Poonawalla Fincorp Limited , a non-deposit taking systemically important NBFC, has reported strong financial results for the quarter ending September 30, 2025, marking significant growth in its Assets Under Management (AUM) and profitability.

Key Financial Highlights

• AUM stood at ₹47,701.00 crore, up 68.0% YoY and 15.6% QoQ
• Net Interest Income (including fees and other income) at ₹905.00 crore, up 40.3% YoY
• Pre-Provision Operating Profit (PPoP) of ₹387.00 crore, up 38% YoY
• Profit After Tax (PAT) of ₹74.00 crore for the quarter

Asset Quality and Financial Metrics

• Gross Non-Performing Assets (GNPA) improved to 1.59% in Q2FY26 from 1.84% in Q1FY26
• Net Non-Performing Assets (NNPA) at 0.81% in Q2FY26
• Capital Adequacy Ratio at 20.85%, well above the regulatory requirement
• Cost of Borrowings at 7.69%, 35 bps lower than Q1FY26

Expansion and Business Strategy

Poonawalla Fincorp has outlined an expansion strategy, focusing on both digital and physical growth:

1. Branch Expansion: The company plans to open 400 new branches, expanding its physical presence.

2. Product Diversification: Six new products have been launched, contributing to 8% of the total AUM.

3. Digital Initiatives: The company is implementing an AI-first lending model to drive scalability.

4. Secured to Unsecured Mix: The on-book mix stands at 56:44, indicating a balanced approach to risk.

5. AUM Composition:

Management Commentary

Mr. Arvind Kapil, Managing Director and CEO of Poonawalla Fincorp, stated, "We delivered strong AUM growth this quarter supported by increased contribution from our new business verticals. This reflects the successful execution of our diversification strategy. Improved liability management, particularly through cost-effective NCD issuances, strengthened our funding profile. We remain focused on driving sustainable growth with prudent risk management."

Future Outlook

The company's focus on technology-led efficiency and AI-driven lending models positions it for future growth. The expansion of its branch network and product portfolio is expected to drive further AUM growth and market penetration.

Poonawalla Fincorp's strong financial performance, coupled with its strategic initiatives, indicates a positive trajectory for the company in the coming quarters. The balanced approach to secured and unsecured lending, along with improved asset quality, suggests a prudent growth strategy that may appeal to investors looking for stability and growth potential in the NBFC sector.

Poonawalla Fincorp Limited has announced the complete utilization of the ₹1,499.98 crore raised through a preferential issue to its promoter, Rising Sun Holdings Private Limited. The monitoring agency report by CARE Ratings Limited for the quarter ended September 30, 2025, confirms that the funds have been fully deployed across three key objectives.

Allocation of Funds

The company has strategically allocated the raised capital as follows:

Timely Execution and Compliance

The preferential issue was conducted from September 17-18, 2025. Notably, the company reports no deviations from the original objectives outlined for the fund utilization. As of the quarter's end, there were no unutilized funds remaining from this issue.

Financial Performance Context

While the article focuses on the preferential issue, it's worth noting some key financial highlights from Poonawalla Fincorp's recent performance:

• Assets Under Management (AUM) grew by 68% year-over-year to ₹47,701 crore.
• Net Interest Income, including fees and other income, increased by 40.3% year-over-year to ₹905 crore for the quarter.
• The company maintained a stable asset quality with Gross NPA at 1.59% and Net NPA at 0.81%.

Strategic Implications

The full utilization of the preferential issue proceeds, particularly the significant allocation towards repaying borrowings, suggests a strategic move by Poonawalla Fincorp to strengthen its balance sheet and potentially reduce its cost of funds. The allocation for AUM growth and lending activities aligns with the company's reported strong growth in its loan book.

This capital infusion and its deployment demonstrate Poonawalla Fincorp's focus on expanding its lending operations while maintaining a robust financial position in the competitive non-banking financial company (NBFC) sector.

The timely and complete utilization of funds, as verified by an independent monitoring agency, underscores the company's commitment to transparent and efficient capital management, which may bolster investor confidence in its growth strategy and operational execution.