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| Product | Quantum (Rs. Cr) | Long Term Rating | Short Term Rating |
| Commercial Paper (CP) | 40.00 | - | ACUITE A3+ | Reaffirmed | Rating Watch with Developing Implications |
| Total Outstanding | 40.00 | - | - |
| Total Withdrawn | 0.00 | - | - |
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Rating Rationale |
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Acuité has reaffirmed the short-term rating of ‘ACUITE A3+' (read as ACUITE A three plus) on the Rs 40 Cr. proposed commercial paper program of Finwizard Technology Private Limited (Fisdom). The rating is now under watch with developing Implications.
Rationale for the rating: The rating watch with developing implications is on account of SEBI’s issuance of a show cause notice (SCN) to FTPL, concerning its association with the algorithmic trading platform managed by Tradetron Inc. and the ramifications of this notice are currently indeterminate. Acuite will engage with FTPL and meticulously monitor the progression of the SCN. The rating continues to derive strength from extensive experience of the promoters having over two decades of experience in various fields including Fintech, Digital payments and Consulting space.The rating further takes into consideration the innovative product/service offerings by Finwizard Technology Private Limited (Fisdom) which offers a suit of financial products and services including broking, tax filing services and mutual fund, insurance and other wealth management products. These offerings are made available through application programming language (API) based technological solutions. Fisdom has partnered with various banks to offer digital financial solutions and other value added services. The rating further derive strength from resourceful investor base which have been supporting the Group with capital infusion at regular intervals. The Group has received capital infusions of Rs 357.92 Cr. since its inception. Fisdom’s investors comprises PayU Fintech Investments, Accion Frontier, Avid park India, Saama Capital, Alteria Capital, Quona Capital, and other Angel Investors.The rating is however constrained by the Group’s continued losses at consolidated levels on account of high opex levels. However the Group reported PBT of Rs.0.49 Cr. as on Q1FY25 compared to the losses of Rs. 14.65 Cr. in Q1FY24. The rating also takes into consideration the evolving landscape of the fintech and digital space which requires continuous focus and investment towards product development to sustain the competition. Accordingly, Fisdom is susceptible to competition from domestic as well as international IT service companies which can have bearing on the growth trajectory and earning profile in coming years. Acuité believes the ability of the Group to profitably scale up its portfolio while maintaining robustness of its technology platform/ security given the evolving nature of fintech model is also a monitorable. |
| About the Company |
| Bangalore based, Finwizard Technology Private Limited was incorporated in 2015. The company runs by the brand Fisdom.Fisdom provides the use of a payment gateway to process mutual fund transactions on the BSE platform and digitise Pension funds (NPS). Over the years, they’ve added insurance, taxfiling, and stock broking. Recently, they also added an HNI wealth management business to serve the mass-affluent and affluent segment of customers.Subramanya Venkat Sumukh is the CEO and co-founder of Fisdom and Anand Dalmia is currently co-founder and CBO of Fisdom. |
| About the Group |
| Finwizard Technology Private Limited (Fisdom) is the flagship Company of Fisdom Group. The Group is engaged in providing various digital financial services and products through its group companies Winiin Taxscope Pvt Ltd, Finwizard Technology Services Pvt Ltd and Finwizard Insurance Broking Pvt Ltd. |
| Unsupported Rating |
| Not Applicable |
| Analytical Approach |
| Extent of Consolidation |
| •Full Consolidation |
| Rationale for Consolidation or Parent / Group / Govt. Support |
| Acuité has taken a consolidated view on Finwizard Technology Private Limited (Fisdom) and its subsidiaries namely Winiin Taxscope Pvt Ltd, Finwizard Technology Services Pvt Ltd, Finwizard Insurance Broking Pvt Ltd. The consolidation is in view of the shared brand, common managerial team along with strong operational and financial synergies among the group companies.
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| Key Rating Drivers |
| Strength |
| Experienced promoter and support from resourceful investors:
Incorporated in 2015, Fisdom Group, was co-founded by Mr. Subramanya Venkat Sumukh and Mr. Anand Dalmia. Mr. Sumukh (CEO & WTD) was a partner at Bessemer Venture Partners (BVP), a global venture capital firm and Managing Director of India operations, prior to joining Fisdom. He has also served on the boards of TaxiForSure (acquired by Ola), Matrimony.com, Snapdeal, Nephroplus amongst others. Mr. Anand Dalmia (CBO & WTD) currently leads the business development efforts at Fisdom. He has more than a decade of experience in the investment banking space and has worked for firms like Macquarie, UBS and Avendus. Mr. Dalmia has worked on several transactions in M&A,Private Equity Syndication, Equity Capital Markets and Debt Financing and was also involved in investment banking business in the technology space in India. The founders and management (holds 34 percent shareholding as on March 31,2024) has been able to bring on board institutional investors like PayU Fintech Investments (29.90 percentshareholding), Saama Capital (11.90 percent shareholding), Accion Frontier (13.20 percent shareholding) and others (11 percent as on March 31,2024). The founders/promotors experience in tech-driven companies will aid Fisdom in achieving its objective of providing financial digital services and products to mass and massaffluent households in Tier 2 cities and beyond. PayU, Accion Frontier and Saama Capital have board representation and Fisdom Group benefits from their expertise. Fisdom has been able to obtain funding from these investors and other angel investors to the tune of Rs 357.92 Cr. through compulsory convertible cumulative preference capital through various rounds of funding since 2016. Acuité believes that the company’s growth prospects will be supported by the promoter’s extensive experience in the industry fortified by support from investors. Innovative product offering with tie up with partners Fisdom offers a suit of financial products and services including broking, tax filing services and mutual fund, insurance and other wealth management products. These offerings are made available through application programming language (API) based technological solutions. Fisdom has partnered with various banks to offer digital financial solutions and other value added services. These product offerings cater the business-to-business-to-customer (‘B2B2C’) segment and the ‘B2B’ segment. The company benefits from an ecosystem-based approach across fintech which enables them to cross-sell products and services in partnership with other players in the operating ecosystems. This integrated product offering along with the experience of the management has helped the company to onboard banking partners. |
| Weakness |
| Weak Financial risk profile; albeit improving
Fisdom group has weak financial risk profile as characterized by losses made. On a consolidated level, Fisdom reported losses of Rs.57.41 Cr. for FY2024(Prov.) as compared to losses of Rs. 70.52 Cr. in FY2023. The Group reported a PBT of Rs. 0.49 Cr. as on Q1FY25 as compared to losses made of Rs. 14.65 Cr. in Q1FY24. The Group would be able to cut down its losses once it is able to achieve volumes in various product offerings and broking business. The Group’s networth currently is being supported by capital infusion by investors which is also aiding them to scale up their operations. Acuité believes, that moderate scale of operations coupled with weak financial risk profile will continue to weigh on the company’s credit profile over the near to medium term. Highly competitive nature of the IT industry The global IT services industry is dominated by several large players and small niche technology players. Fisdom is susceptible to competition from domestic as well as international IT service companies which can have margin pressure. The industry is highly technology oriented which keeps on changing time to time. Thus, the Group has to keep upgrading the services it offers according to the needs of the clients and changes in the industry. However, the established relationship with clients and vendors, diversified sectorial presence and experienced management mitigates the risk to some extent. Further, the ability of the Group to manage industry specific risks such as wage inflation and employee attrition levels determine the Groups ability to sustain its business risk profile and will remain a key rating sensitivity. Besides, competition, Fisdom will be susceptible to any changes in the regulatory framework as well. Acuité believes, that moderate 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 |
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| Liquidity Position |
| Adequate |
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Liquidity of the company is adequate as the company has no near term debt obligation. The company has maintained cash and bank balances and bank deposits of Rs. 20.98 Cr. as on March 31,2024(Provisionals).
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| Outlook:Not Applicable |
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| Other Factors affecting Rating |
| None |
| Key Financials - Standalone / Originator | ||||||||||||||||||||||||||||||||||||||||
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| Key Financials (Consolidated) | ||||||||||||||||||||||||||||||||||||||||
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| Status of non-cooperation with previous CRA (if applicable) |
| Not Applicable |
| Any Other Information |
| None |
| Applicable Criteria |
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• Service Sector: https://www.acuite.in/view-rating-criteria-50.htm • Default Recognition: https://www.acuite.in/view-rating-criteria-52.htm • Application Of Financial Ratios And Adjustments: https://www.acuite.in/view-rating-criteria-53.htm • Consolidation Of Companies: https://www.acuite.in/view-rating-criteria-60.htm • Commercial Paper: https://www.acuite.in/view-rating-criteria-54.htm |
| Note on complexity levels of the rated instrument |
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| *Annexure 2 - List of Entities (applicable for Consolidation or Parent / Group / Govt. Support) | ||||||||||
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