Vaibhav Vyapaar IPO (13-15 October) Analysis

Vaibhav Vyapaar Limited is a Non Banking Financial Company registered with the Reserve Bank of India. The company provides unsecured personal loans to salaried and self employed individuals through a fully digital lending platform, operating both on a direct lending basis and through co lending arrangements with other NBFCs. It also earns revenue by offering its application and technology services to other NBFCs.

The company offers personal loans under the brand LoanFront, through its mobile application, LoanFront Personal Loan App, which covers loan origination, due diligence, underwriting, documentation, disbursal and repayment. The company was originally incorporated in 2009 and received its NBFC licence from the RBI in August 2010.

It was acquired by CapFront Technologies Private Limited in October 2019, which remains its holding company, and has operated its LoanFront digital lending platform for the last 6 years. The company was converted from a private limited company to a public limited company in 2026.

As on July 31, 2026, the company's Assets Under Management stood at Rs.8,124.05 Lakhs, split between on book AUM of Rs.6,822.76 Lakhs and off book AUM of Rs.1,301.29 Lakhs arising from co lending arrangements, with a net worth of Rs.4,719.55 Lakhs and a Debt to Equity ratio of 0.80.

The loan book is concentrated in the southern and western states of India, with the top five states, Tamil Nadu, Karnataka, Telangana, Andhra Pradesh and Maharashtra, together contributing 77.09% of total AUM as on July 31, 2026.

Key Basics

This is a fresh issue of up to 77,96,000 Equity Shares of face value Rs.5 each. There is no offer for sale component, as the entire Issue constitutes a fresh issue of Equity Shares. The company's Promoters are Itha Venkata Raghava Gowrinath and Capfront Technologies Private Limited.

Particulars	Details	Particulars	Details
Issue Type	Fresh Issue only	Face Value	Rs.5 per Equity Share
Fresh Issue	Up to 77,96,000 Equity Shares	Offer for Sale	Nil
Price Band	[TBD]	Lot Size	[TBD]
Bid or Offer Opens	[TBD]	Bid or Offer Closes	[TBD]
Listing At	BSE and NSE	RHP Date	October 7, 2026

The RHP discloses a weighted average cost of acquisition of Rs.35.00 per share for primary issuances in the eighteen months preceding the RHP, which investors may compare against the eventual Issue Price and Price Band once announced.

How Will the IPO Money Be Used?

Object	Estimated Amount (Rs. Lakhs)
Augment the capital base of the company	3,200.00
General Corporate Purposes (capped at 15% of Gross Issue Proceeds or Rs.1,000 Lakhs, whichever is less)	[TBD]

Augmenting the capital base is a standard and appropriate use of proceeds for an NBFC, as it directly expands the equity base against which the company can raise further borrowings and grow its loan book within regulatory capital adequacy norms.

None of the objects of the Issue have been appraised by any bank, financial institution or independent third party organisation, and the funding needs are based on management estimates. There is no monitoring agency appointed to oversee utilisation of the Issue proceeds, as disclosed in the RHP's risk factors.

Financial Performance

Revenue, Profitability and Asset Quality

All figures below are as disclosed in the RHP, already stated in Rs. Lakhs.

Particulars (Rs. Lakhs)	FY2026	FY2025	FY2024
Revenue from Operations	3,679.94	2,504.86	2,525.44
Profit Before Tax	315.10	102.76	60.78
Profit After Tax (PAT)	197.10	147.97	45.48
Basic and Diluted EPS (Rs.)	1.22	0.92	0.28
Return on Net Worth (RoNW)	6.75%	5.44%	1.77%
Net Asset Value per Share (Rs.)	18.13	16.90	15.99
Gross NPA %	4.71%	5.25%	6.72%
Net NPA %	1.76%	1.73%	0.60%

PAT grew from Rs.45.48 Lakhs in FY2024 to Rs.197.10 Lakhs in FY2026, with Return on Net Worth improving each year to 6.75% in FY2026, still modest in absolute terms for a lending business.

Gross NPA as a percentage of the company's own loan portfolio has improved steadily, from 6.72% in FY2024 to 4.71% in FY2026, while Net NPA has risen slightly to 1.76% over the same period, reflecting both improving asset quality on a gross basis and a somewhat lower provisioning buffer relative to gross NPAs.

Finance costs form a significant part of total expenses, at Rs.664.44 Lakhs in FY2026 against revenue from operations of Rs.3,679.94 Lakhs, reflecting the capital intensive nature of a lending business funded substantially by borrowings.

The company wrote off Rs.1,186.92 Lakhs of gross NPAs in FY2026 and Rs.1,163.69 Lakhs in FY2025, which is a meaningful figure relative to the company's total income and net worth, and investors should note that bad debt write offs of this magnitude are a recurring feature of the company's unsecured lending model rather than a one time event.

Balance Sheet and Cash Flow

Particulars (Rs. Lakhs)	As at Jul 31, 2026	FY2026	FY2025	FY2024
Total Assets	9,615.96	8,422.52	5,503.92	6,117.53
Total Equity (Net Worth)	4,719.55	2,918.81	2,721.70	2,573.72
Total Borrowings (Long and Short Term)	3,790.11	4,679.52	2,265.84	2,676.10
Short Term Loans and Advances (Loan Book)	6,947.44	6,315.31	3,433.27	3,665.19

Net cash flow from operating activities was negative in FY2026, at Rs.1,843.74 Lakhs used, a reversal from the small positive figure of Rs.30.53 Lakhs in FY2025, driven largely by growth in loans and advances disbursed during the year, which is a normal feature of a growing lending book but one that makes the company reliant on continued access to borrowings and equity capital to fund growth.

The stub period ended July 31, 2026 showed positive operating cash flow of Rs.208.54 Lakhs. The company raised Rs.1,500.00 Lakhs through issue of shares in the stub period ended July 31, 2026, alongside its regular programme of long term and short term borrowings.

How Does It Compare to Peers?

The RHP identifies two listed NBFC peers for comparison, Paisalo Digital Limited and Apollo Finvest (India) Limited.

Company	RoNW (%)	NAV per Share (Rs.)	EPS (Rs.)
Vaibhav Vyapaar Limited	6.75%	18.13	1.22
Paisalo Digital Limited	13.24%	19.49	2.59
Apollo Finvest (India) Limited	9.36%	199.03	18.63

On Return on Net Worth, Vaibhav Vyapaar's 6.75% in FY2026 trails both disclosed listed peers, Paisalo Digital at 13.24% and Apollo Finvest at 9.36%, suggesting the company has scope to improve capital efficiency relative to at least some of its listed comparables. The disclosed industry average P/E of 26.265, drawn from this peer set, gives investors a reference point once the company's own Issue Price based P/E is available.

Key Risks

● Unsecured lending book with recurring bad debt write offs. The company's loans are entirely unsecured, and it wrote off Rs.1,186.92 Lakhs of gross NPAs in FY2026 and Rs.1,163.69 Lakhs in FY2025, figures that are large relative to the company's net worth of Rs.2,918.81 Lakhs at the end of FY2026. Net NPA as a percentage of the loan book has risen to 1.76% in FY2026 from 0.60% in FY2024, even as gross NPA has improved, indicating a thinner provisioning cushion.

● Past RBI reporting inaccuracies in NPA recognition and provisioning. The company has disclosed that it identified inaccuracies in its regulatory reporting to the RBI for the financial year ended March 31, 2024, arising from incorrect internal policies on NPA recognition and provisioning, which led to misreporting of certain financial and asset quality parameters and required subsequent correction. While no penalty has been levied to date, this is a material governance disclosure for a regulated lender.

● A prior board composition change triggered a change in management requiring RBI approval that was not obtained at the relevant time, though it has since been intimated to the RBI and the board composition restored. No show cause notice or penalty has been received to date, but the matter remains a disclosed compliance lapse.

● Dependence on the holding company for a core digital asset. The company's digital lending operations depend on a domain name legally owned by its holding company, Capfront Technologies Private Limited, and made available only through a No Objection Certificate rather than outright ownership, creating a structural dependency that could disrupt the lending platform if that permission were revoked or disputed.

● Negative operating cash flow in FY2026. The company used Rs.1,843.74 Lakhs of cash in operating activities during FY2026, funded through fresh borrowings and equity, a pattern that makes continued growth dependent on the company's ongoing ability to raise external capital.

● AUM is geographically concentrated, with the top five states contributing 77.09% of total AUM as on July 31, 2026, exposing the company to state specific economic or regulatory developments.

● The company depends on third party software vendors and service providers for its digital lending operations and mobile application infrastructure, and any disruption could affect loan origination and servicing.

● The company does not have access to records and data pertaining to certain historical legal and secretarial information, as disclosed in the RHP's risk factors.

● There were procedural delays in compliances associated with Non Convertible Debentures and an inadequately stamped Business Transfer Agreement with the company's holding company, both disclosed as specific risk factors.

● As an NBFC, the company is subject to the RBI's scale based regulatory framework, and future tightening of capital adequacy, provisioning or digital lending conduct norms could increase compliance costs or constrain growth.

Positives to Note

● Improving gross asset quality trend, with Gross NPA as a percentage of the own loan portfolio declining from 6.72% in FY2024 to 4.71% in FY2026, alongside steadily improving Return on Net Worth over the same period.

● Established digital lending track record of 6 years under the LoanFront platform, with a fully digital, technology enabled underwriting and disbursal process that can scale without a traditional branch network.

● Diversified revenue model, combining direct lending, co lending partnerships with other NBFCs, and a technology services line that monetises the company's digital lending infrastructure for third parties.

● Prudent use of proceeds, with the Fresh Issue earmarked substantially to augment the capital base, a use that directly supports future loan book growth within regulatory capital adequacy requirements for an NBFC.