**Sakthi Finance Limited (SFL)** is a Coimbatore-based **Deposit-taking Non-Banking Financial Company (NBFC)** with a legacy dating back to its **RBI registration in 1998**. Classified as an **Investment and Credit Company (NBFC-ICC)** and positioned within the **Middle Layer (ML)** of the **RBI’s Scale Based Regulation (SBR)** framework, SFL specializes in the niche financing of pre-owned commercial assets. --- ### Core Business Model: Pre-Owned Asset Financing SFL operates as a single reportable segment under **Ind AS 108**, focusing exclusively on the Indian market. Its primary revenue driver is the financing of **pre-owned Commercial Vehicles (CVs)**, infrastructure equipment, and machinery. * **Strategic Niche:** The company capitalizes on freight migration toward higher **Gross Vehicle Weight (GVW)** vehicles. * **Ancillary Revenue:** SFL generates supplementary income through rental yields from **commercial buildings** held as investment properties under operating leases. * **Operational Reach:** Business is driven through an extensive branch network, focusing on high-growth industrial sectors including coal, steel, and cement. ### Digital Solutions & Augmented Technology Suite Beyond traditional lending, the company provides a specialized portfolio of digital corporate solutions designed to streamline governance and shareholder engagement for listed entities: | Platform | Primary Function | | :--- | :--- | | **InStaMeet** | Virtual and hybrid solution for **Annual General Meetings (AGMs)** and investor meets. | | **InSta Vote** | Secure electronic voting (**e-voting**) platform for remote shareholder resolutions. | | **Empower** | Digital solution for corporate governance and compliance management. | | **Meetezy** | Seamless meeting management and scheduling platform. | | **Trackin** | Monitoring tool for corporate actions and logistical workflows. | | **miragle** | Specialized technology integrations and augmented services for enterprise clients. | --- ### Financial Performance & Asset Quality For the financial year ended **March 31, 2025**, SFL demonstrated consistent growth in profitability and income despite a slight contraction in total disbursements. #### Key Financial Metrics | Metric (₹ Crore) | FY 2024-25 | FY 2023-24 | FY 2022-23 | | :--- | :--- | :--- | :--- | | **Total Income** | **215.20** | **206.74** | **191.94** | | **Net Profit After Tax** | **16.65** | **15.71** | **12.49** | | **Total Disbursements** | **761.71** | **791.67** | **821.52** | | **Total Deposits** | **183.37** | **83.91** | **23.89** | #### Asset Quality & Impairment As of **March 31, 2024**, the company’s **Stage-3 / NPA** status showed improvement: * **Total Overdue (>90 days):** **₹40.3 crore** (down from **₹42.09 crore** in 2023). * **Principal Overdue:** **₹32.94 crore**; **Interest Overdue:** **₹7.36 crore**. * **Regulatory Compliance:** As of **June 2025**, **Ind AS 109** allowances exceeded **IRACP** requirements; consequently, no transfer to an impairment reserve was required. * **Security Cover:** Secured NCDs maintain a robust **1.10x** security cover (as of **Dec 31, 2025**) via hypothecation of loan receivables and immovable properties. --- ### Capital Structure & Resource Mobilization SFL aggressively utilizes debt markets and equity instruments to fund its hire purchase operations and maintain regulatory capital ratios. #### Share Capital Overview (as of Sept 2025) * **Authorised Share Capital:** Increased from **₹130 crore** to **₹150 crore**. * **Paid-up Capital:** **₹86.26 crore**, consisting of **6,47,05,882 Equity Shares** (₹10 face value) and **21,55,150 Redeemable Cumulative Preference Shares (RCPS)** (₹100 face value). * **Valuation:** An independent valuation (March 2025) pegged the equity share value at **₹40**. #### Recent Fundraising Activities * **Public NCD Issues:** Successfully raised **₹146.86 crore** (April 2023) and **₹123.67 crore** (July 2024). A new prospectus was filed in **August 2025** for **₹75 crore** with a green-shoe option of **₹75 crore** (Total **₹150 crore**). * **Private Placements:** The Board has a standing authorization to raise up to **₹250 crore** via NCDs and Commercial Papers. * **Preference Shares:** Raised **₹7.66 crore** via private placement in **Q2 FY26** to bolster the **Capital Adequacy Ratio**. #### Credit Ratings (ICRA Limited) * **Fixed Deposits / Cash Credit / NCDs:** **[ICRA] BBB (Stable)** * **Short Term Working Capital:** **[ICRA] A2** --- ### Governance & Strategic Leadership * **Executive Leadership:** **Sri M Balasubramaniam** (Managing Director since 1990) has been re-appointed for a five-year term through **September 2030**. * **Board Composition:** **8 members**, including **4 Independent Directors** (50% of the board), ensuring compliance with **Regulation 17**. * **Committee Consolidation:** On **April 1, 2024**, the company merged its Finance, Investment, NCD Issuance, and Allotment committees into a single **Finance, Investment and Securities Issuance Committee** to improve agility. * **Shareholder Returns:** Maintained a consistent **8% (₹0.80/share)** equity dividend for FY 2024-25. Preference dividends ranged between **8.25% and 9%**. --- ### Risk Profile & Regulatory Outlook SFL operates under a rigorous risk management framework governed by an **ALM Committee** and a **Risk Management Committee (RMC)**. #### Regulatory & Operational Challenges * **RBI Penalty:** Fined **₹6.00 Lakhs** in **January 2024** for **KYC** non-compliance (risk categorization lapses) during FY 2021-22. * **Compliance Delays:** Noted a **20-day delay** in an RMC meeting (FY 2024-25) and a minor **BSE fine** for a one-day delay in the 2022 Annual Report. * **Personnel Changes:** The **Chief Risk Officer (CRO)**, Dr. G. Sundar, resigned in **September 2024**. * **Labour Codes:** The company is evaluating the financial impact of the **New Labour Codes** effective **November 21, 2025**. #### Contingent Liabilities & Litigation | Dispute | Amount (₹ Crore) | Status | | :--- | :--- | :--- | | **Service Tax** | **20.82** | Pending at **CESTAT**; **₹1.43 Cr** paid under protest. | | **Income Tax (AY 16-17)** | **2.17** | Pending at **CIT (Appeals)**; **₹42.24 Lakhs** paid under protest. | #### Market Outlook Management anticipates a positive trajectory for **FY 2025-26**, driven by a projected **GDP growth of 6.3% - 6.5%**, increased government infrastructure spending, and the emerging shift toward **electric commercial vehicles**.