Paragon Finance Limited is a Kolkata-based **Non-Banking Financial Company (NBFC)** registered with the **Reserve Bank of India (RBI)** (Registration No. **B.05.02104**). The company is classified as an **Investment and Credit Company (NBFC-ICC)** and operates within the **Base Layer (NBFC-BL)** under the RBI’s Scale-Based Regulatory framework. ### Core Revenue Drivers and Operational Scope The company operates through a single primary business segment focused on financial services and asset management. Its revenue streams are diversified across credit provision and capital market activities: * **Credit Services:** The company specializes in providing loans against the **hypothecation of vehicles**, as well as extending inter-corporate deposits and general advances. * **Investment Operations:** A significant portion of the company’s activity involves investing in the **equity market**, **mutual funds**, and active **trading in derivatives**. As of March 2025, the company held **6 open Option Contracts** with a net credit balance of **₹41,58,425**. * **Geographic Footprint:** While historically concentrated in Eastern India, the company expanded its reach to the **Western Region** in **September 2025** by establishing a new branch office in **Andheri East, Mumbai**. * **Asset Profile:** Reflecting its nature as a financial services entity, the company reports **zero inventory** and does not own **immovable property** or **intangible assets**. ### Capital Structure and Shareholding Dynamics Paragon Finance maintains a stable equity base, though it recently navigated a period of significant corporate uncertainty regarding its ownership. | Metric | FY 2024-25 | FY 2023-24 | FY 2022-23 | | :--- | :--- | :--- | :--- | | **Paid-up Equity Capital** | **₹4.25 crore** | **₹4.25 crore** | **₹4.25 crore** | | **Promoter Holding** | **70.73%** | **70.73%** | **70.73%** | | **Promoter Pledges** | **Zero** | **Zero** | **Zero** | | **Shareholders' Funds** | **₹30.17 crore** | - | **₹26.68 crore** | | **Dividend Recommended** | **Nil** | **Nil** | **Nil** | **Ownership Transition Update:** A major shift in control was attempted via a **Share Purchase Agreement (SPA)** dated **July 25, 2024**. A consortium led by **Apple Equifin Pvt. Ltd** (Acquirer) intended to purchase a **51.47%** stake (**2,187,630 shares**) and launched a mandatory Open Offer for an additional **26.00%** stake at **₹60.00 per share**. However, this transaction was **terminated on March 22, 2025**, and the Open Offer was withdrawn on **March 28, 2025**. The **RBI rejected** the change in management due to the acquirers' **insufficient net worth and liquid funds**, resulting in a loss of trust by the current promoters. Consequently, the existing Promoter Group retains control. ### Financial Position and Solvency Metrics The company maintains a robust **Tier I Capital** position, significantly exceeding the regulatory minimums required for NBFCs. **Capital Adequacy (CRAR):** | Component (₹ in lacs) | FY 2024-25 | FY 2023-24 | FY 2022-23 | | :--- | :---: | :---: | :---: | | **Tier I Capital** | **2,947.60** | **2,793.40** | **2,646.77** | | **Tier II Capital** | **55.18** | **64.65** | **56.46** | **Equity Breakdown (₹ in lacs):** | Particulars | 31-Mar-2025 | 31-Mar-2024 | 31-Mar-2023 | | :--- | :---: | :---: | :---: | | **Statutory Reserve (u/s 45IC)** | **399.32** | **393.03** | **375.85** | | **Securities Premium** | **251.38** | **251.38** | **251.38** | | **Retained Earnings** | **1,643.12** | **1,617.95** | **1,549.18** | | **Other Comprehensive Income** | **298.36** | **288.75** | **66.14** | | **Total Other Equity** | **2,592.18** | **2,551.10** | **2,242.54** | **Operational Efficiency Trends:** The company experienced volatility between FY22 and FY23, with the **Operating Profit Ratio** declining from **37.82%** to **3.02%** and the **Net Profit Margin** turning negative at **(7.64%)**. However, by FY 2024-25, **Income from Operations** recovered to **₹2.8 crore**. ### Risk Management and Regulatory Compliance Paragon Finance utilizes an **Integrated Risk Management (IRM)** policy overseen by the Audit Committee. * **Credit & Market Risk:** The company mitigates credit risk by lending to high-credit-score borrowers and investing in **highly rated PSU/Government Bonds**. Market risk is managed by a specialized team monitoring Level 1 investments (Equity/Bonds) carried at **FVTPL** or **FVOCI**. * **Liquidity & Interest Risk:** The company maintains a **low Debt-Equity Ratio (0.06)**. Borrowings (totaling **₹151.09 lacs** in 2023) are held at **fixed interest rates**, allowing the company to pass rate increases to borrowers while maintaining a diversified portfolio of saleable securities. * **Compliance Lapses:** The company has faced challenges with timely regulatory filings. It admitted to **non-filing of certain RBI returns** due to technical issues and paid additional fees for delayed **MCA e-forms**. There are also noted omissions regarding **SEBI (SAST) Regulation 10** exemption reports from **FY 2015-16** and **FY 2016-17**. ### Litigation and Contingent Liabilities Investors should note several ongoing legal proceedings that present potential financial exposure: | Dispute Type | Details | Financial Impact | | :--- | :--- | :--- | | **Cheque Dishonour (Sec 138)** | Two cases filed by Manoj Kumar Gupta HUF and Reena Gupta. | **₹3,18,58,875** (Currently stayed by Karnataka High Court) | | **Income Tax Demand** | Demand for **A.Y. 2014-15** currently under appeal. | **₹6,15,010** | | **Partition Suit** | Filed by Mr. Manoj Kumar Gupta in Calcutta High Court. | **Indeterminate** | | **Unsecured Loan Dispute** | Dispute with Ipsa Credit Pvt. Ltd. regarding interest. | **₹2,62,500** (Unprovided) | ### Human Capital and Governance The company has recently expanded its workforce, growing from **5 permanent employees** in 2023 to **10** in 2024. * **Remuneration:** The **Median Remuneration** stood at **₹1.82 Lakhs** in FY 2023-24. * **Executive Pay:** The **Whole-time Director** received **₹79.2 Lakhs**, a ratio of **43.63** times the median employee salary. * **Internal Controls:** Systems are prepared under **Indian GAAP** and are routinely certified by statutory and internal auditors to ensure operational integrity.