ICRA

Neogrowth, a digital lender focused on micro, small, and medium enterprises (MSME), is looking to raise Rs 500-crore growth capital through private equity investment even as it is keeps options open for a strategic stake sale, managing director (MD) and chief executive officer (CEO) Arun Nayyar. Nayyar said the additional capital would be crucial to expand and grow the business as the lender aims to double its assets under management (AUM) to Rs 4,000 crore by March 2025. In FY24, Neogrowth reported a gross revenue of Rs 601 crore, up 57 percent from the previous year. Its profit before tax (PBT) rose to Rs 95 crore in FY24 from Rs 24 crore in the previous year. In FY24, it managed assets worth Rs 2,750 crore.

Neogrowth looking to raise Rs 500 crore, eyes AUM of Rs 4,000 crore by March

Net profit of Neogrowth Credit Pvt declined 73.76% to Rs 4.93 crore in the quarter ended September 2024 as against Rs 18.79 crore during the previous quarter ended September 2023. Sales rose 35.92% to Rs 197.06 crore in the quarter ended September 2024 as against Rs 144.98 crore during the previous quarter ended September 2023.

Neogrowth Credit Pvt standalone net profit declines 73.76% in the September 2024 quarter

Net loss of Neogrowth Credit Pvt reported to Rs 8.23 crore in the quarter ended March 2025 as against net profit of Rs 21.19 crore during the previous quarter ended March 2024. Sales rose 3.23% to Rs 178.91 crore in the quarter ended March 2025 as against Rs 173.31 crore during the previous quarter ended March 2024.
For the full year,net profit declined 87.36% to Rs 9.02 crore in the year ended March 2025 as against Rs 71.37 crore during the previous year ended March 2024.

Neogrowth Credit Pvt reports standalone net loss of Rs 8.23 crore in the March 2025 quarter

In FY25, NCPL’s revenue grew 25% and NIMs remained stable at 15.44%, but profitability was severely impacted by credit costs rising to 9.57% (vs. 5.94% in FY24) due to unsecured lending stress. Consequently, ROTA dropped to 0.32% from 2.97%. Improving future ratings will require tighter control over credit costs and operating expenses to offset these elevated write-offs.




Asset quality weakened in FY25, with GNPA rising to 6.80% and adjusted GNPA hitting 14.58% due to ₹216 crore in write-offs. Driven by MSME retail stress, NCPL responded by tightening underwriting and adding 100 collection staff to target a ₹900 crore recovery pool. The company is now pivoting toward secured lending to stabilize high credit costs and protect its bottom line.


The issuer has made timely interest payments.

Arun Kumar Nayyar, MD

Backed by marquee investors (Omidyar, LeapFrog, FMO), NCPL’s net worth reached ₹611 crore by March 2025. The company maintains a healthy 29.07% CAR and a 3.50x gearing ratio, both well within regulatory and rating benchmarks. Despite no new FY25 capital, ongoing investor discussions and prior promoter infusions support a stable outlook with gearing expected to remain below 4x.


NCPL is led by founders Piyush and Dhruv Khaitan (e-payment veterans) and CEO Arun Nayyar (20+ years in SME lending). Supported by a professional board with investor nominees, the leadership recently added Ravi Valia as Chief Risk Officer to bolster its 20-year retail lending expertise and risk governance.


Despite a 3-year 13.39% CAGR, NCPL’s AUM moderated slightly to ₹2,700 crore in FY25. The portfolio shifted toward supply chain finance, which grew to 40.14% of the book, while the unsecured retail lending (neo cash) segment decreased to 59.86%. Future success depends on scaling this portfolio while maintaining strict underwriting and sustained profitability.


NCPL maintains a diversified funding mix (53% domestic, 47% overseas) across ECBs, NCDs, term loans, and PTCs. In FY25, its lender base grew to 48, while the incremental cost of debt fell to 12.2%. Despite portfolio-related covenant breaches with ~25 lenders, no penalties were imposed as most provided waivers. Sustaining competitive rates and expanding domestic bank funding remain key objectives.




Security Name: 12.55% Neogrowth Credit Private Limited 26 Aug 2025

ISIN: INE814O07485

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