SBFC Finance

Diversified pan-India presence with an extensive network to cater to its target customer segment;

100% in-house sourcing, leading to superior business outcomes;

Comprehensive credit assessment, underwriting and risk management framework;

Extensive on-ground collections infrastructure leading to maintenance of robust asset quality;

Healthy liability franchise with low cost of funds;

Consistent financial performance backed by profitable growth;

Experienced, cycle-tested and professional management team with good corporate governance backed by marquee investors.

The risk of non-payment or default by its borrowers may adversely affect the company business, results of operations and financial condition.

The company depends on the accuracy and completeness of information provided by its customers and certain third party service providers and its reliance on any erroneous or misleading information may affect its judgement of their creditworthiness, as well as the value of and title to the collateral.

The quality of the company portfolio may be impacted due to higher levels of NPAs and its business may be adversely affected if the company is unable to provide for such higher levels of NPAs.

The company inability to assess and recover the full value of collateral, or amounts outstanding under defaulted loans in a timely manner, or at all, could adversely affect the company business, results of operations and financial condition.

The company require substantial capital for its business and any disruption in the company sources of capital could have an adverse effect on its business, results of operations and financial condition.

The company business is particularly vulnerable to interest rate risk, and volatility in interest rates for both lending and treasury operations, could have an adverse effect on its net interest income and net interest margin, thereby affecting the company results of operations and cash flows.

COVID-19 has had and could continue to have certain adverse effects on its business, operations, cash flows and financial condition.

Any downgrade in the company credit ratings could increase its borrowing costs, affect the company ability to obtain financing, and adversely affect the company business, results of operations and financial condition.

The company is subject to laws and regulations governing the financial services industry and its operations in India, including laws in relation to capital adequacy ratios. Changes in, and differing interpretations of, laws and regulations governing it could adversely affect the company business, results of operations and prospects.

As an NBFC, the company is subject to periodic inspections by the RBI. Non-compliance with observations made by the RBI during these inspections could expose it to penalties and restrictions.

The company may face asset-liability mismatches, which could affect its liquidity and consequently, may adversely affect the company operations and profitability.

The company has experienced growth in recent years and its may not be able to sustain the company growth or manage it effectively or execute its growth strategy effectively.

The company handles high volumes of cash and gold jewellery in a dispersed network of branches. Accordingly, its exposed to operational risks, including employee negligence, fraud, petty theft, burglary and embezzlement, which could harm its results of operations and financial position.

The company inability to compete effectively in an increasingly competitive industry may adversely affect its net interest margins, income and market share.

The company derive a portion of its AUM from the company Loans against Gold and the loss of business in relation to such Loans against Gold could adversely affect its business and prospects.

The company inability to meet its obligations, including financial and other covenants under the company debt financing arrangements could adversely affect its business, results of operations and financial condition.

Some of the loans the company provide are unsecured and are susceptible to certain operational and credit risks which may result in increased levels of NPAs, which may adversely affect its business, prospects, results of operations and financial condition.

Any failure or significant weakness of its internal processes or systems could cause operational errors or incidents of fraud, which would adversely affect its business, profitability and reputation.

There are certain defaults/ delay in payment of statutory dues by it. Any further default/ delay in payment of statutory dues may attract financial penalties from the respective government authorities and in turn may have a material adverse impact on its financial condition and cash flows.

The company participate in markets with continuously evolving technology and customer needs, and if its do not compete effectively with such established companies and new market entrants, its business, results of operations, cash flows and financial condition could be adversely affected.

The company inability to expand its business into new regions and markets in India or the sub-optimal performance of its new branches could adversely affect the company business, results of operations, financial condition and cash flows.

The company Promoters have limited experience in certain functional areas of its business operations.

The company relies on its internal credit policy to make credit decisions. If the company do not make accurate credit decisions, its business and financial results will be adversely affected, and the impact could be material.

The company relies significantly on its information technology systems for the company business and operations and any failure, inadequacy or security breach in such systems could adversely affect its business, results of operations and reputation.

Any deterioration in the performance of any pool of receivables securitized to banks and other institutions may adversely impact its results of operations.

Fluctuations in the market values of the company investments could adversely affect its results of operations and financial condition.

Certain statutory and regulatory licenses and approvals are required for conducting the company business and any failure or omission to obtain, maintain or renew these licenses and approvals in a timely manner, or at all, could adversely affect its business and results of operations.

The company may not be able to identify, monitor and manage risks or effectively implement its risk management policies.

The company inability to detect money-laundering and other illegal activities fully and on a timely basis may expose it to additional liability and adversely affect the company business and reputation.

The company has geographic concentration in certain states and therefore are dependent on the general economic conditions and activities in these states.

The company is exposed to risks that may arise if its customers opt for balance transfers to other banks or financial institutions.

Industry information included in this Draft Red Herring Prospectus has been derived from an industry report prepared by CRISIL Limited exclusively commissioned and paid for by it for such purpose.

The company operations could be adversely affected by strikes or increased wage demands by the company employees or any other kind of disputes with its employees.

The company insurance coverage may not be sufficient or may not adequately protect it against all material hazards, which may adversely affect the company business, results of operations and financial condition.

Any negative cash flows in the future would adversely affect the company cash flow requirements, which may adversely affect the its ability to operate its business and implement the company growth plans, thereby affecting its financial condition.

As of June 30, 2022, the company had contingent liabilities which have not been provided for in its financial statements and could adversely affect the company financial condition.

The company Statutory Auditors have included certain emphasis of matter in connection with Fiscal 2020 and Fiscal 2021 in their examination report on the Restated Financial Information and have included certain remarks in connection with the Companies (Auditor`s Report) Order, 2020/ Companies (Auditor`s Report) Order, 2016.

The company may face difficulties and incur additional expenses in operating in semi-urban and rural markets, where infrastructure may be limited.

The Company is or may be involved in certain legal and regulatory proceedings. Any adverse decision in such proceedings may have a material adverse effect on its business, financial condition, cash flows and results of operations.

The company is dependent on its senior management team, and Key Managerial Personnel, and the loss of, or its inability to hire, retain, train, and motivate qualified personnel could adversely affect its business, results of operations, and financial condition.

The company do not own all its branch offices, including the company Registered Office and Corporate Office. Any termination or failure by it to renew the lease and license agreements in a favorable and timely manner, or at all, could adversely affect its business and results of operations. Moreover, many of the lease and license agreements entered into by it may not be duly registered or adequately stamped.

Certain of the company Directors are on the board of directors of its engaged in a line of business similar to that of the company. Any conflict of interest that may occur as a result could adversely affect its business, financial condition, results of operations and cash flows.

The company funding requirements and proposed deployment of the Net Proceeds are based on management estimates and may be subject to change based on various factors, some of which are beyond its control.

Any variation in the utilization of the Net Proceeds would be subject to certain compliance requirements, including prior shareholders` approval.

Certain of the Directors and Key Managerial Personnel are interested in the Company`s performance in addition to their remuneration and reimbursement of expenses.

The company non-convertible debentures are listed on the BSE and the company is subject to rules and regulations with respect to such listed non- convertible debentures. If the company fail to comply with such rules and regulations, its may be subject to certain penal actions, which may have an adverse effect on its business, results of operations, financial condition and cash flows.

The average cost of acquisition of Equity Shares may be less than the Offer Price.

The company may enter into related party transactions in the ordinary course of its business and the company cannot assure you that such transactions will not have an adverse effect on its results of operation and financial condition.

The company will not receive any proceeds from the Offer for Sale. The Promoter Selling Shareholders will receive the net proceeds from the Offer for Sale.

The Company may not be able to pay dividends in the future. Its ability to pay dividends in the future will depend upon the company future earnings, financial condition, cash flows, working capital requirements and capital expenditures and the terms of its financing arrangements.

The company may be unable to adequately protect its intellectual property and may be subject to risks of infringement claims.

Negative publicity could damage its reputation and adversely impact the company business and financial results.

The company has in this Draft Red Herring Prospectus included certain non-GAAP financial measures and certain other industry measures related to its operations and financial performance. These non-GAAP measures and industry measures may vary from any standard methodology that is applicable across the Indian retail credit and financial services industry, and therefore may not be comparable with financial or industry related statistical information of similar nomenclature computed and presented by other companies.

The Company has issued Equity Shares during the preceding one year at a price that may be below the Offer Price.