Fusion Finance Limited has submitted its monitoring agency report for the quarter ended December 31, 2025, in compliance with Regulation 32(6) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The report was prepared by CRISIL Ratings Limited, the appointed monitoring agency, and has been considered by the company's Audit Committee in its meeting held on February 6, 2026.

Rights Issue Details and Fund Collection Status

The company conducted a rights issue during April 15-25, 2025, raising funds through the issuance of partly paid-up equity shares. The monitoring report reveals comprehensive details about the fund collection and deployment status.

The rights issue involved 6,10,58,392 partly paid-up equity shares at Rs 131.00 per share, with Rs 65.50 paid on application and the balance Rs 65.50 payable through calls by March 31, 2027.

Fund Utilization Status for Q3FY26

The monitoring report indicates no utilization of rights issue proceeds during the quarter ended December 31, 2025. The funds are earmarked for augmenting the capital base to meet future capital requirements arising from business growth and regulatory compliance.

Deployment of Unutilized Proceeds

The unutilized rights issue proceeds totaling Rs 412.82 crore are currently deployed in designated monitoring and allotment accounts to ensure proper tracking and compliance.

The monitoring account balance includes Rs 16.52 crore earmarked for issue expenses and Rs 1.00 crore allocated for business expansion purposes.

Regulatory Compliance and Monitoring Framework

The report confirms compliance with SEBI regulations, with no deviations reported from the disclosed objects in the offer document. CRISIL Ratings Limited continues to monitor the utilization based on management undertakings, statutory auditor certificates issued by M/s B.K. Khare & Co., Chartered Accountants, and bank statements. The company maintains that the funds will support its microfinance operations and ensure compliance with capital adequacy requirements as the loan portfolio expands.

The balance amount of Rs 4.63 crore is expected to be recovered through subsequent reminder calls as per the offer document terms and board decisions, with a final deadline of March 31, 2027. The report was signed by Shounak Chakravarty, Director, Ratings (LCG) at CRISIL Ratings Limited, and submitted to stock exchanges by Company Secretary Vikrant Sadana.

Fusion Finance Limited delivered a remarkable turnaround in Q3 FY26, posting a profit after tax of ₹14.05 crore compared to a loss of ₹22.14 crore in the previous quarter. The microfinance institution demonstrated strong operational momentum with disbursements growing 23% quarter-on-quarter to ₹1,594 crore, marking the highest level recorded in the last five quarters.

Financial Performance Overview

The company's financial metrics showed marked improvement across key parameters during Q3 FY26:

Net Interest Margin improved to 11.32% in Q3 FY26 from 10.85% in Q2 FY26, supported by improving portfolio trends and a reduction in the cost of funds to 10.28% from 10.35% in the previous quarter. The company reported earnings per share of ₹1.05 for the quarter.

Asset Quality Strengthening

Asset quality indicators continued to strengthen during the quarter, reflecting the company's focus on portfolio discipline:

Asset under management stood at ₹6,876 crore as of December 2025, while the active borrower base stood at approximately 23.4 lakh. The company operated through 1,537 branches across 22 states, including 3 Union Territories, with collection efficiency reaching its highest level in the last six quarters.

Balance Sheet Strength

The balance sheet remained robust with strong capital and liquidity positions:

The reported profitability includes a one-time impact of ₹6.91 crore arising from the implementation of the new labour code. The company's strong liquidity position and capital adequacy provide a solid foundation for future growth initiatives.

Leadership Developments

The Board of Directors appointed Mr. Brahmmanand Hegde as Additional Non-Executive Independent Director for a period of five consecutive years effective February 6, 2026, subject to shareholder approval. Mr. Hegde brings over 30 years of experience in microfinance, rural banking, and financial inclusion, having been a founder and key promoter of Vistaar Finance.

Earnings Conference Call Audio Available

The company has uploaded the audio recording of its Q3 FY25-26 earnings conference call on its website. The conference call, which discussed the unaudited financial results for the quarter and nine months ended December 31, 2025, was conducted from 9:30 AM to 10:35 AM IST. The audio recording is accessible on the company's website at fusionfin.com, with the transcript to be made available in due course.

Management Commentary

Mr. Sanjay Gargali, MD & CEO, commented that Q3 FY26 was a quarter of steady and disciplined execution for Fusion Finance. He emphasized the company's focus on strengthening core fundamentals, maintaining portfolio quality, and pursuing calibrated growth. The quarter saw continued improvement in collections across both the overall portfolio and the new book, reinforcing the resilience of the business model.

Overall, Q3 FY26 performance reflects continued balance sheet strengthening, margin expansion, and a return to profitability, positioning the company for the next phase of growth.