Abhishek Finlease Limited is an Ahmedabad-based financial services firm incorporated in **1995**. The company operates as a **Non-Deposit Taking Core Investment Company (CIC)**, maintaining its registration with the **Reserve Bank of India (RBI)** under **Section 45-IA** of the RBI Act, 1934, since **1998**. As a specialized **Non-Banking Financial Company (NBFC)**, the firm bridges the gap between traditional banking and niche credit requirements, focusing on investment activities and credit delivery within the Indian market. --- ### **Core Revenue Streams and Asset Management** The company’s business model is centered on the acquisition of securities and the strategic granting of loans. Revenue is generated through three primary channels: * **Interest Income:** Earned on loans granted. In compliance with prudential norms, income is recognized on an **accrual basis**, with the exception of **NPA, Substandard, and Doubtful** loans, which are recognized strictly on a **cash basis**. * **Dividend Income:** Accounted for on a **cash basis** from the company’s investment portfolio. * **Trading & Investment:** The firm actively purchases shares and securities for **trading purposes** while maintaining a separate portfolio of long-term investment holdings. **Asset Safeguarding:** The company holds shares as **security via pledge** against outstanding loans. In the event of default, proceeds from the sale of such pledged shares are credited to the respective party's account to offset liabilities. --- ### **Strategic Growth and Portfolio Diversification** Abhishek Finlease is currently transitioning from an incubation phase to an active expansion cycle, aiming to capitalize on the **World Bank’s** recognition of NBFCs as pillars of macroeconomic stability. **New Service Verticals:** The company is diversifying its financial services portfolio to include: * **Specialized Financing:** Factoring, Lease Finance, Venture Capital Finance, and Road Transport Financing. * **Securities-Based Lending:** Targeting high-margin segments such as **Loan against Shares**, **Margin Funding**, **IPO Financing**, and **Promoter Funding**. * **MSME Focus:** Strengthening its presence in the **Micro, Small, and Medium Enterprises** retail finance space. * **Strategic Partnerships:** Exploring collaborations with **Payments Banks**, **Insurance companies**, and **Asset Management Companies** to offer a comprehensive suite of financial products. --- ### **Capital Structure and 2025 Preferential Allotment** In early **2025**, the company executed a strategic capital infusion to meet **RBI Net Owned Fund (NOF)** requirements and provide the liquidity necessary for its expansion goals. | Event | Details | | :--- | :--- | | **Total Funds Raised** | **Rs. 1,49,98,830** (approx. **Rs. 1.50 Crores**) | | **Instrument** | **3,48,810** fully paid-up **Equity Shares** | | **Issue Price** | **Rs. 43.00** per share (Face Value **Rs. 10** + Premium **Rs. 33**) | | **Allotment Basis** | **Preferential Basis** to Promoter and Non-Promoter categories | | **Post-Allotment Capital** | Increased from **Rs. 4.26 Crores** to **Rs. 4.61 Crores** | | **Total Post-Issue Shares** | **46,12,710** Equity Shares | --- ### **Financial Performance and Asset Quality** The company has demonstrated significant growth in both top-line revenue and bottom-line profitability over the most recent audited cycles. **Comparative Financial Metrics:** | Metric | FY 2023-24 (INR) | FY 2022-23 (INR) | Growth (%) | | :--- | :--- | :--- | :--- | | **Total Revenue from Operations** | **24,28,014** | **10,39,309** | **~133.6%** | | **Net Profit After Tax (PAT)** | **17,03,082** | **8,55,388** | **~99.1%** | | **Dividend Recommended** | **Nil** | **Nil** | **N/A** | **Asset Recovery and Valuation:** * **Loan Recovery Status:** The company has initiated **Civil and Criminal legal remedies** for outstanding loans totaling **Rs. 45,40,477**. Because immovable properties have been taken into possession as security, management has made **no provision** against these loans, intending to recover full dues through asset disposal. * **Inventory Valuation:** Stock-in-trade (shares/securities) is valued at the lower of **cost or market value**. Where market quotations are unavailable, valuation relies on **cost** or **management-estimated net realizable value**. * **Legal Costs:** Expenses related to the recovery of loans or realization of security are charged directly to the revenue account. --- ### **Operational Framework and Governance** The company operates under a strict regulatory framework to ensure stability and compliance with the **Companies Act, 2013** and **RBI guidelines**. * **Regulatory Status:** Registered as a **Non-Deposit Taking CIC**. The Board has passed a formal resolution **prohibiting the acceptance of public deposits**. * **Accounting Standards:** Financials are prepared in accordance with **Ind AS (Indian Accounting Standards)**. Depreciation is calculated using the **Written Down Value (WDV)** method. * **Internal Controls:** Maintains an internal audit system commensurate with its size. All **Related Party Transactions** comply with **Sections 177 and 188** of the Companies Act. * **Leadership:** To ensure continuity during this growth phase, **Mr. Mahendra M Shah** was re-appointed as **Managing Director** for a **5-year term** effective **April 1, 2025**. --- ### **Risk Landscape and Mitigation Strategy** Abhishek Finlease operates in a high-competition environment where it must contend with the structural advantages of large commercial banks. **Key Risk Factors:** * **Cost of Funds:** Banks have access to **low-cost CASA deposits**, whereas NBFCs face higher borrowing costs, limiting interest rate arbitrage. * **Regulatory Pressure:** Stringent **RBI Capital Adequacy Norms** and increased supervisory oversight increase the cost of compliance. * **Market Volatility:** Fluctuations in the securities market directly impact the valuation of the company’s trading portfolio and the value of pledged collateral. * **Credit Risk:** Potential for counter-party failures, particularly from unorganized regional players or MSME borrowers. **Mitigation Approach:** The company employs a systematic approach to risk, utilizing robust **Internal Control Systems** to safeguard assets and ensure transaction accuracy. By focusing on specialized target groups where traditional banks are cautious, the company aims to maintain margins despite the higher loss-absorption capacity of its larger competitors.