Moneyboxx Finance Limited has successfully executed a strategic transaction to transfer its stressed loan portfolio to an Asset Reconstruction Company (ARC), resulting in substantial improvements in its asset quality metrics and collection efficiency.

ARC Transaction Details

The company transferred non-performing assets (NPAs) and written-off accounts amounting to ₹60.90 crores to an ARC trust. In return, Security Receipts (SRs) were issued in a 15:85 ratio, effective from June 30, 2025. This transaction, approved by the Working Committee of the Board of Directors, complies with the guidelines issued by the Reserve Bank of India (RBI).

Significant Improvements in Key Metrics

The ARC transaction has led to remarkable improvements in Moneyboxx Finance's financial health:

The company expects a 40-50% recovery from the ARC pool, with the overall recoverable amount (including interest) exceeding ₹80 crores for the ARC assets.

Strategic Shift Towards Secured Lending

Moneyboxx Finance has been strategically pivoting towards secured lending:

• Secured book increased from 6% in March 2023 to 49% in June 2025
• Target of 65% secured book by March 2026 and 80% by March 2027
• Share of secured lending rose to 64% in Q1 FY26 from 36% in Q1 FY25
• Disbursements to the livestock segment declined to 47% from 64% in the same period last year

Focus on Higher Credit Quality Borrowers

The company has tightened its selection standards:

• Nearly 70% of Q1 FY2026 disbursements went to borrowers with Credit Bureau scores of 650 and above
• 49% of disbursements to borrowers with scores between 650-749
• 20.3% of disbursements to borrowers with scores 750 and above

Strong Capitalization and Liquidity

Moneyboxx Finance maintains a robust financial position:

• Capital Adequacy Ratio (CRAR) of 28.4%
• Net worth of ₹262 crore
• Low debt-to-equity ratio at 2.58 times as of June 30, 2025
• Raised ₹494 crore of term debt during FY25 and ₹127 crore during Q1 FY26
• Received sanction of ₹34 crore from the State Bank of India in August 2025
• Debt pipeline of over ₹500 crore for the second half of FY26

Industry Challenges and Company Response

The microfinance industry faced challenges due to new MFI guardrails capping unsecured borrowing at ₹2 lakh per customer, leading to sector-wide asset quality deterioration. In response, Moneyboxx Finance has:

• Established a dedicated collection department with over 180 team members
• Launched an in-house collections app
• Formed an in-house legal team for rigorous legal recourse
• Strengthened its senior leadership structure with key appointments in Sales, HR, Credit, RCU, IT, and Operations

These strategic initiatives, coupled with the successful ARC transaction, position Moneyboxx Finance to navigate the challenging microfinance landscape while maintaining strong portfolio quality and growth prospects.

Moneyboxx Finance Limited , a non-banking financial company, has announced significant corporate decisions following its recent board meeting. The company's Board of Directors has approved several key measures, including a substantial debt issuance and the scheduling of its annual general meeting.

INR 1,000 Crore NCD Issuance Approved

In a strategic move to bolster its financial position, Moneyboxx Finance's board has given the green light for the issuance of Non-Convertible Debentures (NCDs) up to INR 1,000.00 crore. This issuance, to be conducted through private placement, is subject to shareholder approval at the upcoming Annual General Meeting (AGM). The NCDs will be issued in one or more series or tranches, with specifics such as size, tenure, and coupon rates to be determined at the time of each issuance.

Annual General Meeting Scheduled

The company has set September 26, 2025, as the date for its 31st AGM. In line with current corporate practices, the meeting will be held via video conferencing. Shareholders on record as of September 19, 2025, will be eligible to vote on resolutions and attend the virtual AGM.

New Secretarial Auditor Appointment

The board has recommended the appointment of M/s Shashank Pashine & Associates as the company's Secretarial Auditor. This appointment, if approved by shareholders, will be for a term of five consecutive years, spanning from FY 2025-26 to FY 2029-30. M/s Shashank Pashine & Associates, founded in 2018, brings expertise in corporate secretarial services, corporate law matters, and compliance.

Regulatory Compliance and Future Measures

Moneyboxx Finance also addressed a communication from the Bombay Stock Exchange (BSE) regarding a fine of INR 5,000.00 imposed under listing regulations. The board has emphasized the need to establish robust systems to prevent such occurrences in the future, demonstrating the company's commitment to regulatory compliance.

These decisions reflect Moneyboxx Finance's focus on financial growth, corporate governance, and regulatory adherence. The proposed NCD issuance, in particular, signals the company's intent to expand its financial resources, potentially for business growth or refinancing existing debt. Shareholders will have the opportunity to weigh in on these significant decisions at the upcoming AGM in September.