisation of ₹270.03 crore.