IndoStar Capital Finance Limited has completed a significant warrant conversion exercise, allotting 1.39 crore new equity shares to BCPV Multiple Holdings Pte Ltd. This latest development follows the company's ongoing capital strengthening initiatives and represents a substantial boost to its equity base.

Latest Warrant Conversion Details

The company's Board of Directors approved the allotment through a circular resolution passed on December 20, 2025. The conversion involved BCPV Multiple Holdings Pte Ltd., a promoter entity, exercising their rights to convert warrants into equity shares.

Impact on Share Capital Structure

The warrant conversion has resulted in a significant expansion of IndoStar's equity base. The company's paid-up equity share capital has increased substantially following this allotment.

Warrant Conversion Process

The warrants were originally allotted on November 26, 2024, carrying the right to subscribe to one equity share per warrant. The conversion process involved a two-stage payment mechanism where 80.00% of the issue price was paid during warrant allotment and the remaining 20.00% was paid during conversion.

Financial Implications

This warrant conversion brings several positive developments for IndoStar Capital Finance:

Capital Strengthening: The infusion of Rs. 256.67 crores significantly bolsters the company's equity base, enhancing its financial flexibility and lending capacity as a non-banking financial company.

Promoter Commitment: The conversion by BCPV Multiple Holdings Pte Ltd., a promoter entity, demonstrates strong confidence in the company's long-term prospects and strategic direction.

Regulatory Compliance: The newly allotted equity shares will rank pari-passu with existing shares and will be listed on BSE Limited and National Stock Exchange of India Limited upon receipt of listing approval.

Market Position

With the completion of this warrant conversion, IndoStar Capital Finance has successfully expanded its equity base while maintaining promoter participation. The company continues to strengthen its position in the financial services sector through strategic capital initiatives that support its growth objectives and regulatory requirements.

IndoStar Capital Finance Limited , a retail-focused non-banking financial company (NBFC), has reported an 8% sequential growth in quarterly disbursements, signaling positive momentum in its core business segments. The company's strategic shift towards retail lending and its focus on vehicle finance and micro LAP (Loan Against Property) businesses are showing promising results.

Key Financial Highlights

• Disbursements: Rs. 927.00 crores, up 8% from Rs. 858.00 crores in the previous quarter
• Net Interest Income: Rs. 190.00 crores, marking a 15.7% year-on-year increase
• Net Interest Margin: Improved to 7.6% from 5.6% year-on-year
• Net Profit: Rs. 10.40 crores, compared to Rs. 18.00 crores in the same quarter of the previous year
• Assets Under Management: Rs. 7,564.00 crores

Asset Quality and Capital Position

IndoStar Capital Finance has made significant strides in improving its asset quality:

• Gross Stage-III Assets: 3.04%
• Net Stage-III Assets: 1.13%
• Capital Adequacy Ratio: 37.3%
• Debt-to-Equity Ratio: 1.4x

The company completed the sale of stressed assets worth Rs. 309.60 crores to an Asset Reconstruction Company (ARC) for Rs. 220.30 crores, demonstrating its commitment to portfolio quality improvement.

Strategic Transformation and Business Focus

IndoStar Capital Finance has successfully transformed from a corporate lending-focused NBFC to a retail-centric one. Key developments include:

• Vehicle Finance: Remains a core growth engine with improving collections and deepened customer relationships
• Micro LAP Business: Expanding from Tamil Nadu to Andhra Pradesh, with plans to enter 3-4 states
• Housing Finance: Sold its wholly-owned housing finance subsidiary to streamline operations

Operational Improvements

• Collection Efficiency: Approximately 92%
• Cost of Borrowing: Declined to 10.2% from 10.8% year-on-year
• Digital Initiatives: Scaled up customer self-service through the Indo Mitra app and other digital tools

Management Outlook

The management expects disbursements to pick up in the second half of the fiscal year, historically 1.4-1.5 times the first half levels. The company plans to maintain a balanced approach to growth, profitability, and asset quality.

Analyst Conference Call Insights

During the earnings conference call, the management highlighted:

• The company's focus on quality growth in vehicle finance and micro LAP segments
• Plans to expand the micro LAP business to 3-4 states using the existing vehicle finance branch network
• Efforts to improve cost of funds, with incremental borrowing costs now around 9%-9.25%

IndoStar Capital Finance's strategic shift towards retail lending, coupled with its focus on asset quality and operational efficiency, positions it well for sustainable growth in the evolving NBFC landscape. The company's strong capital position and improving funding profile provide a solid foundation for its expansion plans in the vehicle finance and micro LAP segments.