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| Product | Quantum (Rs. Cr) (SEBI) | Quantum (Rs. Cr) (Other FSR) | Long Term Rating | Short Term Rating | Regulated By |
| Bank Loan Ratings | 0.00 | 450.00 | ACUITE BBB+ | Stable | Downgraded | - | RBI |
| Non Convertible Debentures (NCD) | 150.00 | 0.00 | ACUITE BBB+ | Stable | Downgraded | - | SEBI |
| Total Outstanding | 150.00 | 450.00 | - | - | - |
| Total Withdrawn | 0.00 | 0.00 | - | - | - |
| Note:- For activities or ratings of instruments falling under the purview of Financial Sector Regulators other than SEBI, the grievance / dispute redressal mechanisms and investor protection mechanisms provided by SEBI shall not be available. |
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Rating Rationale |
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Acuité has downgraded its long-term rating to ‘ACUITE BBB+’ (read as ACUITE triple B plus) from ‘ACUITE A-’ (read as ACUITE A minus) on the Rs. 450.00 Cr. Bank loan facilities of Western Capital Advisors Private Limited (WCAPL). The outlook is revised from 'Negative' to 'Stable'.
Acuité has downgraded its long-term rating to ‘ACUITE BBB+’ (read as ACUITE triple B plus) from ‘ACUITE A-’ (read as ACUITE A minus) on the Rs. 150.00 Cr. Non Convertible Debentures of Western Capital Advisors Private Limited (WCAPL). The outlook is revised from 'Negative' to 'Stable'. Rationale for Downgrade The rating factors in the company’s sequential decline in the profitability over the last two financial years, due to the closure of the supply chain business in the FY24 and the extensive operational expenditure on Prabhaav Loans in FY25. The PAT for FY26 stood at Rs. 3.03 Cr. as against Rs. 16.81 Cr. in FY25 and Rs. 20.53 Cr in FY24. Moreover, the profitability metrics as indicated by Return on Average Assets (ROAA) which stood at 0.31 percent for FY26 has seen a significant decline as compared to 2.33 percent for FY25 and 2.82 percent in FY24. The shift in business strategy and vision towards retail loans (Prabhav Loans) has seen increase in operating expenses in setting up this business line coupled with asset quality pressures pertaining to exposure to stressed assets that have affected the firms profitability. WCAPL's asset quality metrics marked by the GNPA has deteriorated to 2.93 percent in FY26 as against 0.32 percent in FY25. Further, the company as of June 30,2026 holds an exposure of approximately Rs 11 crore worth delinquent/stressed assets across three entities, which as per the management is expected to get resolved. Going forward, Acuite believes that the recovery from these exposures and maintaining asset quality would be key monitorable in the near term. However, these Weaknesses are partially offset by the experienced management along with the support from resourceful promoters of Kejriwal Group. This support is shown via the adequate capitalisation levels at 27.73 percent with a tangible net worth of Rs. 291.95 crore as on March 31, 2026. The AUM has increased from Rs. 701.04 Cr. in FY25 to Rs. 1007.37 Cr. in FY26 where Prabhaav loans already constituted ~39% of the overall AUM. Moreover, the substantial investment into the retail lending division is to yield returns as soon as the current financial year where the operating income is expected to grow vis-a-vis the extensive infrastructure expansion that is taking place and therefore the performance of this development would be a key monitorable. Going forward, the company's ability to infuse equity capital and maintain asset quality while scaling operations would also be important to monitor. |
| About the company |
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WCAPL based out of Mumbai commenced its operations in 2019 with a vision to support the financial services ecosystem by providing growth capital to upcoming players including NBFCs / Fintechs / MFIs / SMEs. In FY21, the company diversified into Supply Chain Financing and Business Correspondent (BC) Retail lending partnerships. In FY24, the company pivoted towards secured MSME retail lending under its proprietary branch-led model, "Prabhaav Loans", and scaled back Supply Chain Financing due to shifting macroeconomic conditions. This strategic shift also aligned with RBI's Digital Lending Guidelines, transitioning from high-risk, high-FLDG models to lower-risk MSME-focused lending under retail partnerships.
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| Unsupported Rating |
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Not Applicable
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| Analytical Approach |
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Acuité has considered a standalone approach to the business and financial risk profile of WCAPL to arrive at the rating.
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| Key Rating Drivers |
| Strength |
| Support from Promoter group coupled with experienced management.
WCAPL commenced its operations in 2019 and has received continuous support in the form of periodic capital infusion from the promoter group since its inception. WCAPL is promoted by the Kejriwal Group led by Kejriwal family. The Kejriwal group has infused funds amounting to Rs 173.75 crore since inception comprising equity and preference capital. Furthermore, Mr. Anil Kejriwal, founder of WCAPL is able backed by senior management team of WCAPL consisting of experienced professionals who have been in the lending business and have been associated with WCAPL since inception. 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. Healthy capital structure though on a decline The company has comfortable capitalization levels to support the near to medium term growth prospects. The capitalization levels of WCAPL majorly comprises Tier I capital, where CRAR stood comfortable at 39.67 percent (Tier I: 38.99 percent) as on March 31, 2025. The CRAR has reduced to 27.73 percent (Tier I: 27.43 percent) as on March 31, 2026 however above the stipulated regulatory level. The company’s capital structure is supported by a net worth of Rs.291.95 crore as on March 31, 2026 and total debt of Rs. 797.83 Cr. resulting in a gearing of 2.73 times as on March 31, 2026 as against 1.70 times as on March 31, 2025 which will provide headroom for near term growth. Going forward, the company's ability to infuse the anticipated equity capital would be crucial to improve the capital position and lower the gearing. Steady build up of the LAP/Affordable home loan portfolio through Prabhaav loans WCAPL in FY25 shifted their whole focus to Prabhaav loans which has allowed the firm to transition from its supply chain lending portfolio to LAP / Affordable home loans. LAP loans are primarily for secured loans for business expansion and debt consolidation while under the affordable home loan segment the firm lends to projects where there is self construction or any extension of existing property. The target customer segment is in Tier-2 to Tier-6 locations where the ROI would vary from 14-24 percents with an average ticket size of 8-9 lakh rupees. The tenure of these loans are ranging from 4 to 20 years. In FY25 Prabhaav loans have already contributed Rs. 123.2 Cr. to the AUM from a setup of 42 retail Prabhaav loan branches in 4 states off Rajasthan, Gujarat, Maharashtra and Madhya Pradesh. Retail Prabhaav loan branches have increased to 79 branches across 7 states, including new states such as Tamil Nadu,Telangana and Karnataka as on March 31, 2026 while the Prabhaav AUM stood at Rs 391.84 Cr. for the same period. Therefore, Acuite believes that WCAPL's ability to grow their AUM and Operating income in FY27 without impacting the operating expenses to earning assets significantly would be key monitorable as it would be a key indicator of the operational performance of the new branches that are being opened. |
| Weakness |
| Deteriorating earning profile
The profitability of the company has deteriorated during FY26, FY25 and FY24 reflected by Return on Average Assets (ROAA) at 0.31 percent for FY26 as against 2.33 percent for FY25 as against 2.82 percent for FY24. Such deterioration comes at the back of shift in strategy as investment and disbursements are now going towards retail loan financing following a complete closure of its supply chain business. This closure of the supply chain business had affected the AUM and the loan portfolio from FY24 as the supply chain business held around 33% of the total AUM and loan portfolio then, which is why it can be observed that the AUM had reduced from Rs. 752.18 Cr. in FY23 to Rs. 526.17 Cr. in FY24. However the introduction of Prabhaav loans into the portfolio mix has already allowed WCAPL to grow their AUM back to Rs. 701.04 Cr. in FY25 and Rs 1007.35 Cr. in FY26 where Prabhaav loans itself is contributing Rs. 391.84 Cr. to the total AUM for FY26. The profit after tax of the company deteriorated to Rs 3.03 crore for FY26 as compared to Rs. 16.81 crore for FY25 as against Rs. 20.53 crore for FY24. The decline in profits were due to the increasing operational expenses to grow the Prabhaav Loan portfolio along with write off done for stressed assets that the company had an exposure with. The Net interest margin declined to 8.39 percent for FY26. Moderate Asset Quality The company has seen moderation in the asset quality profile where the GNPA reported by the company has deteriorated from 0.32 percent in FY25 to 2.93 percent in FY26, owing to exposure to certain stressed assets as well as NPA contributed from the Prabhaav loans and parts of the legacy portfolio. Going forward, as the Prabhaav loan book seasons , it is important to assess the NPA stemming from this segment. The company currently holds an exposure of approximately Rs 11 crore stressed assets across three entities, which is yet to be resolved in the short term. However, if any further stress with respect to these exposures could have a significant impact on the company's profitability going forward. Acuite believes that going forward the ability of the company to grow its loan portfolio while improving its operating income and further deterioration pertaining to the stressed exposure will be key monitorable. |
Rating Sensitivity
| Potential triggers (individual or collective) for an upward rating action: |
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| Potential triggers (individual or collective) for a downward rating action: |
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| All Covenants |
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i) The Capital to Risk-Weighted Assets Ratio (“CRAR”) (as defined in the extant NBFC Regulations as set by the RBI) shall be above 20.0% (twenty percent); Tier 1 CRAR shall be above 18.0%;
ii) Reported Gross NPA (GNPA) shall not exceed 4.25% (four decimal two five per cent) of Company’s overall portfolio iii) Net NPA (NNPA or Gross NPA, net of provisioning) of maximum 3.25% (three decimal two five); iv) Total Debt to Tangible Net Worth shall not exceed 4.5x; v) Tangible Net Worth should not fall below INR 250.0 Cr during the tenure of the NCD vi) The Company shall, commencing from the Deemed Date of Allotment until the Final Settlement Date, ensure that the cumulative mismatch in the assets and liabilities shall not be negative for all the buckets for a period of 1 (one) year from the date of the asset-liability management statements, which shall incorporate all liabilities of the Issuer including put options / reset options, etc. of the Company (in any form). For the purpose of this calculation: (a) asset will include all unencumbered cash and cash equivalent maturing across all buckets of asset-liability management as part of opening asset balance; and (b) unutilized bank lines, undisbursed committed sanctions of Company and cash credit limits shall be excluded. vii) Ensure that earnings after tax net income (excluding extraordinary income) (as determined in accordance with Applicable Accounting Standards) is not negative. This Provision to be tested on an annual basis. viii) The Company shall not prepay any loans or redeem any non-convertible debentures( Voluntarily or mandatorily) prior to its stated maturity date ( subject to the pre-agreed call options and put options) such that it leads to a negative mismatch on a cumulative basis in any of the buckets of the asset liability statement until the Final Settlement Date, after incorporating all liabilities of the Issuer including put options/ interest reset on liabilities. For the purpose of this calculation unutilized bank lines of the Company shall be excluded. |
| Liquidity Position |
| Adequate |
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WCAPL’s overall liquidity profile remains adequate with no negative cumulative mismatches in near to medium term as per ALM dated March 31, 2026. The company had cash and cash equivalents of Rs 78.41 crore and fixed deposits (held as security against borrowings) of Rs. 27.64 crore as on March 31, 2026. The company has debt servicing obligations of Rs 396.82 Cr. as against the collections from loans of Rs 549.23 Cr. for a period of one year from March 31, 2026.
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| Outlook: Stable |
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| Other Factors affecting Rating |
| None |
| Key Financials - Standalone / Originator | ||||||||||||||||||||||||||||||||||||||||
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* Total Assets are adjusted for deferred tax assets
** Total Income is equal to Net interest Income plus other income |
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| Status of non-cooperation with previous CRA (if applicable): |
| Not Applicable |
| Any other information |
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None
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| Applicable Criteria |
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• 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 |
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| Note:- For activities or ratings of instruments falling under the purview of Financial Sector Regulators other than SEBI, the grievance / dispute redressal mechanisms and investor protection mechanisms provided by SEBI shall not be available. |
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Contacts |
List of instruments and names of regulators of the instruments |
