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 fast-growing NBFC serving MSMEs through LAP products, has announced its unaudited financial results for the quarter and half-year ended September 30, 2025, along with considering requests for promoter group reclassification.

Financial Performance Highlights

Purple Finance demonstrated robust growth in the second quarter of FY26, with significant improvements across key financial metrics:

The company's Assets Under Management (AUM) reached ₹163 crore by the end of September 2025, marking an impressive 209% growth over the past year while maintaining a Gross NPA ratio below 1%.

Operational Expansion

Purple Finance has been actively expanding its reach:

• Number of branches increased to 43, up 16% from the previous quarter and 95% year-on-year
• Employee count grew to over 400, an increase from the previous quarter and a significant rise compared to the previous year

Future Outlook

The company aims to reach an AUM of ₹250 crores by the end of the current financial year, supported by deeper market penetration through its expanded network across key MSME clusters.

Board Meeting Outcomes

In a board meeting held on October 17, 2025, from 03:45 p.m. to 05:15 p.m., Purple Finance's directors:

1. Approved the unaudited financial results for Q2 and H1 FY26, which were reviewed by Jogin Raval & Associates, Chartered Accountants.

2. Considered requests from two Promoter Group shareholders for reclassification to the Public category:

   • Mr. Ranjana Pathak, holding 41,72,362 shares (7.67%)
   • Mr. Satyaprakash Pathak, holding 11,46,735 shares (2.11%)

Management Commentary

Mr. Amitabh Chaturvedi, commenting on the results, stated, "Our performance in Q2 demonstrates the scalability and resilience of our business model. We are committed to expanding our reach and achieving profitability while maintaining a quality portfolio."

Purple Finance continues to leverage technology and deep industry expertise to drive responsible growth in the MSME-focused lending sector. The company remains focused on serving micro and small enterprises with secured business loans.