Fusion Finance Ltd

ICRA stated that the rating action factors in the continued deterioration in Fusion Finance Limited's (Fusion) asset quality and earnings profile. The company's gross stage 3 assets increased to 12.6% as of December 2024 from 9.4% as of September 2024 (2.9% as of March 2024) amid industry-wide stress in the asset quality. Consequently, the earnings profile was adversely impacted and Fusion continued to report losses for the third consecutive quarter. It reported a net loss of Rs. 719 crore in Q3 FY2025, a sharp increase from the losses of Rs 305 crore and Rs 36 crore in Q2 FY2025 and Q1 FY2025, respectively, resulting in an aggregate loss of Rs 1,060 crore in 9M FY2025 vis-'-vis a net profit of Rs. 505 crore in FY2024. The deterioration in the asset quality was due to various industry wide factors including, but not limited to, adverse climatic conditions, attrition at the field level, worsening of credit discipline and overleveraging of borrowers. ICRA has taken note of the corrective measures being taken by the company. Nonetheless, its ability to arrest further slippages and achieve recoveries from delinquent customers remains monitorable. Further, given the deterioration in the asset quality and profitability, Fusion was in continued breach of various financial covenants as on 31 December 2024, making these borrowings repayable on demand. As a result, the statutory auditor highlighted material uncertainty regarding the company's ability to continue as a going concern, though it has obtained an extension of less than 12 months from lenders for borrowings aggregating Rs 4,145 crore as on 31 December 2024. While the liquidity profile is adequate at present, it could face pressure on the company's inability to obtain the requisite waivers. The rating continues to factor in Fusion's established track record of operations with a presence in 22 states/Union Territories (UTs) as of December 2024. Itis in the process of raising equity capital via a rights issue of up to Rs 800 crore (of which Rs 400 crore is expected in March 2025), which shall help it maintain a prudent capitalisation profile while providing for the deterioration in the asset quality and the consequent losses. Fusion Finance is amongst India's leading non-banking financial company-microfinance institutions (NBFC-MFIs). As on 31 December 2024, Fusion had a presence in 496 districts across 22 states/UTs through 1,506 MFI + MSME branches. It had reported a net loss of Rs 1,060 crore in 9M FY2025 on gross AUM of Rs 10,599 crore as on 31 December 2024 vis-'-vis a net profit of Rs 505 crore in FY2024 on gross AUM of Rs 11,476 crore as on 31 March 2024. The scrip had risen 0.86% to end at Rs 164.20 on the BSE on Friday. Powered by Capital Market - Live

Net loss of Fusion Finance reported to Rs 719.32 crore in the quarter ended December 2024 as against net profit of Rs 126.45 crore during the previous quarter ended December 2023. Sales declined 20.10% to Rs 473.81 crore in the quarter ended December 2024 as against Rs 593.03 crore during the previous quarter ended December 2023. ParticularsQuarter EndedDec. 2024Dec. 2023% Var. Sales473.81593.03 -20 OPM %-63.1859.04 - PBDT-504.32168.88 PL PBT-507.52166.50 PL NP-719.32126.45 PL Powered by Capital Market - Live

Fusion Finance will hold a meeting of the Board of Directors of the Company on 12 February 2025.Powered by Capital Market - Live

Fusion Finance will hold a meeting of the Board of Directors of the Company on 4 December 2024Powered by Capital Market - Live

Total income rose by 23.19% year-over-year (YoY) to Rs 703.71 crore during the quarter. Net interest income (NII) improved by 30.46% to Rs 397.29 crore in Q2 FY25 from Rs 304.54 crore in Q2 FY24. Net interest margin in Q2 FY25 was 11.48% in Q2 FY25 as against 11.12% in Q2 FY24. Accordingly, the NBFC's pre-provision operating profit (PPOP) for the second quarter was Rs 283.84 crore, up 17.39% YoY. The impairment charge on financial instruments increased sharply to Rs 694.05 crore in Q2 FY25 from Rs 76.20 crore in Q2 FY24. Expected credit loss (ECL) provision jumped to Rs 1,140.62 crore in Q2 FY25 from Rs 300.24 crore in Q2 FY24. Consequently, the company posted a pre-tax loss of Rs 410.21 crore in Q2 FY25. The firm had recorded a pre-tax profit of Rs 165.59 crore in Q2 FY24. Gross NPA was 9.41% as on 30 September 2024 as against 2.68% as on 30 September 2023 and 5.46% as on 30 June 2024. Disbursements stood at Rs 1,661 crore in Q2 FY25, which is lower by 29.13% as compared with the quantum of Rs 2,343.77 crore disbursed in Q2 FY24. Asset under Management (AUM) grew by 15.41% to Rs 11,571 crore in Q2 FY25 from Rs 10,026 crore in Q2 FY24. Devesh Sachdev, MD & CEO, Fusion Finance, said: 'During Q2 FY25, we continued to experience the impact of delinquency trends seen industry-wide, making this a tough quarter. As shared previously, we have been closely tracking the evolving credit behaviour of the borrowers and have implemented strong measures to tighten credit criteria for new disbursements along with an increased focus on field collections and have also curtailed our growth resulting in muted AUM numbers QoQ basis. Our ECL provisioning for this quarter is higher, thus impacting our overall profitability. Having said that, our pre-provisioning profit (PPOP) on YoY basis remains steady, and we continue to have a strong balance sheet with a healthy CAR of 24.39%. We expect to file the documents for rights issue of up to Rs 550 crore in this quarter. As we continue to take a calibrated approach, our focus will be on treading the prudent growth path.' Fusion Finance is amongst India's leading non-banking financial company-microfinance institutions (NBFC-MFIs). The company has been growing consistently with an extensive network of 1,463 branches spread across 22 states including 3 Union Territories, as of 30 September 2024. The scrip had tumbled 4.99% to end at Rs 177.85 on the BSE on Thursday. Powered by Capital Market - Live

Net loss of Fusion Finance reported to Rs 305.04 crore in the quarter ended September 2024 as against net profit of Rs 125.69 crore during the previous quarter ended September 2023. Sales rose 26.51% to Rs 691.55 crore in the quarter ended September 2024 as against Rs 546.64 crore during the previous quarter ended September 2023. ParticularsQuarter EndedSep. 2024Sep. 2023% Var. Sales691.55546.64 27 OPM %-27.7961.11 - PBDT-407.36167.68 PL PBT-410.21165.59 PL NP-305.04125.69 PL Powered by Capital Market - Live

Fusion Finance has revised the meeting of the Board of Directors which was scheduled to be held on 11 November 2024. The meeting will now be held on 14 November 2024.Powered by Capital Market - Live

Fusion Finance will hold a meeting of the Board of Directors of the Company on 14 November 2024Powered by Capital Market - Live

Fusion Finance will hold a meeting of the Board of Directors of the Company on 11 November 2024Powered by Capital Market - Live

Fusion Finance announced that an Extra Ordinary General Meeting (EGM) of the Company will be held on 30 October 2024 .Powered by Capital Market - Live