RNFI Services

RNFI Services reported a robust H2 FY25, with revenue growing by 12% on a half-yearly basis. The company's non-forex business demonstrated significant growth, leading to increased non-forex PAT margins and overall net PAT margins. For the full FY25, PAT grew to INR 20 crore, and Operating Cash Flow (OCF) increased by INR 29 crore. These improvements were supported by an increase in clients and active sites, alongside a strategic reduction in borrowing by half.

The company made a strategic decision to reduce its forex business on a yearly basis, which impacted overall yearly revenue. This move is a prerequisite for obtaining an AD2 license from the RBI, an application for which is currently in process. Management expects the forex business to remain stable in the coming year until the AD2 license is secured, after which they plan to significantly expand foreign remittance services.

RNFI recently acquired Payworld Digital Private Limited, a competitor in the same space, and began managing its operations from April 1, 2025. Payworld, which was loss-making last year, is targeted for a quick turnaround. This acquisition is strategic as it enhances RNFI's network, brings a PPI license (pending RBI approval), and adds approximately 60,000 active agents, significantly boosting the company's last-mile delivery capabilities for financial inclusion services.

The company has been heavily investing in technology, which resulted in a jump in depreciation and amortization expenses. These investments are crucial for enhancing operational efficiency, fraud risk management, and compliance. RNFI's platform is central to its business model, supporting various verticals and enabling deep integration with new clients and institutions.

RNFI anticipates its non-forex business to continue growing at its current rapid pace (analyst noted 'almost 50% growth year-on-year') over the next few years. The company plans to launch 12 new products very soon, which are expected to help maintain this growth rate. The core strategy revolves around increasing the number of sites, products, and clients, leveraging its asset-light agent network model.

While specific capex figures were not detailed, the company indicated an increase of INR 4 crore in net block and INR 6-7 crore in intangibles, reflecting technology investments. The promoter group has committed to transferring free shares worth approximately INR 18 crore (13% stake) to RNFI, which will increase RNFI's stake in Paysprint to around 68%. This move is aimed at enhancing shareholder value and strengthening the company's financial position.

RNFI is actively pursuing several regulatory licenses, including the AD2 license, a license for Paysprint, and the transfer of Payworld's PPI license, with applications in various stages. The company highlighted that net worth criteria for such licenses typically range from INR 15 crore to INR 25 crore and that RNFI plans to invest INR 10 crore for authorization to license. Management emphasized transparency and compliance, noting that they are a regulated entity controlling other regulated entities.