Credila Financial Services Limited IPO

The company relies on distribution agents, banks and financial institutions and direct channels (including digital leads and referrals) for the origination of its loans. Any disruption, negligence, fraud or inefficiency in the services provided to the company could adversely affect its business, results of operations, financial condition and cash flows.

51.54% of the company's AUM as of March 31, 2025 is focused on higher education in the United States. The company is exposed to geopolitical, macroeconomic and visa and immigration policy-related risks in such jurisdiction, which could adversely affect its business, results of operations, financial condition and cash flows.

18.84% and 11.99% of its AUM as of March 31, 2025, through the company's overseas student loans business, is largely focused on higher education in the United Kingdom and Canada, respectively. This exposes us to geo-political and macro-economic risks in these geographies, which could adversely affect its business, results of operations and cash flows.

The company requires substantial capital and financing for its business and any disruption in the cost and availability of such capital or financing could have an adverse effect on the company's business, results of operations, financial condition and cash flows.

81.12% of its AUM as of March 31, 2025 was unsecured and susceptible to certain operational and credit risks, which may have an adverse effect on the company's business, results of operations, financial condition and cash flows.

The company's cumulative write-offs from inception until March 31, 2025 aggregated to Rs.96.95 million and as of such date, the company maintained a provision coverage ratio of 65.01%, Gross Stage 3 Loans of 0.19% and Net Stage 3 Loans of 0.07%. Any deterioration in the credit quality of its loans could adversely affect the company's business, results of operations, financial condition and cash flows.

The company depends on the accuracy and completeness of information provided by its borrowers. Any misleading information provided to the company by its borrowers or attempt to defraud the company may affect its assessment of their credit worthiness, which could have an adverse effect on the company's business, results of operations, financial condition and cash flows. The company has encountered an incident of fraud and misrepresentation by borrowers during the Financial Year 2025 and recognized a write-off of ?44.80 million and a provision of ?169.00 million in the company's statement of profit and loss in this regard.

The company is exposed to operational risks, including employee negligence and fraud by employees, agents, borrowers or third parties, which could harm its reputation, business, financial condition, results of operations and cash flows.

The company rely on counsellors and aggregators for the origination of a significant portion of its loans (with 49.41% of disbursements during the Financial Year 2025 being sourced from them). Any disruption, negligence, fraud or inefficiency in the services provided to the company by such counsellors and aggregators could adversely affect its business, results of operations, financial condition and cash flows.

The company has experienced ratings downgrades in the past and any future downgrades in the company's credit ratings may increase interest rates for refinancing its borrowings, which would increase the company's cost of borrowings, and adversely affect its ability to borrow on a competitive basis.