- InCred's AUM jumped 39% YoY, signaling robust loan demand and tech‑driven underwriting.
- Eight fresh IPOs span finance, infrastructure, education, and manufacturing, hinting at a broader market revival.
- Sector peers like Tata Capital and Adani Finserve are tightening credit, creating a potential gap for aggressive lenders.
- Historical IPO cycles show that early‑stage listings in high‑growth NBFCs can deliver 30%+ first‑year returns.
- Key risks include regulatory tightening, credit quality pressure, and macro‑economic slowdown.
You missed the fine print on India's next NBFC superstar, and now you might be late.
InCred Holdings IPO: A Deep Dive into Growth Drivers
InCred Holdings, the 100% parent of InCred Financial Services, is poised to launch an IPO after SEBI’s green light. Since its inception, the platform has disbursed more than ₹25,000 crore to over 400,000 borrowers, leveraging a network of 140+ branches and a 2,600‑strong workforce. For FY25, AUM (Assets Under Management) reached ₹12,585 crore—a 39% year‑on‑year rise—fuelled by technology‑enabled underwriting and disciplined risk controls.
Why does this matter? The NBFC sector, which accounts for roughly 15% of India’s credit ecosystem, has been rebounding from a liquidity crunch that began in 2020. InCred’s diversified loan book—personal, student, MSME, and secured business loans—offers exposure across consumer and corporate demand cycles, reducing concentration risk. Moreover, its focus on financial institutions as borrowers positions it to capture the “bank‑to‑NBFC” funding arbitrage as banks tighten their balance sheets.
Infrastructure and Engineering IPOs Signal a Sector Rotation
Aarvee Engineering Consultants secured approval for a ₹202.5 crore fresh issue plus an offer‑for‑sale of up to 6.75 million shares. The firm’s portfolio—transportation, water, and urban development—aligns with India’s $1.5 trillion infrastructure push under the National Infrastructure Pipeline. Similarly, Laser Power & Infra, a cable and conductor manufacturer, targets a ₹1,200 crore raise to fund expansion, eyeing a valuation of ₹5,500–₹6,500 crore.
These approvals suggest that capital markets are once again rewarding asset‑heavy, government‑linked sectors. Investors who were previously defensive on infrastructure may now consider adding exposure, especially as the fiscal stimulus trickles into project pipelines.
Competitor Landscape: How Tata, Adani, and Others Are Responding
Tata Capital has been expanding its digital loan origination platform but remains cautious on fresh equity raises, preferring debt funding. Adani Finserve, meanwhile, is deepening its presence in renewable‑energy financing, a niche that could cannibalize a slice of InCred’s MSME loan market. The divergent strategies—Tata’s prudence, Adani’s thematic focus, and InCred’s aggressive loan growth—create a natural segmentation for investors to pick winners based on risk appetite.
Historical Context: Past NBFC IPOs and What They Taught Us
Looking back, the 2019 IPOs of Bajaj Finserv and Muthoot Finance delivered double‑digit first‑year returns, driven by a surge in consumer credit demand. However, the 2021 wave of NBFC listings faced headwinds as RBI tightened liquidity norms, causing several stocks to underperform. The key lesson: timing the market relative to regulatory cycles is crucial. InCred’s filing comes as RBI signals a more calibrated approach, focusing on credit quality rather than blanket credit curbs.
Technical Definitions: AUM, Underwriting, Offer‑for‑Sale Explained
Assets Under Management (AUM) represents the total market value of assets that a financial institution manages on behalf of its clients. Growth in AUM generally signals expanding business and higher fee income.
Technology‑led Underwriting uses AI/ML algorithms to assess borrower creditworthiness, reducing manual errors and accelerating loan approvals. This approach improves loan‑to‑value ratios and can lower non‑performing assets (NPAs).
Offer‑for‑Sale (OFS) is a mechanism where existing shareholders sell their stakes directly to the public, without raising fresh capital. It often provides liquidity to promoters and can serve as a price discovery tool.
Investor Playbook: Bull and Bear Cases for InCred and Peer IPOs
Bull Case: Continued credit demand, especially from underserved segments, drives loan book expansion. Tech‑enabled underwriting keeps NPAs low, supporting margin stability. A successful IPO could fetch a premium valuation (15‑20% above sector average) given the growth narrative.
Bear Case: Regulatory tightening or a slowdown in consumer spending could increase credit risk. If loan growth decelerates, AUM expansion stalls, putting pressure on earnings. Additionally, a weak market sentiment could compress IPO pricing, leading to a post‑listing dip.
For investors, a balanced approach could involve a core position in InCred, complemented by selective exposure to infrastructure names like Aarvee and Laser Power, which offer longer‑term, asset‑backed stability.
Stay vigilant, monitor RBI policy cues, and keep an eye on the pricing corridor when the prospectus hits the market. The next few weeks could set the tone for India’s primary market momentum in 2024‑25.