Kissht Files for Rs 1,000 Crore IPO with SEBI

Digital lending platform Kissht is taking steps to raise Rs 1,000 crore by filing draft papers with SEBI for a fresh share issue. Despite appearing financially attractive when compared to many other startups preparing for IPOs, both its revenue and profit have shown a decline for the fiscal year ending March 2025.

Kissht’s operating revenue saw a reduction of 20%, dropping to Rs 1,337 crore in FY25 from Rs 1,674 crore the previous year, FY24, as revealed in its restated consolidated financial statements accessed from the Registrar of Companies (RoC). The company primarily earns from interest income and sourcing & servicing fees. Interest income from loans decreased by 18% to Rs 994 crore, while the income from sourcing and servicing fees increased to Rs 238 crore. Additionally, various other income streams like marketing and commission income contributed Rs 7 crore and Rs 3 crore, respectively, in the last fiscal year.

Impact of Financial Strategies on Revenue

According to the company’s Draft Red Herring Prospectus (DRHP), the reduction in operational revenue was mainly due to decreased earnings from on-book loans. Even though on-book Assets Under Management (AUM) experienced growth, interest income from loans was lower due to competitive pricing models and the initiation of longer-term loans that deferred the recognition of associated processing fees. Other fees and charges declined sharply owing to improved borrower quality and reduced bounce rates. Nevertheless, revenue from off-book loans saw an increase, with sourcing and servicing fees rising by 45%, driven by the expansion of the off-book loan portfolio.

Cost Management and Financial Performance

On the expenditure front, the impairment on financial instruments represented the largest cost but reduced by half to Rs 327 crore. Costs related to outsourcing and back-office functions fell by 32% to Rs 150 crore, while marketing expenses dropped by 11% to Rs 96 crore. However, finance costs more than doubled to Rs 164 crore, and employee benefit costs rose by 6.6%, amounting to Rs 193 crore. By the end of the last fiscal year, total expenses declined by 21%, reaching Rs 1,136 crore in FY25, down from Rs 1,433 crore in FY24.

The combination of reduced revenue and elevated fixed costs resulted in a profitability contraction for Kissht. Its net profit decreased by 18.5% year-on-year to Rs 160.6 crore in FY25 from Rs 197 crore in FY24, with Return on Capital Employed (ROCE) and EBITDA margin recorded at 28.88% and 29.79%, respectively. On a unit basis, Kissht spent Rs 0.85 to generate a rupee of operating revenue in FY25. As of March 2025, the company reported current assets valued at Rs 2,161 crore, which includes Rs 144 crore in cash and bank balances.