SG Finserve Ltd

Purpose of release

• Launch of a digital lending solution in partnership with BharatPe Money as LSP and Succesship as technology partner.

Key product features

• Fully digital, paperless merchant loans enabling faster approvals and reduced documentation.

Compliance and scope

• Built in line with RBI Digital Lending Guidelines ensuring consent, transparency and compliance.

Partnership roles

• BharatPe Money enables lending; Succesship provides technology platform for end-to-end lending.

Impact and objectives

• Aims to expand formal credit access for MSMEs across India through digital distribution.

Financial Performance

• Q1 FY27 PBT INR72 crores, up 27% QoQ.
• Loan book INR4,552 crores, +16% QoQ, +82% YoY.
• Net worth INR1,539 crores; leverage 2.2x; CAR 32%.
• ROA 5.1% and ROE 14% (annualized).
• NPA nil; asset quality best-in-class; per-employee profitability > INR2 crores.

Operations & Mix

• Two-thirds of loan book in working capital and supply chain; one-third beyond supply chain.
• Apollo-linked ecosystem accounts for around one-third of AUM.
• Factoring and TReDS commercialized in March and April.
• Exploring digital lending and loan against property as growth avenues.
• 52 anchor mandates; INR7,700 crores MOU signed (visibility of book limited).

Capital Structure

• March equity base INR1,460 crores; INR20 crores raised via warrant conversion in April.
• June net worth about INR1,539 crores.
• FY27 end equity expected around INR1,700 crores; no equity raise planned.
• ROA target 4.5-5%; Q1 ROA achieved 5.1%; ROE target 16% from 14%.

Guidance & Outlook

• PBT guidance around INR300 crores for FY27; ~75% YoY growth.
• AUM growth target 25-30% CAGR over 3-4 years; profitability 30-35% CAGR.
• AUM target of INR10,000 crores by FY30 (excluded FY26 base).
• Maintain 25-30% AUM growth and 30-35% profitability CAGR; no material equity raise.

Q&A Highlights

• Management stated no equity raise because they don't need to; equity base around INR1,700 crores by FY27.
• Factoring AUM in Q1 June was INR225 crores; March was INR175 crores; QoQ growth ~INR50 crores.
• ESOP pool of 20 lakh; 55,000 new options granted; remaining pool ~9 lakh.
• SG Insurance Brokers subsidiary to obtain IRDA license; fee-based B2B cross-sell; timeline two-three quarters away.
• GIFT City plan is long-term and regulatory approvals are required; cross-border supply chain opportunity.

Risks & Watchpoints

• Geopolitical uncertainty acknowledged; credit cost stable but business risk remains due to working-capital needs.
• Regulatory approvals for insurance broking and GIFT City; approvals subject to RBI/IFSCA.
• Competition from banks/NBFCs; sustaining nil NPAs remains critical.
• Factoring growth linked to macro programs and market expansion; execution risk exists.

Subsidiary incorporation

• Wholly owned subsidiary SG Alternative Investment Fund Limited incorporated.
• Subsidiary will act as investment manager and/or sponsor for a Category III AIF.
• Date of incorporation: July 16, 2026; certificate received July 17, 2026.
• Authorized capital Rs 1,00,00,000; paid-up capital fully held by SG Finserve.
• Authorized capital comprises 10,00,000 equity shares of Rs 10 each.
• SG Finserve holds 100% shareholding in SG Alternative Investment Fund Limited.
• Registrar of Companies approved the incorporation.

Meeting Details

• Date and time: 14 July 2026, 4:30 PM IST; virtual group conference call with investors and analysts.

Participants

• Key company participant: Company Secretary & Compliance Officer.

Purpose

• Discuss unaudited quarterly results for quarter ended 30 June 2026.

Additional Notes

• Audio recording of the conference call will be available.

Issue Overview

• Type: preferential issue of warrants convertible into equity shares.
• Total issue size: no revision or undersubscription reported.
• Main objectives: fund working capital and general corporate purposes.

Utilisation of Proceeds

• Utilisation as per offer document: Yes.
• No material deviation observed from the offer document.
• WCM utilised ₹11.19 crore; GCP utilised ₹10 crore.
• Unutilised funds: nil; funds fully deployed.

Governance and Compliance

• Approvals: statutory/shareholder approvals not applicable.
• No material events affecting object viability reported.
• No adverse events or market risks noted.

GCP

• GCP utilised ₹10 crore for dealer financing needs.
• GCP not defined in the Offer Document.
• Board approval for allocation not explicitly stated.

Performance Update

• PAT ₹53.68 crore in Q1 FY27, up 119% YoY, 27% QoQ.
• Operating Income ₹136.13 crore in Q1 FY27, up 29% QoQ, 102% YoY.
• NII ₹82.06 crore in Q1 FY27, up 31% QoQ, 92% YoY.
• Loan book reached an all-time high of ₹4,552 crore.
• NPA NIL; RoA 5.1%; RoE 14.0%.
• Equity ₹1,539 crore; Debt/TNW 2.2x; Cost-to-income below 15%.

Strategy & Growth

• Core business is supply chain financing; factoring and TReDS commercialization.
• Deep tier financing and expanding product offerings.
• Launch LAP and digital lending programs.
• Acquiring new customers and strengthening partnerships.
• Guidance emphasizes scalability and sustainability.
• Presence across 30 locations with headcount of 84.

Leadership & Governance

• CEO Vinay Gupta and CFO Sanjay Rajput leading the team.
• Board comprises eminent industry veterans.
• Part of APL Apollo Group; strong corporate backing.
• Credit rating AA (CE) / A1+ by ICRA.

Capital Structure & Liquidity

• Equity stood at ₹1,539 crore; Debt/TNW 2.2x.
• Nil NPAs support balance-sheet quality.
• AA (CE) / A1+ credit rating by ICRA.
• Total equity and headroom enable growth.

Financials

• Unaudited Q1 2026 results approved; revenue from operations ₹13,610.83 lakh.
• Total income including other income ₹13,612.51 lakh.
• PBT ₹7,150.59 lakh; PAT ₹5,367.76 lakh.
• Tax expense ₹1,791.83 lakh.
• EPS: basic ₹8.21; diluted ₹8.05.
• Finance costs ₹5,406.07 lakh; impairment on financial instruments ₹87.42 lakh.
• Impairment reserve created this quarter ₹183.39 lakh; balance ₹862.89 lakh.

Capital actions

• NCDs fully redeemed on 06 Apr 2026; no outstanding obligations.
• Commercial Papers of ₹3,000 lakh issued on 03-Jul-2026.
• Private placement: 6,27,778 equity shares allotted.
• Incorporated wholly owned subsidiary SG Insurance Brokers Limited; no operations yet.

Strategic approvals

• In-principle approval for 51% stake in Succesship Technologies Pvt Ltd; max investment ₹20 crore.
• Final approval subject to due diligence and independent valuation.
• In-principle to establish Finance Company in GIFT City as wholly owned subsidiary.

Leadership changes

• Kush Mishra resigns as Company Secretary & Compliance Officer effective 18 Jul 2026.
• Ankit Sharma appointed Company Secretary & KMP effective 19 Jul 2026.
• CEO, CFO and Company Secretary authorised to file material disclosures.

Utilisation & liquidity

• NCD proceeds ₹50 crore raised and ₹50 crore utilized; no deviation.
• NCDs redeemed on 06 Apr 2026; extinguished.

Commercial Paper details

• Issuance of Commercial Paper aggregating Rs 30 crore.
• Allotment on 09/07/2026; maturity on 31/08/2026.
• Rate 7.30%; tenure 53 days.
• Issued in favour of India Shelter Finance Corporation Limited.
• Credit rating: [ICRA] A1+.
• ISIN INE618R14042; to be listed on BSE Limited.