­­­Krazybee Services Private Limited (KSPL) is a Bengaluru-based Systemically Important NBFCND that operates in unsecured lending segment through a digital lending platform, “Kreditbee” owned by a group entity, Finnovation Tech Solutions Private Limited (FTSPL). KSPL is a subsidiary of FPL and has a board of six directors including three independent directors. The company commenced its operations in May 2017 and has leveraged the digital platform to expand its presence across India with Assets Under Management (AUM) of Rs. 2871 Cr. as on June 30, 2023.

­­­Finnov Private Limited (FPL) is a Singapore based company that commenced its operations in May 2016 and is engaged in providing lending and lending platform through its subsidiaries, KSPL and Finnovation Tech Solutions Private Limited (FTSPL) respectively. FPL is promoted by Mr. Madhusudhan Ekambaram, Mr. Karthikeyan Krishnaswamy, and Mr. Vivek Veda who are part of the board that also comprises four shareholder directors. FPL is backed by marquee investors like Premji Invest, Motilal Oswal, Mirae Asset and ICICI Bank Bahrain and has raised approximately USD 190 million (primary and secondary) through multiple rounds of equity infusion till FY21. Further, in FY23, the company did a capital raise round of Rs. 1288 Cr from existing and new investors namely Advent International and MUFG Bank.

­­­KSPL belongs to the NBFC sector which continues to complement the efforts of banks in enhancing small ticket retail lending in India. Some of the material governance issues for the financial services sector are policies and practices with regard to business ethics, board diversity and independence, compensation structure for board and KMPs, role of the audit committee and shareholders’ rights. On the social aspect, some of the critical issues for the sector are the contributions to financial inclusion and community development, responsible financing including environmentally friendly projects and policies around data privacy. The industry, by nature has a low exposure to environmental risks. The entity has made adequate disclosures regarding its policies on related party transactions, vigil mechanism and whistle blowing. It also adheres to Reserve Bank of India’s Fair Practices Code and has the necessary interest rate and grievance redressal policies. The board of directors consist of 3 independent directors out of a total of 6 directors. All the three members of the Audit Committee are NonExecutive Directors with majority of them being Independent Directors. KSPL does not, however have a woman director on its board. In accordance with the guidelines issued by RBI, the entity has constituted a Risk Management Committee that is responsible for identification, evaluation and mitigation of operational, strategic and external environment risks. Further, KSPL has also constituted an IT strategy committee to ensure adequate control over issues like cyber security and data privacy. KSPL provides personal loan, salary advance loan with a focus on the young working class of India. KSPL aims at making credit highly accessible to the salaried and self-employed segment through adoptionof technology. Till date, KSPL has upgraded more than 1 million customers from NTC (New to Credit) to a bureau score, thereby making them bankable customers. KSPL supports community development through CSR projects mainly aimed at promotion of education, eradication of hunger, environmental sustainability, protection of national heritage and culture among other causes.

­­­KSPL is subject to covenants stipulated by its lenders/investors in respect of various parameters like capital structure, asset quality among others.

­­­KSPL’s liquidity profile as on June 30, 2023 is well matched with no negative cumulative mismatches up to across all time buckets. As on June 30, 2023, cash and liquid investments for the company at a consolidated level stood at Rs. 689 Cr.

­­Acuité believes that FPL will maintain ‘Stable’ outlook over the near to medium term on account of healthy capital position and support from marquee investors. The outlook may be revised to ‘Positive’ in case FPL demonstrates significant and sustainable growth in its scale of operations while mitigating asset quality risks in portfolio. Conversely, the outlook may be revised to ‘Negative’ in case of any challenges in scaling up operations or in case of any sharp deterioration in asset quality and profitability levels.

­­­Infomerics Ratings, vide its press release dated August 16, 2021 had denoted the rating to Krazybee Services Private Limited (KSPL) as 'IVR BB+; Issuer Not Cooperating' on account of lack of adequate information required for monitoring of ratings.

­­­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.