SUMMARY
- SoftBank-backed True Balance has achieved a remarkable scale expansion, growing by over 74 times in the last five fiscal years, with its revenue soaring from Rs 8.95 crore in FY19 to Rs 667 crore in FY24.
- True Balance’s operating revenue increased by 54.8% YoY to Rs 667 crore in FY24 from Rs 431 crore in FY23, as per its consolidated financial statements with the Registrar of Companies.
- The company’s expenditure on employee benefits, finance, advertising, information technology, technical, legal, and other operational expenses increased by 51.4% to Rs 557 crore in FY24.
SoftBank-backed True Balance has achieved a remarkable scale expansion, growing by over 74 times in the last five fiscal years, with its revenue soaring from Rs 8.95 crore in FY19 to Rs 667 crore in FY24.
True Balance, established by Cheolwon Lee, initially launched as a mobile and Direct-to-Home (DTH) recharge service. However, the company’s business landscape underwent a significant transformation in FY21 with the introduction of lending services, both personal and short-term.
The company began lending activities in FY20 through external partners and subsequently established its own Non-Banking Financial Company (NBFC) — True Balance — a year later.
True Balance’s operating revenue increased by 54.8% YoY to Rs 667 crore in FY24 from Rs 431 crore in FY23, as per its consolidated financial statements with the Registrar of Companies.
The personal loan platform of True Balance primarily caters to individuals who are overlooked by traditional banks and lack credit scores. The fees associated with the loans constitute 56% of the firm’s total operating revenue, which saw a significant increase of 63.2% from Rs 231 crore in FY23 to reaching Rs 377 crore in FY24. Additionally, the interest income from loans amounted to Rs 280 crore in FY24.
The costs related to dues and other non-operating income (interest from fixed and current investments) contributed to True Balance’s total revenue, which rose to Rs 673 crore in FY24 from Rs 433 crore in FY23.
In terms of financial health, the company’s provision for bad debts (NPAs) accounted for 36.2% of its total costs, which saw a 26.3% increase to Rs 202 crore in FY24 from Rs 160 crore in FY23. True Balance managed to write off bad debts exceeding Rs 114 crore in FY24, with the remaining amount being allocated as provisions for bad debts.
The company’s expenditure on employee benefits, finance, advertising, information technology, technical, legal, and other operational expenses increased by 51.4% to Rs 557 crore in FY24.
This strategic shift towards lending services led to a 50% YoY growth, enabling True Balance to achieve a 2.3X increase in its net profits, rising from Rs 59 crore in FY23 to Rs 138 crore in FY24. The company’s Return on Equity (ROCE) and Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) margins also saw improvements, reaching 42.24% and 27.64%, respectively. On a per unit basis, True Balance spent Rs 0.84 to generate a rupee in FY24.
True Balance has secured a total of $140 million in funding through equity and debt financing, including a $28 million investment led by SoftBank and Daesung Private Equity, marking its latest funding round, which was completed nearly three years ago.
