Finance Buddha's Public Market Debut: A 13-Year Bootstrapped Journey
The financial services platform Finance Buddha is making a significant move into the public markets. Its Initial Public Offering (IPO) on the NSE Emerge platform, dedicated to small and medium enterprises, is currently open for subscription and will close on 10 November. This marks a pivotal moment for the bootstrapped fintech, which is leveraging its unique loan distribution and agent network model.
IPO Details and Strong Investor Interest
The public issue comprises a fresh issue of shares worth ₹71.68 crore, priced in the band of ₹140 to ₹142 per share. The offering, which opened on 6 November, has already witnessed robust demand, being subscribed over 1.21 times by the end of the second day. Prior to the public opening, the anchor portion on 4 November was subscribed 1.6 times, raising ₹20.4 crore from a mix of domestic and foreign institutions.
Notable investors in the anchor round included Ashish Kacholia (through Bengal Finance & Investment), who was the largest investor with a commitment of ₹7.17 crore. Bandhan Mutual Fund, via its Small Cap Fund, invested ₹6.17 crore. Together, these two lead investors accounted for two-thirds of the total anchor amount raised.
The Finance Buddha Business Model and Growth Strategy
Founded in 2012 by Vivek Bhatia, Parth Pande, and Parag Agarwal, Finance Buddha acts as a bridge between borrowers and lenders. It connects customers, often those who find it difficult to secure loans from traditional banks and NBFCs, with over 150 partnered lenders. The company earns a commission on every successful loan disbursal.
Co-founder Parth Pande explained the company's rationale, stating that traditional lending rules are often too rigid. "They are built with certain biases but over a period of time, customer profiles have evolved, job natures have changed," he said, adding that the current "underwriting template rejects more than it approves."
The business is predominantly driven by its network of over 2,500 agents, which contributes about 85% of its turnover. The remaining 15% comes from its digital platform. The company plans to use the IPO proceeds to upgrade its technology, expand this agent network, and deepen its presence in emerging markets.
Pande describes the model as "very asset-light," with the only significant capital expense being the gap in the payment cycle. Currently, 75% of revenue comes from personal loan distribution, while 20% is from small business loans. The strategy is to diversify by introducing new products like gold and home loans, aiming to reduce the share of personal loans to 55-60% over time.
Financial Performance and Future Outlook
According to its IPO filings, Finance Buddha reported a total income of ₹223 crore and a profit after tax of ₹8.5 crore for FY25. The company maintained a healthy EBITDA margin of 6.7%. Beyond lending, the fintech giant has ambitious plans to monetize its vast database by venturing into insurance and non-financial consumer solutions like white goods, automobiles, and travel.
"There is a massive data analytics play here, in being able to create a bunch of signals which go beyond credit underwriting and the financial ecosystem," Pande noted, emphasizing the continued importance of the agent network in this expansion. The company, which counts MS Dhoni and The Chennai Angels' member Shakar V as investors, is poised for its next phase of growth following its successful market debut.
