Press Release July 21, 2025 BHALA FINANCE PRIVATE LIMITED Rating Assigned

Product	Quantum (Rs. Cr)	Long Term Rating	Short Term Rating
Bank Loan Ratings	40.00	ACUITE BBB- | Stable | Assigned	-
Total Outstanding	40.00	-	-
Total Withdrawn	0.00	-	-

Rating Rationale

­Acuité has assigned the long term rating of ‘ACUITE BBB-’ (read as ACUITE triple B minus) to the Rs. 40.00 Cr. Proposed Bank Loan Facilities  of Bhala Finance Private Limited (BFPL). The outlook is 'Stable'. Rationale for the Rating The rating assigned factors in the growth in financial performance, disbursements and AUM growth, and adequate capitalisation of Bhala Finance Private Limited. The company's financial performance has shown improvements with a Profit After Tax (PAT) which has increased from Rs 0.21 crore in FY 22 to Rs 3.56 crore in FY 25. The interest income has also seen substantial increase from Rs 3.15 crore in FY 22  to Rs 26.27 crore to FY25. The Assets Under Management (AUM) of the company expanded from Rs. 33.33 Cr. in FY22 to Rs. 166.18 Cr. in FY25 while loan disbursements grew from Rs. 20.86 Cr. in FY2022 to Rs. 102.65 Cr. in FY2025. BFPL has received consistent equity infusions from the promoter to support its growth initiatives, with an additional capital infusion anticipated in FY 26. However, the rating is constrained by  geographical concentration in the loan book, which remains primarily focused in Rajasthan. Apart from this aspect the asset quality indicated by GNPA (120 DPD NPA) has declined and stood at 1.50% and NNPA at 0.86% in FY 25; these were at 1.42% and 0.71% in FY 24. The total debt of the company has also increased from Rs 80.61 Cr. in FY 24 to Rs. 138.35 Cr. in FY 25. Going forward, Acuite believes the company's ability to maintain asset quality, and scaling operations profitably would be key monitorables.

About the company

­Jaipur, Rajasthan based, Bhala Finance Private Limited was incorporated in 2015. Mr. Ramakant Bhala, Mrs. Nikita Saboo, Mr. Harsh Bhala, Mrs. Snhe Lata Bhala are directors of the company. The company provides mortgage loans on residential, commercial properties, business loans, vehicle loans. The company’s main aim is to cater to the diverse financial needs of retail and corporate businesses in tier 2 and tier 3 cities. The company operates from more than 30 locations in Rajasthan and Madhya Pradesh.

Unsupported Rating

­Not Applicable

Analytical Approach

­Acuité has considered the standalone business and financial risk profile of Bhala Finance Private Limited to arrive at the rating.

Key Rating Drivers

Strength

Steady financial performance The company has demonstrated significant financial growth with the PAT increasing from Rs. 0.21 crore in FY 22 to Rs. 3.56 crore in FY 25. Furthermore, the interest income also saw an increase, growing from Rs. 3.15 crore to Rs. 26.27 crore over the same period. Additionally, the company's on book AUM expanded markedly from Rs. 33.33 Cr. in FY22 to Rs. 161.19 Cr. in FY25, the AUM stood at Rs. 166.18 Cr. ( Inclusive of off book DA transaction which commenced in FY25). Disbursement growth followed a similar upward trend, increasing from Rs. 20.86 Cr. in FY 22 to Rs.102.65 Cr. in FY 25.  Adequate Capitalisation and borrowing profile The company's Capital Adequacy Ratio (CAR) stood at 26.74% in FY 25 as against 36.39% for FY 24. BFPL has regular capital infusions done by the promoter. There have been regular capital infusions by the promoter over the last few years and further capital infusions by the promoter are expected to continue, likely boosting the CAR further in FY26. The net worth of the company has increased from Rs 26.15 Cr. in FY 24 to Rs. 40.67 Cr. in FY 25. The borrowing profile of the company is well diversified, comprising of Non-Convertible debentures (NCDs), bank loans from public sector banks, NBFCs and private banks as well. The total debt for the company for FY 25 rose to Rs. 138.35 Cr. from Rs. 80.61 Cr. in FY 24 and Rs. 23.08 Cr. in FY 22.

Weakness

Moderate Asset Quality The company has an average overall collection efficiency of 89.80% for FY 25, the asset quality of the company marked by the GNPA stood at 1.50% with 120 DPD NPA policy and NNPA at 0.86%. With a 90 DPD stands at 1.86% for FY 25. The GNPA and NNPA has increased from FY 24 levels at 1.42% and 0.71% respectively. The NPA is mainly coming from the state of Rajasthan. Although the slippages have increased in the softer buckets 1+dpd upto 90 dpd from FY 22 to FY 25, from 2.1% to 3.00% of the AUM in FY 25. Modest scale of operations coupled with geographic concentration risk The company has modest scale of operations with an outstanding loan portfolio of Rs. 161.19 Cr. as on March 31, 2025, as compared to Rs. 102.18 Cr. as on March 31, 2024.  BFPL’s portfolio is exposed to high geographical concentration risk, as 98.24 per cent of the total portfolio is concentrated in only state of Rajasthan. However, BFPL has expanded to Madhya Pradesh and plans to expand in the state of Gujarat to somewhat mitigate the geographic concentration risk. The company has a branch network of 30 branches spread across 22 districts.  Generally, the risk profile of an NBFC with a geographically diversified portfolio is more resilient compared to that of entity with a geographically concentrated portfolio. Acuité believes that modest scale of operations coupled with geographic concentration in its portfolio will continue to weigh on the company’s credit profile over the near to medium term.

Rating Sensitivity

­Movement in collection efficiency and asset quality Movement in liquidity buffers Movement in profitability parameters Changes in regulatory environment

Liquidity Position

Adequate

­Bhala Finance Private Limited has adequate liquidity. As on March 31, 2025, the unutilised bank limits stood at Rs 24.12 Cr. and the cash & bank balances and liquid MFs stood at Rs 20.06 Cr. Furthermore, the company reported no cumulative negative mismatches in the ALM profile as on March 31, 2025.

Outlook: Stable

­

Other Factors affecting Rating

­None

Key Financials - Standalone / Originator

­ Particulars Unit FY25 (Actual) FY24(Actual) Total Assets** Rs. Cr. 185.52 111.59 Total Income* Rs. Cr. 12.85 7.61 PAT Rs. Cr. 3.56 2.06 Net Worth Rs. Cr. 40.67 26.15 Return on Average Assets (RoAA) (%) 2.40 2.49 Return on Average Net Worth (RoNW) (%) 10.66 10.76 Debt/Equity Times 3.40 3.08 Gross NPA (120 DPD) (%) 1.50 1.42 Net NPA (120 DPD) (%) 0.86 0.71 *Total income equals to Net Interest Income plus other income ** Total Assets have been adjusted for deferred tax assets ***Ratios are as per Acuite's calculations

Status of non-cooperation with previous CRA (if applicable):

­None

Any other information

­None

Applicable Criteria

• Application Of Financial Ratios And Adjustments: https://www.acuite.in/view-rating-criteria-53.htm • Default Recognition: https://www.acuite.in/view-rating-criteria-52.htm • Non-Banking Financing Entities: https://www.acuite.in/view-rating-criteria-44.htm

Note on complexity levels of the rated instrument

­In order to inform the investors about complexity of instruments, Acuité has categorized such instruments in three levels: Simple, Complex and Highly Complex. Acuite’s categorisation of the instruments across the three categories is based on factors like variability of the returns to the investors, uncertainty in cash flow patterns, number of counterparties and general understanding of the instrument by the market. It has to be understood that complexity is different from credit risk and even an instrument categorized as 'Simple' can carry high levels of risk. For more details, please refer Rating Criteria “Complexity Level Of Financial Instruments” on www.acuite.in.

Rating History :

­Not Applicable

Annexure - Details of instruments rated

Lender’s Name ISIN Facilities Date Of Issuance Coupon Rate Maturity Date Quantum (Rs. Cr.) Complexity Level Rating Not Applicable Not avl. / Not appl. Proposed Long Term Bank Facility Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 40.00 Simple ACUITE BBB- | Stable | Assigned

Contacts

Mohit Jain Chief Analytical Officer - Rating Operations Nattasha Venkatesh Associate Analyst - Rating Operations	Contact details exclusively for investors and lenders Mob: +91 8591310146 Email ID: analyticalsupport@acuite.in

About Acuité Ratings & Research

­Acuité is a full-service Credit Rating Agency registered with the Securities & Exchange Board of India (SEBI). The company received RBI Accreditation as an External Credit Assessment Institution (ECAI) for Bank Loan Ratings under BASEL-II norms in the year 2012. Acuité has assigned ratings to various securities, debt instruments and bank facilities of entities spread across the country and across a wide cross section of industries. It has its Registered and Head Office in Kanjurmarg, Mumbai. Disclaimer: An Acuité rating does not constitute an audit of the rated entity and should not be treated as a recommendation or opinion that is intended to substitute for a financial adviser's or investor's independent assessment of whether to buy, sell or hold any security. Ratings assigned by Acuité are based on the data and information provided by the issuer and obtained from other reliable sources. Although reasonable care has been taken to ensure that the data and information is true, Acuité, in particular, makes no representation or warranty, expressed or implied with respect to the adequacy, accuracy or completeness of the information relied upon. Acuité is not responsible for any errors or omissions and especially states that it has no financial liability whatsoever for any direct, indirect or consequential loss of any kind, arising from the use of its ratings. Ratings assigned by Acuité are subject to a process of surveillance which may lead to a revision in ratings as and when the circumstances so warrant. Please visit our website (www.acuite.in) for the latest information on any instrument rated by Acuité. Please visit https://www.acuite.in/faqs.htm to refer FAQs on Credit Rating. Note: None of the Directors on the Board of Acuité Ratings & Research Limited are members of any rating committee and therefore do not participate in discussions regarding the rating of any entity.