Laxmi India Finance Limited , a prominent player in the Indian financial services sector, has reported significant growth in its Assets Under Management (AUM) and successfully completed its Initial Public Offering (IPO). However, the company also faced some challenges in asset quality due to environmental factors affecting its rural operations.

Financial Highlights

• AUM Growth: Laxmi India Finance achieved an AUM of ₹1,386.49 crores, marking a substantial year-on-year growth of 24.75%.
• IPO Success: The company completed its IPO, raising ₹151.58 crores, which significantly strengthened its capital base.
• Capital Adequacy: The capital adequacy ratio improved to 31.90%, providing a solid foundation for future growth.
• Profitability: The company reported a Profit After Tax (PAT) of ₹19.06 crores.

Asset Quality Pressure

Despite the overall positive performance, Laxmi India Finance faced some asset quality challenges:

• GNPA Rise: The Gross Non-Performing Assets (GNPA) increased to 1.59%.
• Environmental Factors: Floods in Rajasthan and Madhya Pradesh affected the company's rural operations, contributing to the asset quality pressure.

Financial Performance Analysis

Let's take a closer look at the company's financial performance based on the latest available data:

Income Statement Highlights

Balance Sheet Overview

Cash Flow Statement

Analysis and Outlook

Laxmi India Finance has demonstrated strong growth in its AUM and successfully raised capital through its IPO, indicating investor confidence in the company's business model and growth prospects. The significant improvement in the capital adequacy ratio to 31.90% provides a robust foundation for future expansion and regulatory compliance.

However, the rise in GNPA to 1.59% is a concern that warrants attention. The impact of environmental factors such as floods on the company's rural operations highlights the vulnerability of its asset quality to external events. This underscores the need for robust risk management practices and geographical diversification of the loan portfolio.

The company's revenue growth of 26.79% year-over-year is impressive, reflecting its ability to capitalize on market opportunities. However, the substantial decline in EPS (-55.40%) despite growth in net profit suggests potential dilution from the recent IPO or other equity-related events.

The negative cash flow from operating activities (-₹311.30 crores) is typical for growing NBFCs due to increased lending activities. The positive net cash flow of ₹60.20 crores, primarily driven by financing activities, indicates the company's ability to fund its growth through a mix of internal accruals and external financing.

Going forward, Laxmi India Finance should focus on:

1. Improving asset quality and reducing GNPA levels
2. Leveraging its strengthened capital base for sustainable growth
3. Enhancing risk management practices, especially in flood-prone rural areas
4. Optimizing its cost structure to improve profitability ratios

While the company has shown resilience in its growth trajectory, managing asset quality will be crucial for long-term success in the competitive Indian financial services sector.

Investors and stakeholders should monitor the company's ability to maintain growth momentum while effectively managing credit risks and operational challenges in its target markets.

Laxmi India Finance Limited (LIFL) has issued a postal ballot notice to seek shareholder approval for significant amendments to its Employee Stock Option Scheme 2023 (ESOS 2023). The company is looking to ratify and amend the scheme, which was initially approved at the Annual General Meeting held on September 19, 2023, prior to the company's listing on stock exchanges.

Key Amendments Proposed

Scheme Duration

The ESOS 2023 will remain in force until all available options are granted and exercised, or the scheme is terminated by the Board.

Option Pool

The scheme proposes to offer up to 20,90,000 options, each convertible into one equity share of Rs. 5.00 face value.

Eligibility

The scheme covers employees working in India or abroad, including directors (excluding independent directors), but excludes promoters and those holding over 10% of the outstanding equity shares.

Vesting Period

The maximum vesting period is set at 4 years from the date of grant, with a minimum gap of 1 year between grant and first vesting.

Exercise Period

Employees will have up to 5 years from the date of vesting to exercise their options.

Pricing

The exercise price will be determined by the Board/Committee, but will not be lower than the face value of the shares on the grant date.

Special Resolution for High-Value Grants

In addition to the scheme amendments, LIFL is seeking approval for granting options exceeding 1% but not exceeding 4% of the issued capital to identified employees during any one financial year. This provision aims to provide the company with flexibility in rewarding key personnel.

Implementation and Administration

The scheme will be directly implemented and administered by the company through its Board/Committee, without involving a trust structure. The company plans to use the Fair Value Method for calculating employee compensation costs related to the ESOP.

Shareholder Voting

Shareholders can cast their votes electronically from November 19, 2025, to December 18, 2025. The results of the postal ballot will be announced by December 22, 2025.

These proposed amendments to the ESOS 2023 reflect LIFL's efforts to align its employee incentive program with current market practices and regulatory requirements post its listing. The changes aim to enhance the company's ability to attract, retain, and motivate key talent in a competitive financial services landscape.

Shareholders are advised to review the detailed explanatory statement provided with the postal ballot notice before casting their votes on these resolutions.