Laxmi India Finance Ltd (MAINBOARD)

IPO Details

• Incorporated: 1996
• Business Type: Non-Banking Financial Company (NBFC)
• Core Offerings: MSME loans, vehicle loans, construction loans, and other lending solutions
• Special Focus: Over 80% of MSME loans qualify under Priority Sector Lending

Customer Base:

• Total Customers (as of June 30, 2024): 26,065
  • Active MSME Customers: 15,732
  • Active Vehicle Loan Customers: 6,146
• Customer Growth: Increased by 78.92% from 14,568 (as on March 31, 2022)

Funding Sources :

• Total Lenders: 43 (includes banks and financial institutions)
• Instruments Used: Term loans, Non-Convertible Debentures (NCDs), working capital loans, and overdrafts against FDs

Branch Network :

• Total Branches (as of Sept 30, 2024): 139
• Operational Regions: Rajasthan, Gujarat, Madhya Pradesh, and Chhattisgarh
• Branch Leadership: Highest branch presence in Rajasthan among peers

Strength

Robust Credit & Risk Management: The company has a structured credit assessment and risk framework, focusing on borrowers' credit history and cash flows, which helps manage risks in underserved financial segments effectively.

Strong Rural & Semi-Urban Presence: With deep penetration in rural and semi-urban India, the company leverages direct and indirect sourcing channels to serve underpenetrated credit markets, offering significant growth potential.

Efficient Hub-and-Branch Model: The hub-and-branch structure enhances operational efficiency, reduces costs, and improves customer reach—especially in underserved regions—by enabling faster disbursals and localized service delivery.

Weakness

Dependence on External Funding: The business requires substantial capital, and any disruption or unfavorable terms in raising debt or equity could impact liquidity, operations, and financial health.

High MSME Sector Exposure: With over 75% of revenue from MSME lending, any policy shift or slowdown in the MSME sector may significantly affect the company’s performance.

Regulatory Compliance Risk: Being an RBI-regulated NBFC, failure to comply with RBI inspection observations or regulatory norms can lead to penalties and operational restrictions.