The IPO of digital lending fintech OnEMI Technology Solutions (OTS), better known by its ‘Kissht’ brand, is open for subscription until May 5. It is a ₹926-crore issue, split between a fresh issue of ₹850 crore and an offer for sale (OFS) of shares worth ₹76 crore. The fresh issue proceeds are meant to augment the capital base of its NBFC subsidiary ‘Si Creva Capital Services’ by ₹638 crore and the rest is meant for general corporate purposes. A clutch of investor shareholders is set to offload partial stakes in the OFS, with none exiting the company. Promoters’ stake, which was at 32.3 per cent on a fully-diluted basis (accounting for ESOPs yet to be vested/ exercised) before the IPO, is expected to be at 23.3 per cent post the issue. Promoters are not selling their stake in the IPO.

Disbursing unsecured personal loans through the interface of a mobile app, OTS has built a scalable business model, and its numbers do paint a healthy financial position.

At the upper band of the issue price, OTS is valued at 1.4x post-issue book value. The RHP lists diversified NBFCs such as Bajaj Finance, Cholamandalam Investment & Finance, HDB Financial Services and SBI Cards & Payment Services (SBI Cards) as its peers. However, SBI Cards comes across as the closest peer, as 94 per cent of OTS’ AUM is unsecured personal loans. There are still some fundamental differences in the way business is run though. For instance, SBI Cards uses a more hands-on approach with more physical touch points unlike OTS — making one change the way they look at operating costs.

In FY26, SBI Cards delivered an RoA of 3.2 per cent and trades at 3.9x its book value. OTS’ RoA, on the other hand, is 8.5 per cent (annualised) for 9M FY26. However, OTS’ RoAUM (return on AUM) is the more pertinent measure here, as its business/ AUM is not just confined to loans on the balance sheet (on-book AUM) but also includes off-book exposure (off-book AUM). On-book and off-book loans share the over-₹6,000-crore AUM in a 51:49 ratio. Further details on off-book AUM are discussed in this story. RoAUM for 9M FY26 (annualised) works out to 5.3 per cent — making the valuation appear more than justified on a relative basis.

However, giving due consideration to some factors explained below, we believe caution is required for the time being. We recommend investors to sit out the IPO and wait for more clarity on how core business metrics trend from here.

First, the average lending rate is high — over 30 per cent (30.7 per cent in 9M FY26). This is higher than CreditAccess Grameen’s 21 per cent (microfinance is riskier than personal loans, considering the income profile of the borrower). While borrowers do avail such personal loans for the app-based convenience, it is difficult to eliminate the possibility that their not-so-healthy finances might have made them ineligible to avail loans from banks or larger NBFCs — where interest rates are relatively lower. Cases where a borrower might have multiple loans outstanding cannot be ruled out too. As an investor, one can never be more wary of this than now, with a stagflation-like scenario looming as the scramble for energy persists. El-Nino and lower-than-average rainfall expected further compound the risk.

To its credit, OTS does have robust risk models and its current asset-quality metrics do not suggest a crisis. Gross NPA ratio of 2.9 per cent is comparable with SBI Cards’ 2.4 per cent. However, given its small footprint and the short track record presented in the RHP, we are unable to reliably conclude whether OTS’ models can lead the company successfully through credit downcycles.

While it cannot be generalised, it is nevertheless worth noting that there is hardly a case of lending businesses charging hefty interest rates and, at the same time, successfully manoeuvring through credit cycles in India. The underwhelming returns since IPOs for microfinance companies and SBI Cards serve as cautionary examples.

Second, the company has some moving parts currently. Besides personal loans, which form 94 per cent of the AUM, OTS has started offering LAP (loan against property) since Q4 FY24, which is essentially a mortgage. LAP now constitutes the remaining 6 per cent of the AUM. Unlike personal loans which can be end-to-end managed from a central location — from sourcing to underwriting and collection, LAP needs physical presence to verify the collateral. OTS has expanded its physical presence to 82 branches now and it is reasonable to expect it to scale this business in the coming years.

That said, this addition of a secured product changes how the RoAUM model would look like a few years from now. For instance, since LAP might not carry interest rates as high as personal loans, the yield on advances would decrease (the magnitude of decrease will depend on the proportion of LAP in the mix), fundamentally bringing RoAUM down. Higher operating costs from the new branches would likely offset the operating leverage generated by the personal loan business (since a good part of the cost is sunk cost — in app development expense, for instance, the personal loan business will generate operating leverage as the business scales) impacting RoAUM negatively. However, LAP, in general, carries lower credit cost (provisions and write-offs), offsetting the above two effects on RoAUM to an extent.

The company could also leverage its branches to add other products such as gold loans later on, making it further difficult to model for. With little clarity as to how the portfolio mix would be in the future (IPO-bound companies are restricted from giving forward-looking statements), investors can wait for more clarity.

Business and strengths

OTS operates in a crowded yet fast growing new-age/ digital lending market, which is expected to grow from about ₹60,000 crore as of FY25 to about ₹4.1 lakh crore by FY30, at a projected CAGR of 48 per cent (per a 1Lattice report in the RHP). With an AUM of just about ₹6,000 crore, it has good headroom for growth. A debt-to-equity ratio of 1.6x (mature firms generally operate at 4-5x) and a capital adequacy ratio or CRAR (pre-IPO) of 27 per cent (regulatory requirement of 15 per cent) should support growth. Fresh issue proceeds will take CRAR even higher.

It has built a scalable business model sourcing prospective customers via digital marketing (46 per cent), partnership with merchants and e-commerce platforms/ aggregators (30 per cent) and the rest organically (24 per cent).

It has developed two products so far: personal loans (94 per cent of AUM) and LAP (6 per cent). Besides, it also distributes insurance products, earning fee income. A turnaround time under 10 minutes for 85 per cent of new users and under six minutes for 90 per cent of repeat users is a key USP of this company. The average ticket-size of the loans ranges between ₹25,000 and ₹30,000, and the average tenor at around 10 months. Here are some statistics (mutually exclusive) to understand the borrower profile: 49 per cent are salaried, two-thirds earn between ₹25,000 and ₹75,000, have a median credit score of 746 (credit scores range from 300 to 900; higher score represents better creditworthiness) and have a mean age of 32 years.

Off-book business

In its off-book business, OTS sources prospective borrowers for its lending partners (other NBFCs) to underwrite. It also manages loans that are so underwritten, including collection, on behalf of its partners — thus earning fee income.

OTS does two kinds of off-book arrangements. In the first, the entire loan is underwritten by the partner, and this constitutes two-thirds of the off-book AUM. In the second, OTS underwrites a fixed portion of the loan (say, 20 per cent) and the rest by the partner (this 20 per cent reflects on OTS’ balance sheet). The company is also regulatorily required to guarantee up to 5 per cent of the off-book loan amount, to indemnify its partner in case the borrower defaults — called FLDG (first loss default guarantee).

Published on May 2, 2026