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The Reserve Bank of India (RBI) on May 29 announced supervisory actions against ECL Finance Limited and Edelweiss Asset Reconstruction Company Limited citing material supervisory concerns. The Reserve Bank has directed ECL Finance Ltd (ECL) to cease and desist, with immediate effect, from undertaking any structured transactions in respect of its wholesale exposures, other than repayment and/ or closure of accounts in its normal course of business. Announcing the action on Edelweiss group entities, the RBI said the action is based on material concerns observed during the course of supervisory examinations, essentially arising out of conduct of the group entities acting in concert. This was done by entering into a series of structured transactions for evergreening stressed exposures of ECL, using the platform of EARCL and connected AIFs, thereby circumventing applicable regulations, the RBI said.

RBI imposes business restrictions on ECL Finance, Edelweiss ARC citing material concerns

Net profit of ECL Finance declined 90.53% to Rs 4.20 crore in the quarter ended March 2025 as against Rs 44.34 crore during the previous quarter ended March 2024. Sales declined 47.87% to Rs 180.76 crore in the quarter ended March 2025 as against Rs 346.74 crore during the previous quarter ended March 2024. For the full year,net profit declined 65.75% to Rs 46.30 crore in the year ended March 2025 as against Rs 135.20 crore during the previous year ended March 2024. Sales declined 50.23% to Rs 616.15 crore in the year ended March 2025 as against Rs 1238.08 crore during the previous year ended March 2024

ECL Finance standalone net profit declines 90.53% in the March 2025 quarter

ECL Finance Limited (ECLF) has successfully completed the merger of Edelweiss Retail Finance Limited (ERFL) into itself, effective September 30, 2025. This consolidation, sanctioned by the NCLT Mumbai Bench and approved by regulators including the RBI and SEBI, aims to optimize capital and streamline the Group’s corporate structure. By integrating ERFL’s business loan and loan-against-property portfolios, ECL Finance strengthens its focus on the MSME sector while achieving greater operational efficiencies and economies of scale. Consequently, ERFL has ceased to exist, with all assets, liabilities, and debt instruments now transitioned to ECLF, which currently manages an AUM of ₹1,133 crore across 26 pan-India branches

ECL Finance Completes Merger with Edelweiss Retail Finance

Despite reducing wholesale exposure by 70%, the Group remains vulnerable with Rs. 6,174 crore in stressed assets (SRs), representing 55% of its on-book portfolio. While the shift toward retail assets and a strong recovery track record mitigate risks, the Group’s stability depends on resolving these residual stressed exposures and ensuring timely investor exits.


H1 FY2026 growth in asset management was offset by high debt costs and credit impairments. Previous profitability relied on Rs. 3,400 crore in Nuvama gains to cover stressed asset write-downs. Future stability depends on successfully selling stakes in mutual funds, alternatives, and mortgages to deleverage and improve operating margins.




Corporate net debt dropped to Rs. 6,608 crore, with plans to clear it in 3–4 years via asset sales and recoveries. In late 2024, the Group raised Rs. 4,514 crore post-restriction lift. Future stability depends on timely divestments and securing sustained, low-cost borrowing.



The issuer has made timely interest payment 

Mr. Ajay Khurana, MD

The Group is pivoting to a retail-centric, asset-light model, supported by Rs. 1.55 lakh crore in mutual fund AUM and Rs. 47,670 crore in alternatives. It has exited wholesale lending and the Nuvama wealth business (generating Rs. 3,200 crore) to focus on scaling its Rs. 4,284 crore retail book. Success now depends on growing retail AUM while maintaining strict asset quality.



The Group monetizes its incubated businesses to manage cash flow and reduce debt, recently generating over Rs. 3,200 crore from Nuvama and Rs. 450 crore from a mutual fund stake sale. It plans further value-unlocking in its alternatives and mortgage units to continue paring down corporate debt. With full or majority ownership across insurance and finance sectors, the Group also maintains a Rs. 3,523 crore borrowing capacity backed by these assets.


Rating agency	Rating	Needle position
CARE	A Stable	between Medium and High Safety
ICRA	A +	near Medium Safety

Security Name: 11.25% ECL Finance Limited 03 May 2025

ISIN: INE804I08643

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