Fusion Finance Ltd operates as a systemically important non-deposit Non-Banking Financial Company (NBFC) primarily engaged in microfinance lending activities. The company provides Joint Liability Group (JLG) loans to female members organized in groups of 5-7 members, backed by mutual guarantees. Its core mission is to provide financial services to poor women in India in rural and semi-urban areas.
The company offers loan tenures ranging from 17 to 25 months with repayments occurring every 14 or 28 days at interest rates between 19.15% and 23.40% on a reducing balance basis. Beyond its core microfinance business, Fusion has also ventured into MSME lending and offers loans for productivity-enhancing items like mobile phones and bicycles, leveraging its distribution channel to deliver additional financial products and services. Its product portfolio includes income generation, top-up, emergency, and cross-sell loans, as well as unsecured and secured business loans, and machinery loans to micro, small, and medium-sized enterprises.
Fusion Finance Limited was originally incorporated as Ambience Fincap Private Limited on September 5, 1994, in New Delhi, India. The company's name changed to Fusion Micro Finance Private Limited in April 2010. It was further converted to a Public Limited Company on July 20, 2021, and subsequently renamed Fusion Micro Finance Limited. Effective July 09, 2024, the company's name was changed to Fusion Finance Limited from Fusion Micro Finance Limited, reflecting its evolution in the financial services landscape.
Fusion Finance currently has a market capitalization of ₹2,896 crores (as of the most recent mentioned period, April/May 2025), which represents a decline of 53.1% over the past year. The company reported revenue of ₹2,320 crores but recorded a loss of ₹1,225 crores in the most recent financial period, indicating a challenging financial position.
For Q4 FY25, Fusion Finance reported a net loss of ₹165 crores, attributed to increased provisions for bad loans. The net interest margin fell to 8.57%, and net interest income decreased by 22% year-on-year, reflecting reduced business volume. The company's trailing twelve months (TTM) profit after tax was negative at ₹927 crores.
In Q2 FY25, Fusion Finance reported total income up 23% to ₹704 crores, with net interest income (NII) increasing 30% to ₹397 crores and pre-provision operating profit (PPOP) at ₹284 crores. However, the company recorded a loss of ₹305 crores due to higher provisioning. Assets Under Management (AUM) grew 15% to ₹11,571 crores, with Capital to Risk Assets Ratio (CRAR) at 24.39%.
- Market Capitalization: ₹2,896 crores (as of April/May 2025)
- Promoter Holding: 55.21% (as of May 2025), down from 57.71% in September 2024.
- Revenue (most recent reported): ₹2,320 crores
- Profit/Loss (most recent reported): Loss of ₹1,225 crores
- Q4 FY25 Net Loss: ₹165 crores (due to increased provisions)
- Q4 FY25 Net Interest Margin: 8.57%
- Q4 FY25 Net Interest Income: Decreased by 22% YoY
- TTM Profit After Tax: Negative ₹927 crores
- Q2 FY25 Total Income: ₹704 crores (+23%)
- Q2 FY25 Net Interest Income (NII): ₹397 crores (+30%)
- Q2 FY25 Pre-Provision Operating Profit (PPOP): ₹284 crores
- Q2 FY25 Loss: ₹305 crores (due to higher provisioning)
- Assets Under Management (AUM): ₹11,571 crores (+15%)
- Capital to Risk Assets Ratio (CRAR): 24.39%
- Return on Equity (last 3 years): -4.99%
- Price-to-Book (P/B) ratio: 0.89 times (as of April 15, 2025)
Promoter holding in Fusion Finance has decreased over the last quarter by 2.50%, bringing the current promoter holding to 55.21% as of May 2025, down from 57.71% as of September 2024. This reduction indicates some stake dilution among the founding stakeholders.
Recent corporate developments include the appointment of a Chief Credit Officer and the resignation of the Chief Financial Officer (CFO) with an interim CFO appointment effective June 26, 2025. The company also granted 100,000 Employee Stock Option Plans (ESOPs) at ₹195.73 each under the Fusion ESOP 2023 plan on June 12, 2025.
The company currently exhibits a low interest coverage ratio and has shown a low return on equity of -4.99% over the last 3 years. On a positive note, the company has reduced its debt levels. The Price-to-Book (P/B) ratio of Fusion Finance is 0.89 times as of April 15, 2025, representing a 1% premium to its peers' median range of 0.88 times.
The stock has experienced significant volatility, with the share price moving down by 61.20% over the last 12 months on BSE. Since the company's trailing twelve months earnings are negative, the Price-to-Earnings (P/E) ratio is not available for calculation, reflecting the challenging financial position the company currently faces.
According to technical analysis, these stocks are considered of poor quality but have mid-range financials and valuations. While their performance may improve based on financials, caution is advised before considering investment in these stocks.
Despite current financial challenges, Fusion Finance's established presence in the competitive microfinance sector, serving a crucial market segment of women entrepreneurs in rural and semi-urban areas of India, positions it as a significant player in India's evolving financial services landscape.
