Hasti Finance Limited (**HFL**) is a **Non-Systemically Important Non-Deposit taking Non-Banking Finance Company (NBFC)**. Originally incorporated in **1994** and under its current management since **2010**, the company is listed on the **BSE Ltd**. HFL primarily serves the credit needs of the middle-class and lower-income populations, as well as small-scale enterprises in urban, semi-urban, and rural India. --- ### **Core Financial Services & Market Positioning** HFL operates as a **Loan Company** under a single reportable segment as per **Ind AS-108**. Its business model is built on providing accessible credit to segments often underserved by traditional Tier-1 banking institutions. * **Product Portfolio:** * **Unsecured Business Loans:** Credit facilities for small enterprises and corporate retail customers. * **Personal Loans:** Unsecured lending tailored for individual middle-class consumers. * **Gold Loans:** Secured lending against gold ornaments and jewelry. * **Competitive Strategy:** The company avoids expensive mass-marketing, opting for **small-scale business marketing strategies**. Its value proposition is defined by "ease of access," featuring lower interest rates, minimized penalty burdens, and the provision of moratoriums for high-potential projects. * **Target Demographic:** Primarily **Small Business Owners** and **Middle-class Households**. --- ### **Strategic Realignment: Geographic and Sectoral Pivot** HFL is currently undergoing a fundamental transformation of its corporate structure and operational mandate to diversify revenue streams beyond pure-play financing. * **Headquarters Relocation:** The company is shifting its **Registered Office** from **Chennai, Tamil Nadu**, to **Mumbai, Maharashtra**. This move is designed to enhance **client visibility**, ensure **administrative convenience**, and improve economic efficiency by centralizing operations in India’s financial capital. * **Expansion of Business Objects:** HFL has amended its **Memorandum of Association (MoA)** by inserting **Clause III (A)(7)**. This allows the company to pivot into high-growth infrastructure and service sectors: * **Construction and Contracting:** Acting as a general contractor, builder, and constructor. * **Hospitality:** Establishing and managing hotel operations. * **Operational Goal:** To transition from a regional NBFC into a diversified entity with a presence in infrastructure and hospitality allied activities. --- ### **Financial Performance and Capital Structure** The company has faced significant financial headwinds over the last three fiscal years, characterized by a contraction in total income and widening net losses. **Key Financial Indicators (Figures in Rs. Hundreds):** | Metric | FY 2024-25 | FY 2023-24 | FY 2022-23 | | :--- | :--- | :--- | :--- | | **Total Income** | **45,024.52** | **45,024.52** | **1,02,421.48** | | **Profit / (Loss) After Tax** | **(8,45,602.21)** | **(51,109.86)** | **(34,163.93)** | | **Net Worth** | **11,89,420.00** | **20,35,027.95** | **2,08,61,378.10** | | **Sale of Services** | **NIL** | **NIL** | **NIL** | **Capital Reserves Detail:** * **Authorized Share Capital:** **Rs. 12,01,00,000** (**1,20,10,000 Equity Shares** at **Rs. 10** each). * **Paid-up Share Capital:** **Rs. 10,83,97,300** (**1,08,39,730 Equity Shares**). * **Statutory Reserve:** No transfers were made in the recent fiscal year due to the lack of net profits, as per **Section 45-IC of the RBI Act**. * **Capital Reserve:** **Rs. 18,870** (representing the paid-up value of forfeited shares). * **Dividend:** No dividend was recommended for **FY23** or **FY24** due to incurred losses. --- ### **Asset Quality and Portfolio Management** HFL follows **RBI’s Income Recognition and Asset Classification (IRAC)** norms and **Ind AS** for provisioning. Recent years have seen aggressive cleaning of the balance sheet. * **Major Write-offs (May 2025):** The company approved the write-off of long-standing **Non-Performing Assets (NPAs)** totaling **Rs. 10.72 crores** (Net of **Rs. 5.65 crores** ECL adjustment). Additionally, **Rs. 2.72 crores** in capital advances were written off. * **Strategic Investment Portfolio:** While HFL has no subsidiaries, it maintains equity stakes in the following entities: * **Spider Display Systems Private Limited** * **Finex Express Cargo Private Limited** * **Shirish Express Logistics Private Limited** * **Fast Train Cargo Limited** --- ### **Operational Infrastructure and Governance** The company maintains a dual-office structure and relies on established banking channels for liquidity and transactions. | Feature | Details | | :--- | :--- | | **Corporate Office** | Prabhadevi, Mumbai, Maharashtra | | **Key Bankers** | **The Bharat Co-op (Mum) Bank Ltd**, **IDBI Bank**, **ICICI Bank** | | **Registrar & Transfer Agent** | **Bigshare Services Private Limited** | | **Board Composition** | **5 Members** (including **3 Independent Directors**) | | **Compliance Officer** | **Mr. Ankit Kumar Jha** (Company Secretary as of March 2026) | --- ### **Risk Profile and Regulatory Challenges** Investors should note significant operational and compliance risks that have impacted the company’s stability. **1. Regulatory Non-Compliance:** * **SEBI (LODR) Violations:** Failure to maintain a functional website (**Reg 46**) and non-publication of financial results in newspapers (**Reg 47**). * **Insider Trading:** Incomplete updates to the **Structured Digital Database (SDD)** under **SEBI (PIT) Regulations**. * **Statutory Vacancies:** Historical failure to appoint an **Internal Auditor** (Section 138) and a **Company Secretary** (Section 203) in a timely manner. **2. Financial and Internal Control Weaknesses:** * **Credit Appraisal:** Auditors have flagged a **weak credit appraisal and recovery system**, contributing to negative growth. * **Income Tax Attachment:** A bank attachment order from the **Income Tax Department** has been in effect since **January 2020** regarding demands of **Rs. 1.38 crores to Rs. 1.98 crores**. * **Accounting Standards:** A **Qualified Opinion** was issued for failing to recognize employee benefits (gratuity) via actuarial valuation, violating **Ind AS 19**. **3. Liquidity and Exposure (As of March 31, 2024):** | Asset/Liability Category | Value (₹ in Lakhs/Actuals) | Risk Observation | | :--- | :--- | :--- | | **Total Loans** | **14,43,805.58** | Default considered at **1 year past due**. | | **Cash & Equivalents** | **87.83** | Held with high-rated banks. | | **Trade Payables** | **1,01,286.93** | **₹26,478.05** due within 12 months. | **4. Market Risk:** The company operates in a highly fragmented sector dominated by unorganized players, putting constant pressure on margins and loan recovery. Management utilizes an **Audit Committee** and **Vigil Mechanism** to mitigate these risks, though auditors continue to cite the risk of **management override of controls**.