Indifi’s NBFC Arm’s Loss Zooms To INR 8 Cr In Q1 FY26

Indifi Capital, the NBFC arm of MSME-focussed lendingtech startup Indifi Technologies, reported a net loss of INR 8 Cr in the first quarter of FY26 (Q1 FY26), up 5.7X from INR 1.4 Cr in the same period of previous fiscal year. 

However, according to a report by India Ratings & Research (Ind-Ra), the NBFC arm expects to return to profitability in the second quarter of FY26 as it continues to strengthen asset quality and expand secured lending.

In Q1 FY26, Indifi Capital’s credit cost dropped to 3.5% of assets under management (AUM) from 5% in Q1 FY25. It stood at 6.5% in FY25.

Meanwhile, the NBFC’s gross non-performing assets (GNPA) rose to 4.6% at the end of Q1 FY26 from 3.7% a year ago. GNPA stood at 4.4% in FY25 and 2.9% in FY24. 

“It’s actually a positive signal. Two years ago, less than 10% of our portfolio was covered under credit guarantees; now, over 40% is covered. This lowers our risk exposure but keeps such accounts in the GNPA pool longer since they can’t be written off immediately,” said Alok Mittal, founder and CEO of Indifi.

The NBFC’s AUM stood at INR 1,982 Cr at the end of June 2025, down 10% from INR 2,207.6 Cr in Q1 FY25. Mittal attributed this decline to the lending arm’s focus on improving portfolio quality.

Founded in 2015 by Mittal, Siddharth Mahanot, and Sundeep Sahi, Indifi Technologies provides digital loans to MSMEs. The startup claims to use a tech-driven approach to assess creditworthiness through various data sources to simplify and digitise the loan process. 

Mittal told Inc42 that instead of relying solely on traditional financial statements, the startup analyses digital transaction data from ecosystem partners such as Amazon, Zomato, or payment platforms like BharatPe and PhonePe.

It also reviews bank account activity and GST filings to understand cash flows and business health. These data streams are often accessed through the account aggregator framework, allowing Indifi Technologies to build a comprehensive risk profile without requiring full accounting books, especially for loans below INR 25 Lakh. 

On a consolidated basis, Indifi Technologies recorded a 22% YoY rise in operating revenue to INR 360 Cr in FY25. However it posted a net loss of INR 45 Cr, largely due to higher provisioning and the transition from IGAAP to IND-AS accounting standards. 

Focus On New Products

Speaking about the startup’s product diversification strategy, Mittal said Indifi Technologies still remains focussed on addressing credit gaps for underserved MSMEs, a segment where nearly 85% still lack access to formal financing.

“Even though we had our share of losses during this credit cycle, our performance relative to peers was better, which gives us confidence that we’re heading in the right direction,” Mittal said.

He added that Indifi’s product expansion is guided by customer needs and risk calibration. “About two years ago, we launched working capital loans for startups, filling a gap between venture debt and equity. That product now serves a few hundred startups. A year ago, we rolled out supply chain finance for manufacturers and distributors, and around 10,000 of our 60,000 active customers are already using it,” he said.

The company also entered the secured lending segment six months ago for the same MSME base it serves through unsecured loans. “Of our INR 2,000 Cr AUM, we estimate our customers hold another INR 2,000 Cr worth of land. This allows us to offer collateral-backed loans at lower rates,” Mittal explained.

Currently, these new products account for about 10% of Indifi Technologies’ total business.

Indifi Technologies competes with the likes of Lendingkart, FlexiLoans, Yubi Loans, among others.