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 has successfully completed the allotment of equity share warrants worth Rs 39.00 crores to Intellect Money Finvest Private Limited. The Finance Committee approved the allotment on December 12, 2025, marking the completion of the preferential issue process that was initially approved by the Board of Directors.

Warrant Allotment Details

The Finance Committee meeting, held on December 12, 2025, approved the allotment of warrants under the preferential issue framework. The meeting commenced at 3:30 p.m. and concluded at 3:45 p.m.

Regulatory Compliance

The allotment has been completed in accordance with Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The company has also complied with the preferential issue requirements under Chapter V of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018, read with the Companies Act, 2013.

Capital Structure Enhancement

The company had earlier planned 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. The warrants, once converted, will provide Purple Finance with additional equity capital to strengthen its financial position.

Corporate Communication

The disclosure has been uploaded on the company's website at www.purplefinance.in . Company Secretary and Compliance Officer Ruchi Nishar signed the regulatory filing, ensuring proper documentation of the allotment process.

Market Impact

The successful completion of the warrant allotment represents a significant milestone for Purple Finance Limited in its capital raising efforts. The potential conversion of these warrants into equity shares will provide the Mumbai-based financial services company with enhanced financial resources for its business operations.