As the Reserve Bank of India (RBI) tightens regulations on the peer-to-peer (P2P) lending sector, with the effects expected to be felt in FY25 and FY26, LiquiLoans, a leading player in the space, has achieved 3.4x growth for the fiscal year ending March 2024. LiquiLoans digital revenues from operations have surged into the arena of '^695.63 crore which is more in FY24 as against '^203.43 crore in FY23 according to financial filings that the group made with the Registrar of Companies (RoC).
LiquiLoans is a peer-to-peer money lending platform that gives personal loans, consumer loans, and deposit financing. Portfolio exposure is limited to 0.5% per each borrower to allow for a high diversification within the platform. Following all this, LiquiLoans has gotten an additional Rs 10 crore from income on interest which brings its income during FY24 to Rs 706 crores. The major portion of expenses included in service fee costs had an increase of four times from Rs 140 crore in the financial year 2023 to Rs 578.57 crore in the financial year 2024.
Commission payouts increased by 88% to Rs 64.72 crores, and employment benefit costs went up 2.5 times to Rs 40.80 crores. Overall, LiquiLoans' total expenses surged by Rs 704.59 crores, which is 3.3 times higher than Rs 212.94 crores recorded in FY 2023.
This sharp rise in expenses had an 88% impact on the profit which fell down from Rs 5.70 crores in FY23 to Rs 71 lakh in FY24. The company's ROCE and EBITDA margin were 1.11% and 0.35%, respectively. On a per-unit basis, LiquiLoans spent Rs 1.01 to generate each rupee of operating revenue in the last fiscal year.
The Mumbai-based company reported cash and bank balances of Rs 33 lakh and current assets totaling Rs 283 crore in FY24. According to TheKredible, LiquiLoans has raised $15 million to date, with Matrix Partners and CRED serving as its lead investors.
LiquiLoans has earned a solid reputation in the industry, with market feedback highlighting some of the lowest non-performing loans in its portfolio. As the backend provider for several leading players, the company has focused on catering to the higher credit score segment, further minimizing risk. This strategy has resulted in narrower margins, as safer returns tend to offer less profitability. Therefore, margin expansion will require a closer look at managing costs. With regulators targeting short-term players, LiquiLoans is well-positioned for strong growth in the vanilla personal loan market, while also exploring future opportunities with other products as it builds its own database of high-quality borrowers.
