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Business News/ Companies / Start-ups/  Lendingkart looks to turn profitable this FY

Lendingkart looks to turn profitable this FY

The company, which posted its second straight profitable year in FY20, incurred a net loss of ₹28.4 crore in FY21, despite its lending arm making a net profit of ₹19 crore.

Harshvardhan Lunia, founder and CEO, Lendingkart.Premium
Harshvardhan Lunia, founder and CEO, Lendingkart.

NEW DELHI/BENGALURU : Lendingkart Group, which comprises small and micro enterprise (SME) lender Lendingkart Finance Ltd and fintech platform Lendingkart Technologies Pvt. Ltd, expects to make a net profit this financial year, turning around from two consecutive years of losses, said a top company executive.

Lendingkart, which posted its second straight profitable year in FY20, incurred a net loss of 28.4 crore in FY21, despite its lending arm making a net profit of 19 crore. The losses swelled over sevenfold to 203 crore in FY22 due to conservative provisioning, owing to the pandemic. The company, however, has again started making profits and is targeting an initial public offering (IPO) in the next six to eight quarters, said Harshvardhan Lunia, founder and CEO, Lendingkart.

Lendingkart Group posted a profit before tax of 51 crore in H1FY23, which it expects to increase to about 110 crore by March-end, said Lunia. The lending arm of the company recorded a profit before tax of 85 crore in H1 FY23 and is expected to end the fiscal at 170 crore, he added.

In terms of revenue, the company is looking to end FY23 at 825 crore, up from 616 crore last fiscal. “We will be among the few startups in the country with $100 million revenues," said Lunia.

Profit after taxes at the group level and lending vertical for the first half of FY23 stood at 19 crore and 53 crore, respectively, he said. 

To spearhead growth, the company also aims to raise a funding round later this calendar year ahead of the IPO.

Lendingkart was founded by Lunia and Mukul Sachan in 2014. Sachan left the company in 2019 and joined Optimus Capital as an investor. The company has been providing capital access to SMEs, and pits against the likes of Aye Finance, Clix Capital, NeoGrowth, and FlexiLoans. It is backed by Fullerton Financial Holdings Pte Ltd, Bertelsmann India Investments, Sistema Asia Fund and IndiaQuotient.

To date, the company has disbursed loans worth about 11,500 crore. Its gross non-performing assets (NPA) ratio is at around 1.5%. “We will close this year at a book size of 5000 crore. We aim to close FY24 and FY25 at around 7500 crore and 11,000 crore, respectively. That’s more than a 2x growth in 2-3 years," said Lunia.

Lendingkart launched four fintech platforms—2gthr, Cred8, Xlr8 and Collec10—aimed at enhancing the lending capabilities of banks and other lenders. In turn, it helps the company to mitigate the risks involved in lending. “Balance sheet business is a risky business. So, we are diversifying ourselves to a risk-free platform business," said Lunia.

So far, the co-lending platform 2gthr has shown the most potential, with several public and private sector banks deploying it in their operations. Its API and SaaS platform Xlr8 comes second in terms of recent performance.The company is now looking to add more products to its portfolio.

“We are actively looking at the SME cards segment. We feel that SME cards space is least penetrated. With our focus on micro and small businesses, and being able to understand the segment, it could be a great addition for us," Lunia said.Currently, Lendingkart has a nationwide presence. “We have not disbursed more than 15% of our loan book to a particular state. Gujarat and Maharashtra come closer to the figure," he said.

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Published: 15 Dec 2022, 08:41 PM IST
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