Purple Finance Limited (PFL), a growing non-banking financial company (NBFC) focused on secured lending to MSMEs, has received a credit rating of IND BBB-/Stable from India Ratings and Research (Ind-Ra) for its bank loan facilities and non-convertible debentures (NCDs).

Rating Details

The rating agency has assigned the following ratings:

*Yet to be issued

Key Rating Drivers

Strengths

1. Adequate Capitalization: PFL has demonstrated its ability to raise capital through two successful rights issues, totaling INR 851.54 million.
2. Growing Franchise: The company's assets under management (AUM) have grown significantly from INR 305 million to INR 1,631 million as of September 2025.
3. Experienced Management: PFL's leadership team boasts extensive experience in the financial services sector.

Challenges

1. Modest Operational Scale: The company operates on a relatively small scale compared to industry peers.
2. Geographic Concentration: Maharashtra accounts for 46% of PFL's total AUM, indicating limited diversification.
3. Evolving Profitability: PFL reported a loss after tax of INR 16.20 million in Q2 FY26 and expects to break even in FY27.
4. Limited Portfolio Seasoning: With 68% of the portfolio originated within the past 12 months, the loan book is yet to undergo multiple credit cycles.

Financial Performance

As of September 2025, PFL reported:

Business Model

Purple Finance specializes in providing secured loans to MSMEs in Tier-II and Tier-III cities across six states. The company offers loans against residential or commercial property, with an average ticket size of INR 0.60 million and interest rates ranging from 18% to 24%.

Future Outlook

Ind-Ra's stable outlook reflects PFL's adequate capitalization and growth potential. However, the company's ability to scale operations, diversify its geographic footprint, and achieve sustainable profitability will be key factors to monitor.

As Purple Finance continues to expand, its performance in maintaining asset quality, broadening its funding base, and successfully replicating its business model across new geographies will be crucial for its long-term credit profile.

Purple Finance Limited, a Mumbai-based financial services company, has taken steps towards bolstering its capital base. The company's Board of Directors has approved a postal ballot notice for two key proposals: increasing the authorized share capital and issuing equity share warrants on a preferential basis.

Authorized Share Capital Increase

The company plans to increase its authorized share capital from Rs. 60.00 crores to Rs. 70.00 crores by creating an additional 1 crore equity shares of Rs. 10.00 face value each.

Key Details of the Warrant Issue

Terms and Conditions

The warrants, once issued, will be convertible into an equivalent number of equity shares. The board has approved issuing these warrants to Intellect Money Finvest Private Limited.

Regulatory Process

The board meeting for these approvals was held on October 28, 2025. The company will inform exchanges about the dispatch of notice and e-voting details to shareholders for the postal ballot.

Market Implications

The issuance of these warrants and the increase in authorized share capital indicate Purple Finance's intent to strengthen its financial position. The potential infusion of fresh capital, upon conversion of the warrants, could provide the company with additional resources.

Conclusion

As Purple Finance moves forward with these proposals, the potential capital raise and share capital increase may impact the company's financial position.

Note: The implementation of these proposals is subject to shareholder approval through the postal ballot process.