Finbud Financial IPO Analysis

Finbud Financial Services, also known as Finance Buddha, is making waves ahead of its IPO, with backing from ace investor Ashish Kacholia and the MS Dhoni Family Office. 

Known for bridging the gap between borrowers and lenders through its digital loan platform, Finance Buddha is now ready to take its growth story public. 

Here’s why the Finbud Financial Services IPO is catching investors’ attention.

Industry Overview 

India's financial services sector is undergoing a monumental transformation as it combines the strength of traditional banking with the rapid digitization of fintech innovation. With a resilient and well-regulated banking system and growing digital adoption, financial inclusion in India has reached record levels.

The fintech boom, valued at over US$150 billion, has established India as the world's third-largest fintech ecosystem. As a company like Finbud Financial Services which operates at the intersection of finance and technology, India’s evolving fintech ecosystem presents tremendous growth opportunities and the extremely promising demand from consumers in India for quick, transparent, and technology-enabled financial solutions.

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Finbud Financial Services was originally incorporated on July 9, 2012 as a private limited company in Bengaluru and later converted into a public limited company in 2024. The company operates as a retail loan aggregator and financial-services platform that connects borrowers with lending partners (banks and NBFCs) via a hybrid distribution model combining digital channels and an extensive agent network.

Finbud’s products include personal loans, home loans, business-/working-capital loans for SMEs, and credit-line type offerings, with revenue earned primarily on a commission basis from successful loan disbursements by its lending partners. 

Business Model

Finbud Financial Services runs on a smart, asset-light model; instead of lending money itself, it acts as a bridge between borrowers and financial institutions.

Here’s how it works: when someone needs a loan, Finbud steps in to do the heavy lifting. It gathers offers from various banks and NBFCs, compares them, and helps customers choose the best deal. Finbud then takes care of all the paperwork and coordination, ensuring a smooth experience from start to finish.

Every time a loan gets approved and disbursed through its platform, Finbud earns a commission without taking on any credit risk. It’s a win-win: borrowers get better options, lenders get verified leads, and Finbud grows without tying up its own capital.

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The company is now strategically shifting focus towards secured lending segments like home loans and loans against property (LAP), which carry larger ticket sizes (₹25–30 lakh) and better commission margins.

Customer Volume Growth

Customer acquisition has surged significantly — from 79,930 personal loan customers in FY23 to 1,38,832 in FY25, marking a 74% growth in just two years. 

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The company proposes to utilize the Net Proceeds from the Fresh Issue towards funding the following objects:

• Investment in its NBFC subsidiary (LTCV Credit Private Limited)

• Funding working capital requirements

• Business development and marketing initiatives

• Repayment of certain outstanding borrowings

• General corporate purposes

These objectives reflect Finbud’s focus on expansion, brand building, and financial strengthening as it transitions into a publicly listed entity.

Financial Performance

Finbud Financial Services has shown strong top-line growth, with revenue rising from around ₹135 crore in FY23 to ₹223 crore in FY25 — a 65% jump in just two years. Profit margins have also improved, though still modest, moving from 1.3% to 3.8% as the company scales its operations.

However, borrowings have increased steadily, suggesting higher leverage as part of its expansion phase. ROE saw a spike in FY24 but normalized in FY25, reflecting growth investments and an expanding equity base.

Overall, Finbud’s performance reflects a scaling, asset-light fintech model; growing fast, improving profitability, and positioned for better operating leverage once volumes stabilize and secured lending gains traction.

Promoters Holdings

Before the IPO, the promoters collectively held 87.45% of Finbud Financial Services, which will reduce to around 63% post-issue. 

Adding further credibility to its journey, ace investor Ashish Kacholia and MS Dhoni Family Office are among its key backers, representing a strong vote of confidence in Finbud’s business potential.

Company Strengths and Risks

Strengths:

• It is one of the few major players in this segment

• Asset-light, scalable business model

• Hybrid digital and agent-led distribution network

• Rapid customer and revenue growth

Risks: 

• Low profit margins, highly sensitive to changes in lender commissions

• Some dependence on working capital borrowings

• Rising competition from big digital players like Paisabazaar and Cred

• Post-IPO equity dilution may reduce return ratios

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In comparison to its peers, Finbud Financial Services operates on a smaller scale but demonstrates healthy profitability and reasonable valuations within the fintech lending space. 

With a P/E of 33x, it’s priced more conservatively than larger players like PB Fintech and BLS E-Services, reflecting both its growth potential and early-stage scale. 

As a focused loan aggregator, Finbud’s niche positioning could allow it to grow faster than peers as India’s digital credit ecosystem deepens.

Final Words

At Alpha Venture X Fund, every investment is evaluated through the proprietary LMVT framework — Leadership, Moat, Valuation, and Tailwinds, designed to identify tomorrow’s market leaders today.

Through this lens, Finbud Financial Services stands out as a promising player in India’s fintech lending landscape. Its Leadership team brings deep experience in financial services and technology, backed by credible investors bringing their expertise.

The company’s Moat lies in its hybrid, asset-light loan aggregation model, combining digital reach with on-ground efficiency and enabling rapid scalability with minimal credit risk. 

From a Valuation perspective, Finbud’s pricing appears attractive relative to peers, offering room for upside as profitability improves. 

Finally, strong Tailwinds from India’s booming digital lending ecosystem and rising financial inclusion further strengthen its growth outlook.

Under the LMVT framework, Finbud emerges as a high-potential fintech story— aligning well with Alpha Venture X Fund’s philosophy.

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