- **Srestha Finvest is a finance company that earns its keep by lending money and investing in shares - it is, at its core, a two-engine shop. Incorporated in 1985 and listed in India, the company spent decades as a small, standalone entity before a wave of fresh capital from a rights issue to existing equity shareholders between FY23 and FY25 expanded its equity base many times over, giving it the muscle to scale its loan book and make strategic bets on other businesses. Everything it does flows from this simple, recurring approach: raise a pool of money, put most of it to work as interest-bearing loans, and deploy the rest into equity investments that can generate trading gains or dividends.** # Business segments Two engines, one balance sheet - a lending division that generates interest income from loans, and an investment division that trades in equities and takes minority stakes in other companies. ## 1. Financing activities: the interest-earning engine **The company’s main business is giving loans and collecting interest, a straightforward model where it earns a spread between what it charges borrowers and its own cost of funds.** - **Plain-vanilla lending** - it provides loans and advances to various parties, all within India and all classified as “Others” (meaning no public-sector borrowers), with the entire portfolio held to collect contractual cash flows of principal and interest. - **Interest is the revenue driver** - income is recognised over time using the effective interest method, which spreads the earnings evenly across the loan’s life based on the outstanding principal and the agreed rate. - **Credit risk is managed, not avoided** - the company uses an expected credit loss model, building a provision matrix from its own historical loss experience and adjusting it for economic conditions, so that potential defaults are accounted for before they hit. As of March 2025, loans overdue by more than 90 days stood at ₹1,244.14 lakhs, and the company engages external agents to repossess and auction assets when borrowers cannot pay. - **The loan book has scaled rapidly** - total loans grew from ₹2,542.24 lakhs in March 2022 to ₹12,904.15 lakhs by March 2025, a direct result of the capital raised during that period being channelled into lending. ## 2. Investment activities: the equity-returns engine **This division puts capital into shares of other companies and trades in equity derivatives, aiming to capture fair-value gains and dividend income.** - **A portfolio of equity stakes** - as of March 2025, the company held investments worth ₹6,737.57 lakhs, a dramatic jump from just ₹2.76 lakhs in equity shares three years earlier, reflecting the same capital infusion that fuelled the loan book. - **Marked to market, gains flow to profit** - all equity investments are measured at fair value through profit or loss (unless the company chooses an irrevocable FVOCI classification), so rising share prices directly boost reported earnings. - **Derivatives add a trading layer** - the company enters into forward contracts on equities, which are initially recognised at fair value and then remeasured at each reporting date, with the resulting gains or losses hitting the profit-and-loss statement. - **Strategic minority bets** - beyond trading, the company has acquired non-controlling stakes in operating businesses, including a 16.36% share of an FMCG manufacturer (Rhythms Industries) and a 7.978% stake in a forging company serving the oil, gas and defence sectors (Kunj Forgings), treating these as investments rather than related-party deals. # Group structure and partners **The company has one subsidiary that is yet to start operations, and no promoter shareholding - it is a widely held entity with a growing web of strategic investments.** - **A green subsidiary on standby** - Srestha Greentech Pvt. Ltd., incorporated in July 2024 and 75%-owned by Srestha Finvest, is authorised to take up real estate, civil engineering, waste management, and green-technology projects, but has not yet commenced any business activity. - **No promoter, no holding company** - the company has operated without a promoter group since at least FY20, with its top shareholders historically being a mix of HUFs, LLPs, and private limited companies. - **No joint ventures or associates** - the group structure is deliberately simple, with no associate companies or joint ventures as of March 2025, and no Core Investment Company within the fold.