IPO Note : OnEMI Technology Solutions Ltd by BP Wealth
Investment Rationale
Serving the borrower that banks miss, with quick access to credit OnEMI is focused on a customer segment that has remained difficult for traditional lenders to serve. These are salaried individuals earning Rs. 25,000–75,000 per month, with clear credit needs but limited access due to rigid processes and high-cost branch models. The company addresses this through a fully digital approach where customers can apply and receive loan offers quickly through its app. Speed is a key strength. More than 85% of new customers receive loan offers within 10 minutes, which improves conversion and makes the product more usable in urgent situations. At the same time, the company has built multiple ways to reach customers instead of relying only on digital marketing. Customers can access credit directly on the app, at merchant stores through QR-based financing, or through partnerships with online platforms. This ensures the product is available both online and at the point where the customer actually needs credit. Over time, this also helps build a large and repeat customer base, improving underwriting and cross-sell. The QR-based model is particularly important as it allows a customer to scan at a store and instantly access a loan, linking offline purchase behaviour with digital credit. This kind of integration is not easy for traditional lenders to build. Overall, OnEMI is well positioned in a segment where demand is strong but access has been limited, and its approach improves both reach and usability.
Scaling lending through partners, while improving the mix over time
OnEMI’s model allows it to grow without relying entirely on its own balance sheet. As of Dec’25, AUM is split between ~51% on-book and ~49% off-book through partnerships with 47 lenders. On the offbook side, the company earns sourcing, servicing and performance-linked fees without taking credit risk. This allows the company to continue growing even without adding the same amount of capital on its own books. AUM has grown at a ~79.5% CAGR from Rs. 1,268 crores in FY23 to Rs. 5,956 crores by Dec’25, indicating strong execution. At the same time, the business can handle higher volumes
without a similar increase in cost. Loan decisions are largely automated, which helps maintain speed and consistency. Collections are supported by a large on-ground and tele-calling network with presence across 17,000+ pin codes, ensuring control as the book grows. The addition of LAP is an important shift. It currently forms ~6% of AUM, but brings in secured lending to a largely unsecured portfolio. This helps reduce overall risk over time. It also allows the company to offer larger loans to existing customers as their income profile improves, instead of losing them to other lenders. Overall, the model supports strong growth, keeps capital needs manageable and improves the portfolio mix gradually.
Valuation
OnEMI is a digital-first lender focused on India’s underpenetrated mass market, combining fast loan disbursal, multiple sourcing channels and a mix of on-book and partner-led lending. The company has scaled quickly while keeping part of the book off its balance sheet, and has started adding secured lending through LAP to improve portfolio mix over time. AUM has grown at a 79.5% CAGR from Rs. 1,268 crores in FY23 to Rs. 4,087 crores in FY25, reaching Rs. 5,956 crores by Dec’25, driven by customer additions and repeat usage. Customer base increased from 6.41 million to 9.16 million, supporting this growth. Net worth rose from Rs. 566 crores to Rs. 1,006 crores, as earnings were retained in the business. Revenue grew at a 16.6% CAGR from Rs. 984 crores in FY23 to Rs. 1,337 crores in FY25. Growth was driven by access to an underserved mass market segment, supported by higher digital adoption post-COVID and multiple sourcing channels including credit QRbased merchant partnerships and fintech platforms, which brought in first-time borrowers. Profitability has improved with scale. EBITDA grew at a ~103% CAGR from Rs. 98 crores in FY23 to Rs. 403 crores in FY25, with margin expanding from 9.8% to 29.8%, driven by lower credit costs (impairments declining from 36.5% to 21.8%) and operating leverage. Fee income from partner-led lending grew at a 75% CAGR from Rs. 77 crores in FY23 to Rs. 238 crores in FY25, driven by higher off-book volumes. However, cost-to-income at 54-56% remains above peers, indicating further room for efficiency gains. Asset quality has weakened, with GNPA increasing from 0.05% in FY23 to 2.9% in 9MFY26, in line with the rapid expansion of a predominantly unsecured loan book. High provisioning (87%) keeps NNPA low at 0.4%. LAP, at 6% of AUM, provides early diversification into secured lending. Overall, at Rs. 171 per share, the issue is valued at 1.37x post-issue book value and 17.9x FY25 earnings. Overall, strong growth, improving profitability and a scalable model support the case. We recommend a Subscribe rating, with asset quality and execution as key monitorables.
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