SME-focused non-banking financial company (NBFC) Oxyzo Financial Services reported a 23% increase in operating revenue to Rs 1,488.8 crore in FY26, while net profit rose 11% year-on-year to Rs 375.5 crore, reflecting continued growth in lending activity and a stable asset quality profile.
The Gurugram-based lender, backed by the founders of OfBusiness, expanded its loan book and strengthened its balance sheet during the fiscal year even as borrowing costs and operating expenses increased. The company has also begun widening its presence beyond traditional lending through acquisitions, fund management initiatives, and debt capital market offerings.
According to its consolidated financial statements, operating revenue rose from Rs 1,207.4 crore in FY25. Interest income remained the primary contributor, increasing 23% to Rs 1,406.8 crore. Fee and commission income also grew 13% to Rs 68.1 crore. Including other income, total income stood at Rs 1,493.8 crore during the year.
Lending Expansion
The growth was driven largely by the expansion of Oxyzo's lending operations among small and medium enterprises, particularly businesses engaged in manufacturing and contracting sectors.
Founded in 2016 by Ashish Mohapatra, Bhuvan Gupta, Ruchi Kalra and Vasant Sridhar, Oxyzo was initially created to address financing gaps faced by SMEs that often struggle to access timely working capital from traditional financial institutions.
Over the years, the company has evolved into one of the larger technology-enabled lenders in the SME segment. By the end of March 2026, its total assets had increased 28% year-on-year to Rs 11,822 crore, while the loan book expanded to Rs 10,545 crore.
The growth comes at a time when lenders are increasingly targeting underserved business borrowers amid rising credit demand from small enterprises. However, maintaining asset quality while scaling lending remains a key challenge for NBFCs operating in this segment.
Asset Quality Stable
Despite the rapid expansion of its loan portfolio, Oxyzo maintained relatively stable asset quality metrics.
Gross non-performing assets stood at 0.74% at the end of FY26, while net NPA remained at 0.30%. The company reported a return on assets (RoA) of 3.8%, reflecting continued profitability despite higher funding costs.
Its net worth increased to Rs 3,327 crore, while the capital adequacy ratio (CRAR) stood at 29%, significantly above regulatory requirements. The company also reported a debt-to-equity ratio of 2.2 times and liquidity reserves exceeding Rs 950 crore.
In a statement, Oxyzo said it remained adequately capitalised and continued diversifying its borrowing profile across banks, NBFCs and capital market instruments. Its lending relationships include State Bank of India, Federal Bank, IndusInd Bank, IDFC First Bank, Axis Bank, Kotak Mahindra Bank and SIDBI.
Costs Rise Faster
While revenue and profits continued to grow, expenses increased at a faster pace. Total expenditure climbed 31% to Rs 989.2 crore during FY26. Finance costs remained the largest component, rising 37% year-on-year to Rs 599.2 crore as interest rates and borrowing requirements increased.
Employee benefit expenses also rose 28% to Rs 183.6 crore, reflecting investments in talent and organisational expansion.
The gap between revenue growth and expense growth partly explains the relatively moderate increase in profitability compared with the expansion in lending operations. Such trends have become common across the NBFC sector, where higher funding costs have affected margins despite strong credit demand.
Diversification Moves
Beyond lending, Oxyzo spent FY26 laying the groundwork for a broader financial services platform.
In May this year, the company announced the acquisition of GoldenPi Technologies and GoldenPi Securities through a share-swap transaction valued at Rs 42.4 crore. The acquisition is expected to strengthen Oxyzo's debt capital markets business and enhance its fixed-income investment offerings for retail and high-net-worth investors.
The lender also entered the alternative investment and fund management space. It launched Oxyzo Credit Fund I (OCF-I), a performing credit fund, and established Oxyzo Investment Manager Private Limited to manage investment products.
Industry observers view these initiatives as part of a larger effort by financial services companies to diversify revenue streams beyond traditional lending businesses. Capital market products, wealth management services, and alternative investments have emerged as attractive opportunities for lenders seeking to deepen customer relationships.
Structural Changes
The company also undertook significant internal restructuring during the year.
Its amalgamation scheme involving quick-loans subsidiary Z-First received approval from the National Company Law Tribunal (NCLT) and became effective in March 2026. Oxyzo is now pursuing a fast-track merger process involving the wholly owned subsidiary, which it acquired in 2022.
The lender simultaneously increased its debt fundraising activity. During FY26, it issued non-convertible debentures (NCDs) worth Rs 900 crore, significantly higher than the Rs 553 crore raised in the previous fiscal year.
The stronger fundraising activity reflects growing credit demand as well as the company's efforts to diversify funding sources beyond conventional bank borrowing.
Oxyzo achieved unicorn status following a $200 million Series A funding round led by Alpha Wave and Tiger Global, placing it among a select group of Indian fintech lenders valued at over $1 billion.
Its parent company, OfBusiness, is meanwhile preparing for a proposed $1 billion public offering expected to include both fresh issuance and an offer-for-sale component.
For Oxyzo, the immediate focus appears to be balancing growth with asset quality while building new business lines across investment products, debt capital markets and fund management. As competition intensifies across the lending sector, the company's ability to diversify revenue streams without compromising underwriting discipline is likely to remain a key factor in its next phase of growth.
