NPCI’s FY25 Profit Zooms 42% To INR 1,552 Cr

The National Payments Corporation of India (NPCI) reported a 42% increase in its profit after tax (PAT) to INR 1,552 Cr in the year ending March 2025 from INR 1,095 Cr in the previous year.

The payments body’s operating revenue rose 19% to INR 3,270 Cr during the year under review from INR 2,749 Cr in FY24, according to credit rating agency ICRA.

The reason behind the rise in NPCI’s profit was the improvement in its PAT margin, which rose to 47.5% in FY25 from 39.8% last year. However, its operating margin dropped slightly to 48.7% in FY25 from 53.1% in FY24, the rating agency said.

As NPCI is a non-profit organisation, it uses the word ‘surplus’ instead of profit. Thus, PAT is denoted as surplus after tax. 

Notably, NPCI remains debt-free, with no borrowings as of March 31, 2025. Its net worth increased to INR 6,412 Cr from internal accruals. The company also held INR 2,288 Cr in cash and cash equivalents.

NPCI’s transaction volumes rose 33% YoY to 21,360 Cr in FY25, driven by growth across all products, including UPI, RuPay, NACH, and CTS. NPCI earns fees based on settlement volumes across these products.

Its total Settlement Guarantee Fund (SGF), used to back settlement risk, stood at INR 17,892 Cr, which includes INR 2,695 Cr for Bharat Bill Payment System (BBPS).

As of May 2025, NPCI has 65 shareholders, including public and private sector banks, foreign banks, and co-operative banks. It operates as a not-for-profit entity and is classified as a System Wide Important Payment System (SWIPS) by the RBI.

ICRA reaffirmed NPCI’s credit rating at A1+ and increased the rated bank facility amount from INR 12,500 Cr to INR 15,000 Cr. 

Can NPCI Be Replaced?

ICRA said that despite the strong financials, NPCI’s revenue is dependent on digital transaction volumes, which are influenced by macroeconomic factors and regulatory decisions. 

There is also a small risk of a new competitor impacting NPCI’s top and bottom lines. “While NPCI currently benefits from being the only key player for the clearing and settlement of transactions in multiple retail service segments in India, there is no regulatory restriction on the entry of a new player. The entry of new players in any of the segments where NPCI is currently operating could impact its market share and/or profitability,” ICRA said. 

However, the credit rating agency also noted that it would take a significant amount of time for a new player to get the share of the pie. “Regulatory approvals for operating in each segment, the proprietary nature of the dealing systems and the well-established IT and risk management systems of the company further provides it with competitive advantage,” it added.

Notably, the RBI had called for proposals in 2019 under New Umbrella Entity (NUE) framework to establish alternative entities for managing retail payment systems like UPI, aiming to reduce reliance on the NPCI and promote competition. However, the NUE project was later shelved by the central bank due to a lack of innovative proposals from applicants.