New Delhi [India], April 17: CARE Ratings has reaffirmed its ‘CARE A’ (Stable) rating for Fusion Finance Limited’s debt instruments, supported by a sequential improvement in asset quality.
The rating action covers ₹150 crore of non-convertible debentures and ₹1,500 crore of long-term bank facilities, both retained at ‘CARE A’ (Stable), reflecting stable operational and financial performance alongside strengthening asset quality.
The stable outlook factors in sequential improvement in Fusion’s asset quality, collection efficiency and profitability. CARE also took note of Fusion’s capital raise of ₹800 crore that was completed in Q3FY26, supporting its capital profile and providing cushion for growth.
‘CARE A’ rating indicates that the instruments are considered to have an adequate degree of safety regarding timely servicing of financial obligations and carry low credit risk. The Stable outlook reflects the expectation that the company’s performance will remain steady over the near- to medium-term.
This reaffirmation reflects Fusion Finance’s focus on maintaining financial discipline, strengthening its portfolio quality, and sustaining growth momentum in its core lending business. The company has gradually strengthened its performance on core metrics backed by an improving credit profile, with key financial and operating metrics reflecting a continued recovery in asset quality and overall business momentum.
The company restored its profitability in Q3 FY26, reporting a PAT of ₹14 crore (including one-time impact of labor codes), supported by improving asset quality and calibrated growth, reflecting a turnaround in its earnings trajectory. The company also maintained a strong capital and liquidity position, with a CRAR (capital to risk-weighted asset ratio) of 38.8% and liquidity of ₹1,783 crore, while raising ₹2,522 crore in the third quarter through borrowings and a rights issue, strengthening its overall financial flexibility.
The rights issue infusion further strengthened Fusion’s balance sheet, with continued lender support signalling improved external confidence in the company’s credit profile. Operational metrics also showed steady improvement, with collection efficiency rising to 99.14% in Q3 compared to 98.77% in Q2, while the new book constituted 79% of the portfolio, recording a collection efficiency of 99.56% in Q3 FY26.
On the growth front, disbursements increased to ₹1,594 crore in Q3 FY26 from ₹1,298 crore in Q2 FY26, with disbursements involving up to two lenders remaining stable at 80%, reflecting sustained portfolio quality and disciplined lending practices.
At the same time, credit costs declined for the fifth consecutive quarter to ₹79 crore in Q3 FY26 from ₹571 crore in Q3 FY25, while GNPA further improved to 4.38% in Q3 FY26 from 12.58% in Q3 FY25, reflecting the continued strengthening of the company’s asset quality.
