Fusion Finance Limited — PPTs, 24-05-2025: Investor Presentation

1. Financial Highlights:

Fusion Finance reported Assets Under Management (AUM) of ₹8,980 Cr, down 22% YoY, with total disbursements at ₹1,156 Cr, down 61% YoY. Total income was ₹2,319.8 Cr, slightly up YoY but declined QoQ. Net interest income rose 2% YoY to ₹1,285 Cr, while net interest margin compressed 28 bps QoQ to 8.6%. Pre-Provision Operating Profit (PPOP) declined 28% YoY to ₹736 Cr due to higher impairment charges. Gross and Net NPAs improved to 7.92% and 0.30%. Credit costs decreased sequentially to 2.9%, backed by a high coverage ratio (~97%) and faster write-offs. Capital Adequacy Ratio remained strong at 22.4%, boosted pro forma to 30%+ post rights issue. Liquidity stayed robust with ₹1,000 Cr in cash and bank balances.

2. Strategic Initiatives & Growth Drivers:

The company completed a partly paid ₹800 Cr rights issue, oversubscribed 1.5x, reinforcing capital. A branch-level quality team improved sourcing and credit discipline. Disbursements were refocused on existing customers with strong credit profiles and tighter borrower safeguards. Investments in AI/ML-powered underwriting and collections enhanced compliance, fraud control, and digital onboarding. The MSME vertical expanded selectively, targeting secured loans with digital processes and centralized decision-making.

3. Business Developments:

A new CEO was appointed to strengthen leadership. MSME segment grew with ₹673 Cr AUM and ₹348 Cr disbursements across 105 branches in 8 states. Digital collections reached 94%, complementing field methods. Collection teams for MFI and MSME verticals were enhanced with data analytics and omni-channel tools to boost recoveries and reduce portfolio stress.

4. Market Position & Competitive Advantage:

Fusion’s 15+ years of microfinance expertise, 1,571 branches across 22 states, and 32.1 lakh active clients provide scale. The portfolio’s rural focus (~94%) aids risk diversification. Their tech-enabled “touch & tech” model drives efficiency and scalability. Strong governance, experienced management, and solid liability management with a positive ALM position create durable competitive strengths.

5. Investor Implications:

Improving asset quality and lower credit costs signal positive portfolio health momentum. Enhanced capital and liquidity provide growth flexibility. Focused disbursements and disciplined borrower selection reduce execution risks. Ongoing tech investments and MSME vertical expansion offer diversification and long-term expansion potential. Investors should track disbursement recovery and asset quality trends closely.