Bengaluru: Mumbai-based Fibe filed for an initial public offering on Tuesday, combining a fresh issue of up to ₹750 crore with an offer for sale of more than 40 million shares by existing investors.
Fibe is a digital consumer lender that uses its app and partner channels to offer mostly unsecured personal loans and other credit products to salaried, middle-income customers.
The draft red herring prospectus (DRHP) noted that the company depends heavily on unsecured personal loans, repeat borrowing from existing customers, and its material subsidiary — EarlySalary Services Pvt. Ltd, which does the actual lending and carries all borrowings on the balance sheet.
The DRHP also shows large default loss guarantee payouts, signalling that the business is not just a pure fee-led fintech but a lender exposed to credit cycles and funding costs.
The Pune-based company, which says it has no identifiable promoter, is backed by investors including TPG’s Rise Fund, Norwest, Eight Roads, Piramal Finance and Chiratae-linked vehicles.
New customers carry higher risk
Fibe says 38.53% of personal loan disbursements in FY26, 33.45% in FY25, and 29.23% in FY24 were made to new customers, and warns that this “involves exposure to higher credit risk”.
New borrowers do not have an internal repayment track record, so the company is underwriting them largely on external data, income verification and model-based scoring rather than on observed behaviour with Fibe itself.
The company says any adverse development affecting such customers could lead to higher defaults, which “could adversely affect our business, results of operations, financial condition and cash flows”.
Repeat lending is central
Fibe also banks heavily on repeat borrowers. It said in the DRHP that it generated repeat loans from 83.92% and 90.7% of its existing eligible customers in FY25 and FY24, respectively, and warned that any reduction in such borrowing behaviour could hurt growth and revenue.
The DRHP shows that 911,330 existing customers took repeat loans in FY25, compared with 1,094,065 customers in FY24.
The amount of personal loans disbursed to existing customers rose to ₹6,187.76 crore in FY25 from ₹6,039.77 crore in FY24. Existing customers as a share of eligible borrowers were 83.92% in FY25 and 90.70% in FY24, indicating a dip in the repeat user base.
The company said existing borrowers help lower acquisition costs and turnaround times because it already has their data and relationship history, making repeat lending more efficient than chasing new customers.
“A decline in repeat rates could increase our reliance on new customer acquisition, potentially leading to higher acquisition costs, longer customer acquisition cycles and lower operating efficiency, which could adversely affect our business, results of operations, financial condition and cash flows,” it said.
Balance sheet and asset quality
On the balance sheet, Fibe’s on-book loan book stood at ₹5,241.2 crore as of 31 March 2026, versus ₹3,213.78 crore a year earlier and ₹2,287.16 crore in FY24. The company says 99.39% of total gross loans were unsecured as of 31 March 2026, which is why underwriting risk remains high even as scale improves.
There is some secured-lending presence, but it is tiny. Secured loans were 0.61% of the book in FY26, worth about ₹5.28 crore. The DRHP says the majority of customers are middle-income individuals with an average monthly income of ₹37,083.07, making repayment sensitive to job stability and income volatility.
Delinquency data show some improvement in the headline stage 3 number. Gross Stage 3 Loans were ₹63.13 crore in FY26, down from ₹93.17 crore in FY25, but higher than the ₹44.62 crore in FY24. As a share of total gross loans, Gross Stage 3 was 1.2% in FY26, 2.9% in FY25 and 1.95% in FY24.
Fibe reported revenue from operations of ₹1,584.55 crore in FY26, up from ₹1,208.94 crore in FY25 and ₹771.86 crore in FY24. The company posted net profit of ₹257.46 crore in FY26, versus ₹113.73 crore in FY25 and ₹101.25 crore in FY24.
Fibe’s total expenses in FY26 were ₹1,215.12 crore. The largest expense head was impairment of financial instruments or credit cost, at ₹420 crore, or about 34.5% of total expenses.
FLDG exposure and IPO use of funds
The biggest hidden risk in the DRHP may be its default loss guarantee book. First-loss default guarantee (FLDG) is a structure in which Fibe agrees to absorb part of the losses on loans sourced or serviced on behalf of partner lenders if borrowers default beyond agreed thresholds.
On this, Fibe said it may have to compensate lending institutions for borrower defaults and incurred losses on guarantees settled of ₹135.25 crore in FY26, ₹205.96 crore in FY25 and ₹41.20 crore in FY24.
This is especially relevant because the RBI, in its June 2023 default loss guarantee framework, capped FLDG cover at 5% of the underlying loan portfolio and required lenders to invoke such guarantees within 120 days of being overdue. RBI also requires lenders to recognise bad loans and make provisions on them on a standalone basis, without netting off FLDG cover.
As of 31 March 2026, Fibe had given corporate guarantees of ₹3,276.21 crore against borrowings raised by its material subsidiary, EarlySalary Services. A corporate guarantee means Fibe has promised the lenders that if the subsidiary cannot repay, Fibe itself may have to step in and make good the dues.
“While our corporate guarantees and sponsor support have not been invoked during the last three Fiscals, we cannot assure you that our Material Subsidiary will be able to meet its debt service obligations at all times or that we will not be required to fulfil our obligations under these corporate guarantees,” the company said in its DRHP.
That means the IPO is not just a growth capital raise; it is also a capital and liability-management event for a fintech lender that still sits on a thick layer of credit and funding risk.