CARE Ratings has reaffirmed its ratings on various debt instruments of Poonawalla Fincorp Limited (PFL), highlighting continued strong support from the Cyrus Poonawalla Group and the company’s ability to raise funds at competitive rates. The group, holding a 62.36% stake in PFL through Rising Sun Holdings, has demonstrated financial backing through timely capital infusion, emphasizing the strategic importance of PFL in its portfolio.

PFL’s recent management changes, including the appointment of Arvind Kapil as MD & CEO, have brought a revised product strategy focusing on a diversified retail segment. The company has launched six new products, including education loans and commercial vehicle loans in March 2025, and is planning further expansions to strengthen its market position.

Despite an increase in Gross Non-Performing Assets (GNPA) to 1.85%, largely due to stress in the Small Ticket Personal Loan (STPL) segment, PFL has proactively made accelerated provisions of ₹1,300 crore, maintaining overall asset quality. The company’s Assets Under Management (AUM) rose to ₹30,984 crore as of December 31, 2024, reflecting significant growth from ₹25,003 crore in March 2024.

CARE Ratings notes PFL’s comfortable capitalization, with a net worth of ₹8,057 crore and a gearing ratio of 2.74x. The company has a diversified funding base, with borrowings across term loans, commercial papers, and external commercial borrowings. Liquidity remains strong, with ₹4,808 crore in cash and undrawn bank lines as of December 31, 2024.

The outlook remains stable, with CARE Ratings expecting continued strategic and financial support from the Cyrus Poonawalla Group, enabling PFL to scale its operations while maintaining asset quality and profitability. However, key monitorables include successful execution of its growth strategy, asset quality trends, and profitability metrics in the evolving financial landscape.