Experienced Management
MFCL, a Maharashtra based NBFC is promoted by Mr. Ananta G. Mohotkar (Chairman). He has more than three decades of experience in the NBFC. He looks after the strategic planning and operations of the company. The Mohotkar Family held around 46.84 percent stake in the company as on March 31, 2025. Mr. Ananta G. Mohotkar is supported at board level by Mrs. Sunita A Mohotkar (Director) is engaged in women empower activities from over two decades, she looks after the operations of SHG segment in MFCL. Mr. Ravindra D. Velankar( Independent Director) is a ex-banker having experience of over four decades and is the chairperson of the audit committee. Mr. Ameya Tambekar (Director) is a chartered account by qualification, he has more than 13 years of experience in BFSI sector, in MFCL he heads the compliance and finance department.
Acuité believes that MFCL will continue to benefit from its established presence and experience of the promoters in the gold loan segment.
Healthy Asset Quality
MFCL’s AUM stood at Rs. 331.57 Cr. as on March 31, 2025 as compared to Rs. 275.24 Cr. as on March 31, 2024. Asset quality has remained healthy marked by on time portfolio at 98.75 percent as on September 30, 2025. On time dpd profile has remained in the range of 89 – 98 percent since FY2020 till YTD. Gross NPA stood at 0.70 percent with NNPA of 0.06 percent as on March 31, 2025 as against GNPA of 0.75 percent with NNPA of 0.08 percent as on March 31, 2024 Further, GNPA stood at 0.65 percent with NNPA at 0.03 percent as on September 30, 2025.
Going forward, as company scales up its business operations in existing and newer geographies, asset quality is a key monitorable.
Shift in lending profile
MFCL commenced its lending operations in 2005. The NBFC is engaged in providing Gold Loan, Two-wheeler loans, LAP and Small Business Loans. As on March 31, 2025 Gold loan is a major part of the AUM. Gold loan comprised ~90 percent of the outstanding portfolio increasing from 43 % in FY 2019. Going forward the company plans to focus on gold loan portfolio which is more secured class of assets in its current offering and plans to grow the gold loan portfolio to 90-95 percent of the total AUM. Increase in outstanding gold loan portfolio would make the portfolio more secure and would reduce the risk of losses. In order to enable speedier expansion, the company has implemented an asset-light franchise model from 2023 for its gold loan portfolio. In this model, the Company will grant franchise of MAG Finserv to qualified partners, preferably to those who have expertise as branch managers, rather than opening own branches and investing in fixed assets and opex for the same. Additionally, MFCL and the Central Bank of India have engaged into a co-lending agreement in 2023, and MAG and CBoI will lend jointly. This arrangement is crucial as it gives MCFL ample funding without leveraging the balance sheet. |
High geographical concentration
MFCL has its presence in only 2 states Maharashtra and Karnataka with branch base of 68 as on September 30, 2025. The loan book is concentrated in Maharashtra, with ~85 percent of the loan book concentrated in the state as on September 30, 2025. The company’s operations are expected to remain confined to the states of Maharashtra and Karnataka over the medium term.
Acuité believes that geographical concentration will continue to weigh on the company’s credit profile.
Limited financial flexibility
The capital structure of MFCL is supported by Networth of Rs. 63.49 Cr. and a total Debt of Rs. 301.95 Cr. resulting into a gearing of 4.76 times as on March 31, 2025, however there was infusion of Rs. 8.91 Cr. during FY25 in the form of Compulsory Convertible Debentures (CCD). The gearing levels have continued to remain over 4 times for the company since 2021. MFCL has borrowing profile consist of a mix of NBFC/FI and banks. The company has raised these loans at interest rates in the range of 10-12 percent. Acuite believes that the ability of the company to mobilize additional funding through debt/equity will be critical. |
