Capital Float, Lendingkart see higher write-offs, loss

BENGALURU: Lending startups Capital Float and Lendingkart both recorded significantly higher write offs and bigger losses in financial year 2017-18, although business expansions helped revenues surge around 150% for the two companies.

Lendingkart wrote off Rs 26.1 crore worth of bad loans in FY18, as against Rs 8.6 crore in the previous year, show regulatory filings sourced from paper.vc. Capital Float wrote off Rs 16 crore worth of bad loans, up from Rs 1.8 crore in FY17.

But while Lendingkart lowered its provisioning for non-performing assets, or bad loans, to Rs 1.5 crore from Rs 3 crore, Capital Float increased provisioning for NPAs to Rs 18 crore from Rs 3 crore.


“Our bad loans have increased at the same rate as our revenues, which shows this is a result of the rapid expansion of our business,” said Harshvardhan Lunia, chief executive officer of Lendingkart. “For this current (financial) year, we will show a revenue of more than Rs 225 crore and report net profit of Rs 15 crore on our lending business.”

Lendingkart’s revenue jumped nearly 160% from a year ago to Rs 91.8 crore, while Capital Float’s revenue increased 154% to Rs 135 crore.

Explaining Capital Float’s higher provisioning, cofounder Gaurav Hinduja said the company’s provisioning policy was more conservative than the Reserve Bank of India’s requirements.

“Our provision coverage is in excess of 85%. In the last six months, since the close of FY18, we have scaled our assets under management by 50%, led by (small and medium enterprise) finance and our recently launched consumer finance vertical. Over the last financial year, our AUM has increased by 200%,” Hinduja said. Both companies consider NPAs as loans overdue for three or more months.

Hinduja said Capital Float had added three new business lines and invested in building proprietary tech, and its loss and NPAs were “in line with the business segments we operate in. The NPAs in FY17 include losses incurred from our commercial vehicle finance product, which we have since discontinued.”

Capital Float’s FY18 loss increased by 46% to Rs 92 crore, and Lendingkart’s by 33% to Rs 52 crore, which includes a Rs 28 crore loss from its technology and data analytics arm.

For Capital Float, interest income on loans surged to Rs 88 crore from Rs 35 crore in the previous year, while fee income on loans increased to Rs 33.8 crore from Rs 10 crore. Finance costs in terms of interest expense and borrowing costs rose to Rs 52 crore from Rs 18 crore.

Lendingkart’s interest on loans increased to Rs 70.7 crore from Rs 26 crore, while processing fee jumped to Rs 13 crore from Rs 3.8 crore. Finance costs on loans from bank and non-banks rose to Rs 36 crore from Rs 12 crore.