Fintech Unicorn slice’s Net Loss Rises To INR 405.8 Cr In FY23

SUMMARY

Garagepreneurs Internet Private Limited (GIPL), the parent entity of fintech unicorn slice, had reported a net loss of INR 253.7 Cr in FY22

Quadrillion Finance Private Limited, the NBFC of GIPL, reported a net profit of INR 2.38 Cr in FY23 as compared to INR 9.22 Cr in FY22

Earlier this year, slice, which offers personal loans and UPI payments facility, announced its merger with the North East Small Finance Bank Limited

Garagepreneurs Internet Private Limited (GIPL), the parent entity of fintech unicorn slice, saw its net loss surge to INR 405.8 Cr in the financial year 2022-23 (FY23), as per a report by credit rating agency CARE Ratings.

This translates to an increase of 60% from the net loss of INR 253.7 Cr which it reported in FY22.

“During FY23, GIPL has reported a loss of INR 405.78 Cr due to higher opex and sharp reduction in assets under management (AUM) levels on account of various regulatory changes,” the rating agency said.

The report, dated October 13, also saw CARE Ratings placing the ratings of Quadrillion Finance Private Limited (QFPL), the non-banking finance company (NBFC) of GIPL, on ‘Credit Watch with Negative Implications’ following the announcement of a corporate restructuring for the merger with the North East Small Finance Bank Limited (NESFB).

It is pertinent to note that slice announced its merger with the NESFB in October this year after receiving a nod for the same from the Reserve Bank of India (RBI).

Meanwhile, CARE Ratings said that GIPL’s credit cost (on average AUM basis) stood at 11.93% in FY23 as against 4.60% in FY22. Given regulatory shifts and the sustained increase in operating expenses and credit costs, GIPL is anticipated to register annual losses on a consolidated basis for FY24 as well, it added.

The company is projected to achieve monthly breakeven at the consolidated level in Q4 FY24.

On QFPL, the report said it reported a net profit of INR 2.38 Cr in FY23 as compared to INR 9.22 Cr in FY22. During Q1 FY24, it reported a profit of INR 5.27 Cr.

“QFPL had added resources including manpower to support higher level of AUM leading to relatively higher opex. Opex as a percentage of average tangible total asset (%) stood at 15.41% during FY23 and 18.00% during Q1FY24,” CARE Ratings said.

Founded in 2016 by Rajan Bajaj, slice had to pivot after the Reserve Bank of India (RBI) barred NBFCs from offering credit on prepaid card instruments (PPI). slice, which used to issue credit cards with pre-loaded credit lines, now offers personal loans and UPI payments facility.

The unicorn was also said to have received PPI licence from the RBI last year.

Earlier this year, slice raised INR 75 Cr (around $9 Mn) from Stride Ventures in a debt funding round.