1. Our business involves exposure to high credit risk, first-time borrowers in under-served households and businesses in India (with such loans constituting 24.72% of our Loans (AUM) as of September 30, 2024). These borrowers may be adversely affected by economic and other factors that affect their income-earning capacity. Such factors could lead to increased customer defaults which could adversely affect our business, financial condition, results of operations and cash flows.
2. Non-payment or defaults by our borrowers may lead to increased levels of Gross Carrying Amount - Loans - Stage 3 (which aggregated to Rs. 1,267.61 million, Rs. 1,025.97 million, Rs. 772.92 million and Rs. 861.43 million as of September 30, 2024, March 31, 2024, March 31, 2023 and March 31, 2022, respectively) and related provisioning and write-offs on our balance sheet, which could adversely affect our business, financial condition, results of operations and cash flows.
3. We require substantial funds for our business (our total borrowings as of September 30, 2024 were
Rs. 48,894.18 million) and any disruption in our sources of funds could adversely affect our business, financial condition, results of operations and cash flows.
4. We are affected by volatility in interest rates for both our lending and treasury operations, which could cause our net interest income and net interest margin to vary and adversely affect our business, financial condition, results of operations and cash flows.
5. Our Working Capital loans (constituting 8.83% of our Loans (AUM) as of September 30, 2024) are unsecured and are susceptible to credit risks which may result in increased levels of Gross Carrying Amount - Loans - Stage 3, which could adversely affect our business, financial condition, results of operations and cash flows.
6. We depend on the accuracy and completeness of information submitted by our borrowers. Any misrepresentation, fraud, errors in or incompleteness of such information could adversely affect the quality of our credit assessment and adversely affect our asset quality, business, financial condition, results of operations and cash flows.
7. We have recently expanded into affordable home loans and used commercial vehicle loans as new lines of business and if we are unable to grow these new businesses successfully or develop new businesses to address changing borrower needs, our business, reputation, financial condition, results of operations and cash flows may be adversely affected.
8. An inability to recover outstanding amounts due under defaulted loans within our secured loan portfolio (aggregating to 91.17% of our Loans (AUM) as of September 30, 2024) from the sale of collateral, in a timely manner or at all, could adversely affect our business, financial condition, results of operations and cash flows.
9. An inability to meet our obligations, including financial and other covenants under our financing arrangements, could adversely affect our business, results of operations and cash flows.
10. We operate in a highly regulated industry and changes in the applicable regulatory environment or our inability to comply with applicable regulations may adversely affect our business, financial condition, results of operations and cash flows.