Incred Holdings Limited IPO

01At a glance

What the company does — lends, through its subsidiary InCred Financial Services (IFSL), to salaried individuals, Indian students going abroad, small businesses and other NBFCs; the holding company itself is a merchant banker and manages an alternative investment fund (AP p.3).

Who pays it — borrowers: salaried people earning over ₹40,000 a month, students on postgraduate STEM and business courses abroad, small businesses, schools and e-commerce vendors (AP p.3). The lending subsidiary produced 99.85% of revenue in the nine months to December 2025 (AP p.8).

Why it is raising money — to invest the fresh-issue proceeds in IFSL to add to its capital base (AP p.5). The offer-for-sale proceeds go to the selling investors (AP p.5).

How fast it has grown — AUM from ₹60,661 million in FY23 to ₹125,851 million in FY25 and ₹144,479 million at December 2025; profit from ₹1,091 million in FY23 to ₹3,732 million in FY25 (AP p.6).

The one thing to understand — this is mostly an unsecured lender: 76.43% of gross loans were unsecured at December 2025, and personal loans were 55.56% of AUM (AP p.8). Credit costs are rising — impairment was 2.31% of average AUM in the nine months against 1.74% for FY25 — and return on equity has stayed near 10% (AP p.7).

02The business, in plain words

A consumer and small-business lender borrows from banks and bond markets and lends at higher rates to people and firms that banks serve less well. It earns the spread, minus operating costs and loan losses. With unsecured loans, the losses matter most, because there is no collateral to fall back on.

A salaried borrower, a student heading abroad or a small business needs credit → it applies to InCred through a branch, a partner or online → IFSL assesses it with its own credit models and lends → the borrower repays with interest in monthly instalments.

The group operates 158 branches in 19 states and union territories and reports one segment, financing (AP p.3). Credit ratings are CRISIL AA- and ICRA AA-, both stable (AP p.4).

Earnings equation: Profit ≈ AUM × (yield − cost of funds) − operating cost − credit cost. In the nine months to December 2025, interest on loans was 16.03% of average AUM, the average cost of borrowing 10.05%, operating expenses 5.57% of average AUM and impairment 2.31% (AP p.7).

03Where the money comes from

Source: AP p.8.

The rest of the book is student loans, secured business loans, specialised MSME loans and loans to other financial institutions (AP p.3). Student-loan disbursements for study in the United States were 69.68% of student-loan disbursements in FY25 but 35.04% in the nine months to December 2025 (DRHP p.30). Fee and commission income rose from ₹330.85 million in FY24 to ₹1,373.79 million in FY25 (AP p.7).

04The growth record

Source: AP p.6, AP p.7.

For the nine months to December 2025, net interest income was ₹10,153.46 million and profit ₹2,901.45 million, against ₹7,694.99 million and ₹2,755.42 million a year earlier (AP p.6, AP p.7). Profit grew 5.30% while AUM grew 25.92% (AP p.6, AP p.7).

05What the growth is made of

Loan book growth and fee income. AUM grew 49.00% in FY24 and 39.23% in FY25, and net interest margin held near 10% (AP p.6, AP p.7). Disbursements slowed: up 12.05% in the nine months, against 23.62% in FY25 (AP p.6).

Profit growth in FY23 and FY24 was helped by recoveries. Reported impairment was negative in both years — net write-backs — because of recoveries on a legacy wholesale lending book; excluding that book, impairment was ₹973.19 million in FY23 and ₹1,308.91 million in FY24 (AP p.7). The document reports both lines.

06Earnings quality

Source: AP p.7, AP p.8. December 2025 impairment is for the nine months.

Credit costs have more than offset margin gains: return on AUM fell from 4.09% in FY24 to 3.45% in FY25 and 2.86% in the nine months (AP p.7). Operating cash flow is negative, as for any growing lender — ₹28,157.45 million of outflow in FY25 — and is funded by borrowing (AP p.6). The company, standalone, and some subsidiaries have made losses in the past (DRHP p.53).

07The balance sheet

Source: AP p.6.

Borrowings are 2.4 times net worth at December 2025, our arithmetic. Some bank loans can be recalled on demand (DRHP p.36). Contingent liabilities and commitments were ₹2,418.46 million at December 2025 (DRHP p.49).

08What the money is for

Source: AP p.5.

The holding company passes the money down to its lending subsidiary (AP p.5).

09Who is selling

Source: AP p.1, AP p.9.

Investors' average costs range widely — from ₹27.52 a share for MNI Ventures and ₹41.82 for V'Ocean Investments to ₹159.98 for KKR (AP p.9). V'Ocean acquired shares at ₹140.00 in the year before the filing (AP p.9).

10Promoters

The promoters are Bhupinder Singh, chairman, whole-time director and chief executive and founder of the InCred group, and B Singh Holdings Limited, a Mauritius investment holding company (AP p.4, AP p.5). The board has seven directors, four of them independent (AP p.12).

InCred Capital Wealth Portfolio Managers, a group company, is one of the book-running lead managers to the offer (DRHP p.1, DRHP p.47). Several promoter-group and group companies registered with SEBI have received advisory, warning or deficiency letters in the past (DRHP p.37). One director has not been able to trace documents for his educational qualifications (DRHP p.42).

11Who already owns it

Source: AP p.5.

Promoters and promoter group together hold about 21%, our arithmetic; the rest is spread among investors including Zerodha Broking and Kamath Associates at 1.44% each (AP p.5).

12What changed just before the IPO

• Growth in unsecured lending — personal loans rose from 49.05% to 55.56% of AUM in nine months (AP p.8).
• Student loans — the U.S. share of student-loan disbursements halved (DRHP p.30).
• Credit cost — impairment rose to 2.31% of average AUM in the nine months (AP p.7).

13Capacity and expansion

A lender's capacity is capital and funding. Net worth was ₹42,024 million against borrowings of ₹101,638 million at December 2025 (AP p.6). The fresh issue adds ₹12,500 million gross to IFSL's capital (AP p.5). The document lists expansion of the branch network into new regions, and scaling the loans-against-property book, among its plans and risks (DRHP p.41, DRHP p.49).

14Market size and industry structure

Retail credit in India grew 13% in FY25, according to the CRISIL report cited in the offer document, which forecasts it to reach about ₹122 trillion by FY28 (AP p.4). CRISIL puts the personal-loan market at about ₹14.6 trillion and the education-loan market at about ₹2.0 trillion in FY25 (AP p.4). Those forecasts are CRISIL's, and newboard has not tested them.

15Competitive position

What the document claims, and what it rests on:

• Fastest-growing diversified NBFC by profit growth, and second by AUM growth, from FY23 to FY25, per CRISIL (AP p.4).
• Second-lowest credit cost among diversified peers in FY25, per CRISIL (AP p.4).
• AA- ratings from CRISIL and ICRA (AP p.4).

Against that: the peers it names are far larger, and its return on equity of about 10% is below most of theirs (DRHP p.148).

16Peers the company named

Source: DRHP p.148. Ratios use closing prices on 4 May 2026. The document also names SBI Cards.

The document gives an industry P/E range of 13.19 to 35.43, average 26.99, and a price-to-book range of 2.25 to 5.96 (DRHP p.147). For InCred it gives FY25 earnings per share of ₹5.81, net asset value per share of ₹58.74 and return on net worth of 10.38% (DRHP p.148). No P/E is possible for the company until a price band is set.

17Risks, in plain words

• Unsecured credit. Three quarters of loans are unsecured, and credit costs are rising (AP p.7, AP p.8).
• One product. Personal loans are over half of AUM (AP p.8).
• Student loans and foreign policy. Visa and immigration changes abroad affect demand; the U.S. share has already fallen (DRHP p.30).
• Funding. Borrowings of ₹101,638 million must be rolled over; a rating downgrade would raise costs (DRHP p.52, DRHP p.53).
• Frozen accounts. The collections bank account was blocked or restricted three times in the period covered, including a freeze by a cyber cell in 2023 over a complaint by a non-customer (DRHP p.37).
• A group company as lead manager. InCred Capital Wealth Portfolio Managers is both a group company and a book-running lead manager (DRHP p.1).

18Litigation and regulatory matters

Source: AP p.12.

The large amount is in cases the subsidiaries have filed, not cases against them (AP p.12).

19Related-party transactions

The document lists related-party transactions in the ordinary course as a risk (DRHP p.35), and names group companies — among them InCred Capital Wealth Portfolio Managers — that work in related financial businesses (DRHP p.47).

20What the offer document does not say

In the sections read for this study, the document does not give:

• The size of the legacy wholesale book that produced recoveries in FY23 and FY24, or what remains of it.
• Credit costs by product, particularly for personal loans.
• Why U.S.-bound student lending fell by half, and what replaced it.
• Figures after December 2025, as this filing predates the March 2026 accounts.
• The price band, lot size or issue dates, which is normal at this stage.

21Five questions for management

1. What was the credit cost on personal loans alone in the nine months to December 2025?
2. How much of the legacy wholesale book remains, and what recoveries are still expected?
3. Where are student-loan borrowers going now that the U.S. share has fallen to 35%?
4. How does the group manage the conflict of a group company acting as lead manager to its own IPO?
5. With return on equity near 10%, what change in credit cost or operating cost would lift it?

2Sources and cited facts

This study was read from 2 documents the company filed. The 47 figures it cites are listed under the document each came from, with the page and the sentence as printed.