NBFC stock held by Ashish Kacholia with zero NPAs despite disbursing over ₹52,000 Cr

Synopsis: SG Finserve, a Niche NBFC supply chain financing solutions provider which has disbursed over Rs 52,000 crore without reporting any bad loans, has set a bold target for the future. Can it achieve it?

The​‍​‌‍​‍‌​‍​‌‍​‍‌ stock of this major Non-Banking Financial Company (NBFC) that provides various services is very impressive, mainly because of its singular business model and small but highly effective management that enables it to have no bad loans at all, which is a very rare situation in the industry. As of September 2025, Ashish Kacholia holds a 1.14 percent stake in the company.

In this article, we analyse the company’s power points in detail and try to figure out how its executives have been successful in maintaining such an outstanding level of asset quality which is generally very challenging in the NBFC ​‍​‌‍​‍‌​‍​‌‍​‍‌sector.

With a market capitalisation of Rs 2,154 crore, the shares of SG Finserve Ltd closed at Rs 384.50 per share, down 0.58 percent from its previous day’s closing price of Rs 386.75 per share. Over the past five years, the stock has delivered a multibagger return of 16,617 percent, outperforming NIFTY 50’s return of 93 percent

Company Overview 

SG​‍​‌‍​‍‌​‍​‌‍​‍‌ Finserve Limited (SGFL) is an RBI-registered Non-Banking Finance Company (NBFC), based in Delhi-NCR, that specialises in supply chain financing solutions for Indian conglomerates. The company mainly uses an anchor-based financing model to provide working capital to the dealers, distributors, vendors, retailers, and logistics providers who are the associates of large corporates like APL Apollo, Tata Steel, Vedanta, JSPL, and Ingram Micro. 

SGFL functions on a fully digital platform, which makes client onboarding possible within 48 hours and fund disbursal against invoice/PO can be done in as little as 15 minutes through smooth SAP integrations with anchor partners. The company’s portfolio spreads to dealer financing, retailer financing, vendor/supplier financing, and transporter financing—the initiatives that enable MSMEs to not only optimise their working capital cycle but also to improve their cash flow without the need for conventional collateral. 

The company, which is supported by the APL Apollo Group, takes advantage of its promoter’s 35+ years of manufacturing expertise and strong relationships with over 2,000 channel partners to bring in the next wave of financial inclusion in the supply chain tiers that are ​‍​‌‍​‍‌​‍​‌‍​‍‌less-privileged.​

Most​‍​‌‍​‍‌​‍​‌‍​‍‌ of the money that SG Finserve makes is from interest income and processing fees. The company is maintains a healthy spread of 4 percent over its current borrowing cost of approximately 8.5 percent, which is expected to go down further, with an average yield of 12.5–13.5 percent and a processing fee of 0.25-1 percent(on the sanctioned ​‍​‌‍​‍‌​‍​‌‍​‍‌limit).

How SG Finserve makes money?

Let’s​‍​‌‍​‍‌​‍​‌‍​‍‌ say one of these huge companies (anchors), like Tata Steel, wants to sell its goods to a bunch of small dealers and distributors scattered all over the nation. However, these small businesses don’t have the money to make an upfront purchase of the products. This is where SG Finserve steps in. 

SG Finserve is like a middleman who gives instant money to the small dealers so they can purchase products from Tata Steel immediately. Dealers then sell these products to customers and make a profit, which they use to pay back SG Finserve. SG Finserve earns money by charging a small fee or interest on the borrowed amount.

What’s more interesting is that the whole thing is done via a very simple mobile application or computer, without any paperwork or waiting for days. A dealer can obtain money within merely 15 minutes. Such a kind of financing facilitates the growth of small businesses without them having to be constantly worried about the lack of cash, while big companies like Tata Steel get assured sales. So, it’s a win-win situation for ​‍​‌‍​‍‌​‍​‌‍​‍‌everyone.

Q2 Highlights

SGFL reported a Net Interest Income (NII) of Rs 44.39 crore in Q2 FY26, representing a 44 percent growth from Rs 30.89 crore in Q2 FY25. However, it recorded a slight growth of 4 percent from its previous quarter figure of Rs 42.79 crore.

Coming to its profitability front, SGFL reported a net profit of Rs 28.4 crore in Q2 FY26 as compared to Rs 14.12 crore in Q2 FY25, which is a staggering growth of 101 percent. Additionally, it recorded a slight growth of 16 percent from its previous quarter figure of Rs 24.52 crore.

SGFL’s Loan Book (end of the period) have grown by a staggering 250 percent to Rs 2,878 crore in Q2 FY26 as against just Rs 822 crore in Q2 FY25. Additionally, it grew by 15 percent from Rs 2,504 crore in Q1 FY26. Coming to its gross disbursements, it grew by 58 percent to Rs 5,846 crore in Q2 FY26 as against just Rs 3,698 crore in Q2 FY25. Additionally, it grew by 11 percent from Rs 5,284 crore in Q1 FY26, and has disbursed Rs 52,228 crore as of date, while reporting zero non-performing assets.

How SG Finserve Achieved Zero NPA with Rs 52,000 Crore Disbursements

The answer to this is not difficult to understand; instead, it is hidden behind its unique business model, which in simple terms is coined as a MOAT. One​‍​‌‍​‍‌​‍​‌‍​‍‌ of the secrets of SG Finserve is the limitation of their loans to only those dealers who are associated with big and reliable companies such as Tata Steel or Vedanta. The brilliant part is: when a dealer takes a loan, SG Finserve signs an agreement with the big anchor company that goes like this, “If this dealer doesn’t repay us, you stop supplying them products.” As the dealer’s business is fully dependent on getting commodities from Tata Steel, they have no option but to make the payment on time or lose everything. This gives them the advantage of zero defaults.

Another reason behind this is, SG Finserve issues short-term loans (30–45 days only) so that the money is returned very quickly before any problems can arise. The company’s app is directly linked to the anchor’s computer systems; thus, it can find out the exact buying and selling of each dealer in real-time. 

If a dealer’s business goes down drastically, SG Finserve will be aware of it at once and stop lending to them. The existence of very short loan periods, instant monitoring, and strict vetting of only trusted dealers is the reason for very few defaults. This is the reason why they still have zero bad loans despite lending over Rs 52,000 ​‍​‌‍​‍‌​‍​‌‍​‍‌crore.

Future Outlook 

SG Finserve is targeting to end FY26 with a total loan book of Rs 4,000 crore, of which it has achieved Rs 2,878 crore in this quarter itself; however, the management assured that it would be mostly around Rs 3,500 crore, which might surpass Rs 4,000 crore if the economy does well. Additionally, the company wishes to take this further to Rs 6,000 crore by FY27, which is a staggering growth of 158 percent from the FY25 loan book of Rs 2,326 crore.

According​‍​‌‍​‍‌​‍​‌‍​‍‌ to the management, they had initially projected a PAT of Rs 150–160 crore for FY26. However, owing to the deceleration of the economic environment, they are now anticipating a PAT of Rs 120–125 crore. Besides, they expect the EPS to grow by 10–12 percent every quarter, with the highest growth probably happening in Q3 and Q4.

The company is setting a target of Rs 240-250 crore PBT for FY27, which is equivalent to approximately Rs 190 crore PAT for the year. The increase in profit will be from a larger loan book and improved margins as they will be able to attract more ​‍​‌‍​‍‌​‍​‌‍​‍‌customers. Additionally, the company wants its ROE to grow from 9 percent to 15 percent first and then gradually increase it to 18-19 percent.

SG​‍​‌‍​‍‌​‍​‌‍​‍‌ Finserve plans to begin retail financing in the financial year 2026 and will leverage its robust distributor network to provide loans to retailers in a secure manner. It is expected that these loans will be secured through guarantees from distributors and stop-supply agreements with partner brands, thus ensuring that the risk is kept at a minimum. The company has already entered into Memorandums of Understanding (MOUs) amounting to Rs 150–200 crore and has planned the onboarding process for the first quarter of FY26. The retail financing business will be responsible for 5–10 percent of the targeted Rs 4,000 crore AUM, which is the next growth layer of the value ​‍​‌‍​‍‌​‍​‌‍​‍‌chain.

SG​‍​‌‍​‍‌​‍​‌‍​‍‌ Finserve has kept on expanding its anchor networks, and as a result, its MOU portfolio has grown to Rs 6,550 crore, which is a rise by more than Rs 1,000 crore in the first half of FY26 alone. The company counts 48 top-tier corporate anchors now, as compared to 44 earlier. These MOUs are the pillars of the next disbursements, and they give a very good indication of how the company’s loan book targets for FY27 will be met, as almost 80 percent of the book is secured by inventory or receivables with strong stop-supply ​‍​‌‍​‍‌​‍​‌‍​‍‌protections.

In conclusion, SG Finserve has developed a unique position in the NBFC sector with its anchor-based supply chain financing model, which has allowed it to maintain zero NPAs over a period of time and in the case of high disbursement volumes. The company’s growth initiatives, such as foraying into retail financing, strengthening anchor relationships, and aiming at a bigger loan book, give an impression of growth potential, though the actual performance will determine the outcome. 

The management, on the other hand, has lowered its profit expectations for the near term due to a weak economic environment, but the targets set for FY26–27 indicate their belief in the business model and the market opportunity. As SG Finserve continues to grow, the company’s shareholders and other industry players will probably be keen to find out how the management handles expansion, risk mitigation, and maintaining profitability amid the changing macro ​‍​‌‍​‍‌​‍​‌‍​‍‌environment.

Written by Satayjeet Mukherjee

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