Mukul Agarwal Boosts Stake in Laxmi India Finance

Ace investor Mukul Agarwal has increased his stake in Laxmi India Finance, a recently listed non-banking financial company (NBFC), to 4.58% as of the quarter ended June 30, 2026. This move signals confidence in the NBFC's scalable business model, which targets underpenetrated markets in Tier-II, Tier-III, and rural areas where formal credit access is limited.

As of the end of FY26, Laxmi India Finance served over 42,800 customers across Rajasthan, Gujarat, Maharashtra, Madhya Pradesh, Uttar Pradesh, and Chhattisgarh. The NBFC offers a diverse range of loans, including MSME, loan against property, and vehicle financing. Its loan book saw a significant 27.4% year-on-year growth, reaching ₹1,626.3 crore, with MSME loans being the primary driver.

The company is actively expanding its physical presence and investing in technology to enhance customer acquisition and loan servicing. Management targets a medium-term AUM growth of 30% CAGR. Additionally, the NBFC has successfully reduced its average cost of funds to 10.8% in FY26 from 11.48% in FY25, supported by its extensive network of over fifty lenders.

Laxmi India Finance demonstrated strong financial performance in FY26, with Net Interest Income rising 38.7% to ₹161.8 crore and Profit After Tax increasing by 38.3% to ₹49.7 crore. The NBFC also improved its return on assets (ROA) to 3.08%. Despite a rise in Gross Non-Performing Assets (GNPA) to 2.13% in FY26, management attributes this partly to a single large borrower default.

The stock's valuation appears attractive, trading at a PE of 11.8x and a PBV of 1.26x, both below industry medians. While the company's growth and financial performance are robust, investors are advised to monitor asset quality closely. The stock is currently recommended for watchlist consideration.