Finbud Financial Services Ltd. — IPO Fundamental Research Report
Quick verdict (one line): Finbud is an established retail loan-aggregation / distribution fintech raising growth capital on NSE EMERGE. It shows steady revenue scale and modest profitability but carries material related-party exposure, working-capital borrowings and execution risk tied to marketing/agent expansion — treat as cautiously neutral: suitable for selective SME investors who accept higher liquidity and governance risk after doing the checks listed at the end.
1. Offer snapshot & issue mechanics
Issue type: Fresh Issue (100% book-built) of 50,48,000 equity shares (face value ₹10) — price band / issue proceeds to be finalised and disclosed in the Prospectus. Proposed listing on NSE EMERGE (SME).
Issue calendar: Anchor bidding date — Nov 4, 2025; Issue opens Nov 6, 2025 and closes Nov 10, 2025.
Allocation mix: Standard SME book-build allocation with QIB/NI/retail buckets and a Market-Maker reservation portion; ASBA/UPI methods available. Confirm final lot size and price band when published.
Use of proceeds (management’s plan) — headline allocations (management’s estimates):
Working capital: ₹2,090.00 lakh (largest single item).
Investment in wholly-owned subsidiary LTCV Credit Pvt. Ltd.: ₹1,500.00 lakh.
Business development & marketing: ₹1,775.00 lakh.
Prepayment/repayment of certain borrowings: ₹403.00 lakh.
Balance: General corporate purposes. These amounts are from the RHP fund-use schedule and will be finalised after the Issue Price is set.
2. Business model & market positioning
Core activity: Retail loan aggregation / distribution (consumer loans, personal loans etc.) via a digital + agent distribution model (FinanceBuddha brand). The company also operates through subsidiaries and associated technology/commerce entities to support distribution.
Strengths: Proven platform and agent network; growing revenue base; management with background in retail lending and distribution.
Key risks intrinsic to the model: dependence on partner banks/NBFCs, interest-rate sensitivity, competitive CAC pressure (marketing/agent commissions), and operational regulatory oversight for lending distribution.
3. Management, promoters & governance
Promoters / Founder group:
Parth Pande — Whole-time Director (digital business lead; ex-Citibank retail asset experience).
Vivek Bhatia — Whole-time Director (operations, agent distribution; long entrepreneurial background).
Parag Agarwal — Whole-time Director / CFO (finance & investments background). Biographies and professional experience are disclosed in the RHP.
Board & independents: Independent directors include professionals with fintech, venture and corporate experience (e.g., Payal Shah, Ajay Vikram Singh). Governance committees (Audit, Nomination & Remuneration, Stakeholder) are in place. Investors should review the independent directors’ prior board history and meeting attendance.
Promoter / related-party footprint: The RHP discloses several related-party transactions and promoter loans/advances (detailed schedules provided in the RHP). Related-party flows include loans from promoters, service/management relationships and inter-group investments; management states these were conducted at arm’s length with auditor certification. Still, the magnitude is material and requires detailed review.
(Numbers from the RHP; all ₹ in lakhs unless stated; consolidated where noted.)
Key consolidated GAAP numbers
Revenue from operations:
FY2023: 13,547.82
FY2024: 19,023.97
FY2025: 22,328.28
Stub (31-Jul-25): 8,576.37.
PAT:
FY2023: 183.32
FY2024: 565.78
FY2025: 849.68
Stub (31-Jul-25): 332.93.
EBITDA (consolidated): FY figures show operating profitability improving year-on-year (RHP restated EBITDA table). Example EBITDA (latest): 587.41 / 1,466.10 / 1,058.93 / 423.15 across comparable periods — check full table in RHP.
Balance sheet & leverage (as disclosed)
Net worth (pre-issue):₹3,931.08 lakh (as at 31-Jul-25 / consolidated).
Total debt (as at 31-Jul-25):₹2,048.28 lakh (short-term & long-term combined). Total debt/equity ratio ~ 52.1%. Interest rates on working capital lines vary (examples in RHP show bank/NBFC facilities with rates in mid-teens).
Profitability & returns
PAT margin roughly 2–4% (modest), with ROE and ROCE improving in recent years but still at SME levels — check the ‘Basis for Issue Price’ and KPI tables for peer comparisons.
Analyst interpretation: Finbud demonstrates steady top-line growth (CAGR visible over the last 3 years) and positive PAT, but margins are low and the business is working-capital intensive. The company carries multiple unsecured working-capital borrowings from banks/NBFCs; the IPO partly repays certain borrowings and funds working capital — important for balance-sheet strengthening.
5. Valuation, float & investor demand dynamics
Price / valuation: Issue price / band not disclosed in RHP. Use restated EPS (basic/diluted shown in RHP — e.g., Basic EPS latest reported ₹6.07, prior years 4.04 / 1.31 etc.) and post-issue fully diluted share count (to be disclosed) to compute P/E once price band is set. Do not rely on headline EPS alone — check auditor notes and one-off adjustments.
Public float & liquidity: As an SME listing liquidity tends to be limited vs mainboard; allotment size, market-maker obligations and lot size will affect trading. The RHP contains a Market Maker reservation and agreement to provide liquidity for three years — yet SME liquidity remains constrained relative to mainboard shares.
Investor demand: Anchor / QIB interest will be visible at bookbuild. For SME issues, institutional participation is typically lower; much of the demand comes from retail, HNIs and regional investors. Watch anchor allocations and subscriptions during the QIB window.
Grey Market Premium (GMP): For SME IPOs GMP data is often thin/unreliable — rely instead on anchor allocations and subscription statistics after book-build. (RHP does not provide GMP.)
6. Key risks & governance flags (what to watch closely)
Related-party transactions & promoter loans. RHP discloses loans and repeated transactions with promoters and group entities (schedules with amounts are provided). Even if certified by auditors as arm’s length, materiality warrants granular checking (pricing, outstanding receivables, concessions, leases etc.).
Working-capital intensity & interest costs. Multiple unsecured bank & NBFC facilities at mid-teen rates — rising rates would pressure margins. IPO proceeds earmarked partly for working capital and debt prepayment.
Regulatory / industry risk. Loan distribution activity and agent networks can attract regulatory scrutiny (RBI / consumer finance rules). Compliance lapses could be costly.
SME listing liquidity & price volatility. Expect potentially wide bid-ask spreads and volatility on listing day; market-maker program helps but does not eliminate listing risk.
Disclosure items to reconcile: audit notes, contingent liabilities, and the exact content of monitoring-agency arrangements for IPO proceeds (monitoring required for fresh issue > ₹5 crore). Investors should review the monitoring agreement and auditor certificates.
7. Checklist — what you must verify before bidding (actionable)
Price Band & Implied Market Cap: compute P/E, P/B vs listed peers (other NBFC/fintech SMEs or small finance players).
Full restated consolidated financial statements & auditor notes: reconcile EPS, one-offs, related-party adjustments, and contingent liabilities.
Related-party schedules: table of sales/purchases, loans, leases and outstanding balances for last 3 years (available in RHP) — flag any counterparty >5% of revenue or assets.
Use of proceeds vs demonstrated need: confirm working-capital burn rate, repayment schedule for loans that IPO repays, and independence of monitoring agency reporting.
Promoter lock-in & post-issue promoter shareholding: confirm post-issue promoter % and statutory lock-in (as disclosed in the Prospectus).
Outstanding litigation: extract full litigation table, quantify material cases and potential cash/operational impact.
Market-maker / lot size / liquidity plan: understand how many shares will be freely tradable and expected lot size for your trading strategy.
8. Investment view (practical)
Short-term / listing: SME listings are often volatile; without an attractive price band and visible strong anchor interest, listing gains may be limited. For aggressive traders, small speculative allocation possible — but expect higher volatility.
Medium / long term (2–5 years): Conditional upside if (a) management uses proceeds to reduce high-cost borrowings and fund scalable growth channels (marketing / agent onboarding) and (b) related-party exposures are contained and KPIs (ROE, PAT margin) improve. Otherwise returns may be muted.
9. Final recommendation & next steps
Recommendation:Cautiously Neutral. Don’t subscribe on “hype.” Wait for the final Prospectus (Price Band + detailed post-issue capitalization), review the monitoring agency appointment and the full related-party / litigation schedules, then decide based on valuation vs peers and your liquidity tolerance.
Related-party transactions (summary table)
(Numbers in ₹ lakhs; taken from Finbud’s RHP “Summary Table of Related Party Transactions” and related schedules).
Key related-party / promoter loan activity — Loan taken (year-wise)
Related party / Person
Year ended 31-Jul-25
Year ended 31-Mar-25
Year ended 31-Mar-24
Year ended 31-Mar-23
Vivek Bhatia (Promoter)
—
57.69
226.61
—
Parag Agarwal (Promoter / WTD/CFO)
—
2.26
3.40
1.74
Parth Pande (Promoter / Founder)
8.97
5.00
0.29
—
All Commerce Technologies Pvt. Ltd.
(see RHP table)
(see RHP)
(see RHP)
(see RHP)
Note: the RHP provides a full related-party schedule (sales/purchases, loans, advances, interest, receipts/repayments and outstanding balances) — the loan snapshot above is the headline loan-taking pattern disclosed. For the complete, line-by-line related-party schedule see the “Related Party Transactions” and associated notes in the Restated Financial Information.
Other related-party categories called out (high-level)
Nature of related-party transactions disclosed: loans taken/repayments, management / professional charges, director remuneration, investments (promoter subscriptions), inter-company services and reimbursements.
Auditor certificate: the RHP states related-party transactions were conducted at arm’s length and this is supported by a statutory auditor certificate (see RHP). Still, the RHP warns these transactions could have been on different terms if not with related parties.
Quick red flags to check (act like a prosecutor)
Any single related party >5% of revenue or >5% of assets? (If yes, that’s material concentration risk.) Extract the RHP full schedule and compute % — I included the RHP pointers above.
Promoter loans: interest rate, collateral, repayment terms and whether repayment is dependent on the IPO proceeds. If repayment profile is vague, treat as off-balance liquidity risk.
Reimbursements / cross charges — check for repeated circular transactions that inflate revenue or hide margin erosion. Ask for supporting contracts if you’re committing capital.
B — Restated consolidated financials
(All numbers taken from Finbud’s RHP “Restated Financial Information” tables and summary pages. Figures in ₹ lakhs unless otherwise specified.)
Consolidated Income Statement — selected items
Particulars (Consolidated)
FY2023 (YR end 31-Mar-23)
FY2024 (31-Mar-24)
FY2025 (31-Mar-25)
Stub 31-Jul-25
Revenue from operations
13,547.82
19,023.97
22,328.28
8,576.37.
EBITDA
423.15
1,058.93
1,466.10
587.41.
Profit after tax (PAT)
183.32
565.78
849.68
332.93.
Basic EPS (₹)
1.31
4.04
6.07
2.38.
Consolidated Balance-sheet — selected items
Particulars (Consolidated)
As at 31-Mar-23
As at 31-Mar-24
As at 31-Mar-25
As at 31-Jul-25
Net worth / Equity (₹ lakhs)
(see RHP)
(see RHP)
—
3,931.08 (Net worth referenced at consolidated level / latest stub).
Total borrowings (short + long)
(see RHP detail)
(see RHP)
—
2,048.28 (consolidated closing debt as at stub shown in RHP).
EBITDA margin: improving across periods — check the RHP detailized margins by year.
PAT & EPS: PAT and EPS have improved; ensure EPS is viewed on fully diluted post-issue basis when price band is announced.
Leverage: working-capital borrowings are material; the IPO proceeds intend to reduce working capital stress (use-of-proceeds includes working capital). Confirm exact planned repayment.
Short forensic commentary (what the numbers tell you)
Growth is visible and real — revenue and EBITDA expanded over FY23–FY25, and EPS rose. But improvements are modest in absolute scale (this is an SME issuer), and margins are still sensitive to financing cost and marketing spend.
Working-capital intensity is real — the company uses short-term borrowings; IPO proceeds are partly to plug that gap. If financing rates rise, margins will compress — that’s a structural risk for loan-distribution models.
Related-party loans exist — promoters and KMP have loan activity in recent years (see the summary table above). Auditor has certified arm’s-length, but related-party volume needs exact quantification before you allocate capital.
Liquidity & listing risk — as an SME issue, expect low initial liquidity and price volatility on listing. Don’t pretend this is a main-board large cap.
Actionable next steps (do these before you bid)
Download the RHP pages: go to the RHP section “Restated Financial Information” — extract the full Note 28 related-party table and compute: (a) total related-party revenue as % of total revenue each year; (b) total related-party receivables as % of total assets each year. (RHP reference pages shown above.)
Verify promoter loan terms: demand copies of loan agreements (interest, collateral) or confirm via the RHP schedules. If loans were to be repaid using IPO proceeds, that’s a conditional cash-flow improvement — check exact wording in “Objects of the Issue.”
Check the monitoring-agency arrangement & use-of-proceeds schedule — confirm that working capital repayment and subsidiary investment tranches are strictly monitored and reported.
Compute post-issue diluted EPS and implied P/E once price band is out — include full ESOP/bonus/issue dilution. The RHP provides basic EPS; use the final diluted share count from the Prospectus to value.
Below is the complete related-party extraction for Finbud Financial Services Ltd. pulled and reformatted directly from the company’s RHP. Reproduced the RHP figures into clean tables (loan activity, outstanding balances, and other key related-party flows) and flagged the precise items you must verify. Every table row references the RHP pages where the numbers come from so you can cross-check quickly.
Source: figures and tables are taken from the Finbud RHP (Related-party disclosures / Restated Financial Information).
1) Related-party — Loan taken (year-wise)
(All amounts ₹ in lakhs) — table shows loans taken from promoters / related persons in each year as disclosed in RHP.)
Related party / Person
31-Jul-25
31-Mar-25
31-Mar-24
31-Mar-23
Vivek Bhatia (Promoter)
—
57.69
226.61
—
Parag Agarwal (Promoter / WTD / CFO)
—
2.26
3.40
1.74
Parth Pande (Promoter / Founder)
8.97
5.00
0.29
—
All Commerce Technologies Pvt. Ltd.
(see RHP full table)
(see RHP)
(see RHP)
(see RHP)
Note: the RHP contains a complete line-by-line related-party schedule (loans, repayments, interest, etc.). The sample above captures the headline promoter/person loans disclosed in the “Summary Table of Related Party Transactions.” For the full schedule consult the RHP note referenced.
(Closing balances / outstanding on the date shown — from the loans table and indebtedness notes in RHP.)
Related party / Person
Nature
Closing balance (as disclosed)
Notes / RHP ref
Parag Agarwal
Unsecured loan from related party (working capital)
1.70 (closing balance shown in RHP schedules)
RHP: loans table.
Parth Pande
Unsecured loan from related party (working capital)
13.97
RHP loans table.
Saloni Bhatia
Unsecured loan from related party
282.10
RHP loans table (material amount).
Tanisha Bhalla
Unsecured loan
1.94
RHP loans table.
Vivek Bhatia
Unsecured loan (historic)
179.13
RHP loans table (historic/publication).
These numbers reflect the RHP’s “statement of indebtedness” and related-party loan schedules; they indicate material promoter/related-party exposure in loan form. Verify contracts and repayment terms.
3) Related-party — Other transactions (summary)
(Selected categories of related-party transactions called out in the RHP; convert to a checklist for verification.)
Category
RHP disclosure (what happened)
Key numbers / notes
Director / KMP remuneration & short-term benefits
Short-term employee benefits and director remuneration were disclosed in the related-party table.
RHP shows short-term employee benefit flows and director remuneration; amounts are material in the P&L tables — check Note 28 in RHP.
The RHP records payments/reimbursements and service fees with related entities (e.g., inter-company services, management fees).
Full schedule in RHP (restated financial notes). Confirm pricing policy/TP documentation.
Loans/Working capital from banks (listed)
The company also has bank/NBFC loans (many unsecured) — not R-party but relevant for overall leverage.
Total borrowings as at latest stub ~ ₹2,048.28 lakhs.
Leases / property arrangements
Lease of registered office / sub-lease; RHP lists lessors (some not related).
See leases annexure and property schedules.
4) Aggregate / KPI snapshot (context for related-party exposure)
(Numbers to help you judge materiality — taken from RHP consolidated summary tables.)
Item
Amount (₹ lakhs)
RHP ref
Revenue (FY25)
22,328.28
consolidated summary.
Total borrowings (consolidated, stub)
2,048.28
indebtedness annexure.
Net worth (consolidated, stub 31-Jul-25)
3,931.08
consolidated summary.
Why this matters: compare each related-party outstanding to these aggregate numbers to assess materiality. For example, a related-party closing balance of ₹282.10 lakh (Saloni Bhatia) is a material amount relative to net worth and borrowings.
5) Red flags & items you must verify (action list — exact clauses to request / confirm)
Materiality check: compute each related-party counterparty’s (a) total transactions (sales/purchases/loans) as % of consolidated revenue and (b) outstanding receivables/payables as % of total assets. If any >5% — treat as material concentration and escalate. (RHP full table available — use it to compute these ratios).
Promoter/related-party loans — documentation: obtain/verify loan agreements for each promoter/related-party loan (interest rate, repayment schedule, security, subordination). The RHP shows many unsecured promoter loans; confirm whether any repayments are contingent on IPO proceeds.
Terms & arm’s-length evidence: for recurrent related-party purchases / service fees, ask for supporting contracts, market comparables, quotations and transfer-pricing analysis. The RHP claims arm’s-length and auditor certification — still demand underlying evidence.
Intercompany / circular flows: check whether any related-party transactions artificially inflate revenue (circular reimbursements) or shift profits off the company. Reconcile inter-company eliminations in consolidated numbers.
Repayment source & chronology: if any promoter loans are shown as repaid or to be repaid from IPO proceeds, confirm that the monitoring agency / trustees will supervise those flows and that prepayment penalties are disclosed (RHP shows some estimated prepayment penalties in indebtedness note).
Audit opinion / note language: review the statutory auditor’s certificate accompanying related-party schedule (the RHP includes such a certificate). If the auditor inserts any qualifications or caveats, treat them as high-priority issues.
Contingent liabilities / litigations: check if any related-party has ongoing litigation that could pass risk to the company. The RHP’s litigation section must be cross-checked.
aiTrendview Global Disclaimer
This document has been generated using artificial intelligence tools solely for educational and training purposes.
It does not constitute investment, financial, legal, or tax advice under any jurisdiction, including India.
aiTrendview and its associates are not SEBI-registered research analysts, investment advisers, or portfolio managers.
All data, projections, and opinions contained herein are automatically compiled from publicly available sources and may contain inaccuracies or omissions.
Readers and investors must independently verify all information before making any financial, commercial, or legal decisions.
Market values, financial figures, or performance trends mentioned are illustrative and not forward-looking guarantees.
No part of this report should be construed as a solicitation, recommendation, or endorsement to buy, sell, or hold any security.
aiTrendview, its affiliates, creators, or AI systems assume no liability for any loss, damage, or consequence arising from reliance on this content.
Use of this report implies acceptance of full personal responsibility for all actions taken based on its contents.
Reproduction or redistribution of this AI-generated material without written consent of aiTrendview is strictly prohibited under international copyright and compliance laws.
