Established track record of Promoters

Uttrayan Financial Services Private Limited (UFSPL) is a Kolkata based Non-Banking Finance Company – Microfinance Institution (NBFC-MFI). UFSPL is promoted by Mr. Kartick Biswas, Founder and Managing Director and Mr. Apu Dhar, Director. The promoters have over two decades of experience in the financial services industry and has played a vital role in building the company's current scale and presence in West Bengal. Mr. Biswas and Mr. Dhar are adequately supported with 4 other non-executive directors, Mr. Bijon Choudhury – ex DGM UCO Bank, Mr. Anindya Sen – ex Sr. Vice President (Eastern Zone) Axis Bank, Mr. Kanchan Chakrabarti – ex DGM United Bank of India, Mr. Sridhar Venkata Subramania Rallabandi
- former Chief Risk Officer in Laxmi Vilas Bank and 1 nominee director Mr. Prasenjit Chowdhury engaged with SIDBI. The members of the boards have over 3 decades of experience in banking and financial services across various functions like credit, treasury, risk management amongst others.
Acuité believes that the company’s growth prospects will be supported by the promoters experience in the industry along with their demonstrated track record of resource raising ability.

Sound Asset Quality

UFSPL primarily focuses on lending to Joint-Liability Group (JLG) lending model to offer loans to women borrowers primarily engaged in income generating activities. The company has been able to maintain sound asset quality parameters since a significant portion of the company’s lending is towards clients with repayment track record. The company reported sound asset quality with GNPA at 0.46 percent and Nil NNPA as of June 30, 2023.
 
Acuité believes that UFSPL’s ability to maintain sound asset quality level in the near to medium term will be key monitorable.

­Risk inherent to microfinance segment
UFSPL primarily extends unsecured loans to economically challenged borrowers who have limited ability to absorb income shocks and it majorly focusses on the rural areas. Since financial assistance to economic challenged borrowers is a sensitive issue, from government standpoint the regulatory dispensation in respect of the policies becomes relevant. Any changes in the regulatory environment impeding the ability of entities like UFSPL to enforce collections, etc will have an impact on its operational performance. Further, the activities of microfinance companies like UFSPL are exposed to concentration risks. UFSPL has presence in 10 states with concentration in West Bengal (53.16 percent of total AUM), Bihar (25 percent of total AUM) as on December 31, 2022. This exposes the company to high geographical concentration risk. Thus, the company's performance is expected to remain exposed to competitive landscape in these regions.
 

Modest Profitability parameters; albeit improving 
The financial risk profile of UFSPL moderated on account of reduction in Net Interest Income during FY2023. The Net Interest Income for FY2023 decline to Rs. 14.40 Cr. from Rs. 15.40 Cr. in FY2022. The PAT marginally improved to Rs. 2.04 Cr in FY23 as compared to Rs. 1.49 Cr in FY22.
Acuité believes that the growth in AUM on account of increasing disbursements will be a key factor in the scalability of a business while maintaining the profitability.