Source: Entrackr
Digital lending company Kissht has submitted draft papers with the Securities and Exchange Board of India to raise ₹1,000 crore through a fresh issue of shares. The filing occurs when Kissht’s financial numbers for FY25 show a decline in revenue and profit compared to the previous year.
Revenue declines 20%
In FY25, Kissht’s operating revenue decreased by 20% to ₹1,337 crore from ₹1,674 crore in FY24 (Registrar of Companies filings).
The company derives revenue mainly from two activities: interest income on loans and sourcing & servicing fees.
Interest income dropped 18% to ₹994 crore.
Sourcing and servicing fees increased 45% to ₹238 crore, driven by growth in its off-book loan portfolio.
Other minor income sources were ₹7 crore from marketing and commission and ₹3 crore in insurance commission.
The company stated that revenues decreased as a result of decreased income from on-book loans. Although the company had growth in its loan book, the income fell as it charged lower rates and longer-tenure loans, which delayed recognition of income. Additionally, customer quality improved and there were fewer loan defaults, which reduced penalties and other charges.
Expenses managed
On the expense side, Kissht cut a number of costs:
- Loan impairment costs halved to ₹327 crores.
- Outsourcing and back-office costs fell by 32% to ₹150 crores.
- Marketing costs fell by 11% to ₹96 crores.
However, there were some costs that increased:
- Finance costs more than doubled to ₹164 crores.
- Employee costs rose by 6.6% to ₹193 crores.
- Overall, total expenses fell by 21% to ₹1,136 crores in FY25, down from ₹1,433 crores in FY24.
Profitability declines
Though expenses were more tightly controlled, lower revenues forced profits lower. Kissht’s net profit declined to ₹160.6 crore in FY25, down 18.5% from around ₹197 crore in FY24. The company reported a Return on Capital Employed (ROCE) of 28.88% and an EBITDA margin of 29.79%.
Ask Kissht how much it spent on every ₹1 of revenue in FY25, and it’s ₹0.85. By March 2025, Kissht had assets of ₹2,161 crore, of which ₹144 crore were cash and bank balances.
Outlook: With the current plan for an IPO, Kissht has demonstrated faith in their growth strategy despite the decline in its revenue or profit for FY25. The company is pursuing off-book lending with improved loan quality while keeping a lid on costs, and it may be possible that all of these factors may help result in better performance in the future.
