Mufin Green Finance borrowing cost drops 263 bps to 11.17% in Q1FY27
- Cost of borrowing fell 263 bps to 11.17% in Q1FY27 from 13.80% in Q1FY26
- Total borrowings rose 101% YoY to ₹1,551 crore from ₹771 crore
- Gross NPA improved to 1.91% in Q1FY27 from 1.94% in the previous quarter
- Debt-to-equity ratio improved to 2.43 times as of March 2026
*this image is generated using AI for illustrative purposes only.
Mufin Green Finance reported a significant reduction in its cost of borrowing during the first quarter of fiscal year 2027 (Q1FY27). The company’s Co Managing Director indicated ongoing profit growth as funding expenses declined.
The Board of Directors approved the Q1FY27 financial results on August 11, 2026. The results were limited reviewed by statutory auditors.
Key Financial Metrics
The NBFC highlighted improvements in funding costs and asset quality alongside a substantial increase in total borrowings.
| Metric | Q1FY26 | Q1FY27 | Change |
|---|---|---|---|
| Cost of Borrowing | 13.80% | 11.17% | -263 bps |
| Total Borrowings | ₹771 crore | ₹1,551 crore | +101% |
| Gross NPA | Data Not Disclosed | 1.91% | Improved QoQ |
Managing Director Kapil Garg noted that the cost of borrowing fell by 263 basis points from 13.80% in Q1FY26 to 11.17% in the current quarter. This reduction coincided with total borrowings rising to ₹1,551 crore, up from ₹771 crore in the same period last year.
Operational Efficiency and Leverage
The company reduced its employee count from 499 in Q1FY26 to approximately 367, aiming for around 300 employees by year-end despite multi-fold AUM growth. This reflects improved operating leverage per disbursement.
The debt-to-equity ratio improved to 2.43 times as of March 2026, down from 2.65 times in March 2025. The lender base expanded from over 20 lenders to more than 35, including new partnerships with PSU banks offering favorable ticket sizes and interest rates.
Product Diversification
Mufin Green Finance emphasized its pivot toward tech-based lending products:
- Mediclaim Financing: A fully digital portfolio of approximately ₹677 crore with minimal delinquency. The company claims to be one of the largest players in this domain.
- Salary Saathi: A digital lending solution integrated with state governments, showing minimal to nil delinquency.
Gross NPA stood at 1.91% in Q1FY27, down from 1.94% in the previous quarter. Net NPA also showed improvement.
What the Numbers Show
The divergence between the 101% rise in total borrowings and the 263 bps decline in borrowing costs suggests successful access to cheaper capital sources, likely driven by the inclusion of PSU banks and rating upgrades. The company is currently in discussions for an upgrade to an 'A' credit rating, which could further reduce funding costs.
Credit Rating Outlook
The company’s credit rating has progressed from BBB to BBB+ and then to A- (Stable). Management expects a one-notch upgrade to 'A' in the next quarter, which should support continued reductions in borrowing expenses.
Historical Stock Returns for Mufin Green Finance
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| -2.15% | -2.47% | -5.69% | +26.20% | +51.07% | -3.23% |
How might the anticipated upgrade to an 'A' credit rating impact Mufin Green Finance's ability to secure even lower interest rates from institutional investors?
What are the potential risks associated with doubling total borrowings to ₹1,551 crore while simultaneously reducing the workforce by over 25%?
Could the expansion into PSU bank partnerships expose Mufin Green Finance to stricter regulatory compliance requirements or slower disbursement cycles?
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