Emerald Finance - Revolutioning employee finance (EWA)

Stock Opportunities Untested - but worth a good look
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About the Company

Emerald Finance Limited is an Indian non-banking financial company. Originally incorporated as Emerald Leasing Finance and Investment Company Limited in 1983, it rebranded to its current name in April 2023 to reflect its evolving business focus.

Headquartered in Chandigarh, Emerald Finance specializes in retail and MSME lending. Its product portfolio includes personal loans, business loans, machinery loans, home loans, loans against property, invoice discounting, and microfinance. The company also offers a digital product called Emerald Early-Wage-Access (EWA), which provides employees with on-demand salary access, allowing them to withdraw a portion of their earned wages before payday.

Through its subsidiary, Eclat Net Advisors Private Limited, Emerald Finance acts as a loan origination platform for over 40 financial institutions across India.

Service Offerings

1) Lending: The company is a non-deposit-taking NBFC, focused on retail and MSME lending. It acts as a loan origination platform for 40+ financial institutions including SBI, Canara Bank, Yes Bank, Axis Finance, etc via its subsidiary, Eclat Net Advisors. It has also broadened its offerings to include personal loans and business loans. The company had NIL NPAs during 9M FY25.

2) Early-Wage-Access: In FY24, the company launched a digital lending solution for Early Wage Access (EWA), offering salary advances through employer partnerships. It secured 40 partnerships, with 31 active as of the third quarter of fiscal year 2025. The EWA program was expanded to include 250+ brand vouchers from companies like MakeMyTrip, Amazon, Zomato, etc. As of Q3 FY25, the company has processed Rs. 46 Cr in salary advances.

Focus

Emerald Finance’s Early Wage Access (EWA) product is rapidly gaining traction as a key offering in the employee financial wellness space. As of March 31, 2025, the company had secured 62 active employer partnerships, surpassing its projections for the year. Management now aims to scale this to 250 partnerships in FY26, reflecting strong market demand and confidence in the product. EWA enables employees to access a portion of their earned salary before payday, a concept well-established in the US and EU and now increasingly adopted in India, Indonesia, and the Philippines.

In March 2025 alone, disbursals crossed ₹3 crore, exceeding the ₹2 crore projection, with an average ticket size of ₹25,000 and approximately 30 daily active users. Positioned at the intersection of technology and financial inclusion, EWA is becoming central to Emerald Finance’s broader strategy to offer responsible, employer-backed credit access to working professionals.

Product Portfolio & Business Model

a. Earned Wage Access (EWA)

  • Nature: Short-term personal loan (28-30 days), deducted from next payroll.
  • NPA Classification: NPA, if any, is on employee, not employer.
  • Pricing: Employee pays a fee (not employer); “APR, so this one does not fit in line with what the banks can do.”
  • Competitive Positioning:
  • Full-stack model: Distribution, technology, lending all in-house; not dependent on LSP/fintech partners.
  • EWA is used as a “customer acquisition tool” to cross-sell higher ticket loans (personal, vehicle, business loans) via subsidiary ShubhBank.
  • Engagement: 10-12% of employees in partnered corporates use EWA, with 80-85% repeat usage.

b. Bill/Invoice Discounting

  • New Strategic Partnership:
  • Tie-up with Baya PTE Ltd. (Singapore) for invoice discounting.
  • Targets suppliers to large anchors (JSW Steel, Delhivery, PVR, Reckitt & Coleman, Haldiram).
  • Not a vanilla product: Baya acts as LFC and technology platform; stringent due diligence, only AA+ anchors, 6-month proven track record required.
  • Margin: “They get about 17% and 50% of the processing fees net.”
  • Rationale: Cross-sell to corporates already onboarded for EWA; underwriting already done.

c. Other Lending

  • Loan Book (as of 31 March 2025):
  • Total: Rs. 80 crore
  • Business Loans: Rs. 77 crore
  • EWA: Rs. 3 crore
  • All loans are unsecured; cross-sell includes both secured and unsecured via own book and DSA.
  • Gold Loan:
  • Distribution for HDFC, ICICI, and soon RBL; not impacted by recent RBI guidelines.

d. Technology Stack

  • In-house Tech: 5-member IT team, fully in-house platform.
  • Business Continuity:
  • Robust disaster recovery; “can go live with the entire data in less than 12 hours.”
  • Compliance with RBI IT norms.
  • Mobile App: Approved by Play Store, launch imminent.

Financial Performance

  • Q4 FY25 (Consolidated):

  • Total Income: Rs. 6.5 crore (vs. Rs. 3.9 crore YoY)

  • Net Profit: Rs. 2.65 crore (vs. Rs. 1.14 crore YoY, +132%)

  • Q4 FY25 (Standalone):

  • Total Income: Rs. 4.6 crore (vs. Rs. 2.02 crore YoY)

  • Net Profit: Rs. 2.16 crore (vs. Rs. 0.63 crore YoY, +246%)

  • FY25 (Consolidated, Full Year):

  • Total Income: Rs. 21.63 crore (vs. Rs. 13.36 crore YoY)

  • Net Profit: Rs. 8.89 crore (vs. Rs. 4.14 crore YoY, +114%)

  • Asset Quality:

  • “NPAs are absolutely zero” for FY25; historically <0.5% over last 3 years.

  • Management is focused on keeping delinquencies “very low,” even at the cost of growth.

  • Revenue Mix:

  • 48% from interest income, balance from fee-based (processing, DSA, customer charges).

Industry Outlook & Management Commentary

  • Industry Trends:

  • NBFCs have 22% share of credit market; projected 17% growth in FY25.

  • Digital lending expected to be 60% of Indian tech market by 2030.

  • Competitive Moat:

  • “Only four major rivals” in EWA in India; Emerald claims end-to-end control, zero delinquencies, and robust tech as differentiators.

  • Risk Appetite:

  • Conservative stance: “We do not want to take extraordinary risk at this stage.”

  • Growth will not come at the expense of asset quality.

  • Vision:

  • Ambitious scaling: Targeting 1,000 corporates in EWA over time.

  • EWA as a “Bajaj Finance consumer durable” equivalent—acquisition channel to build credit history and cross-sell.

Guidance & Outlook

  • FY26 Targets:

  • 250 EWA partner corporates.

  • EWA disbursement: Rs. 15 crore by March 2026.

  • Business loan book: Rs. 110+ crore.

  • Maintain zero/very low NPA.

  • ROE:

  • Currently at 10.8%; management prefers low-risk, low-leverage model.

Key Risks & Threats

  • Ticket Size & Scale:

  • EWA is a small-ticket, high-volume business; scaling requires significant volume growth.

  • Concentration:

  • Business loan book still dominates AUM; EWA is only ~4% of total book as of FY25.

  • Execution:

  • Success depends on ability to onboard and activate large number of corporates and drive usage among employees.

  • Competition:

  • While only “four major rivals” for now, the space may attract larger NBFCs/banks in the future.

  • Regulatory:

  • EWA operates in a regulatory grey zone; management claims compliance with RBI norms, but regulatory risks remain.

Conclusion

Emerald Finance has delivered robust financial performance in FY25, underpinned by rapid scaling of its EWA product and prudent risk management. The company is leveraging technology and a full-stack business model to create a differentiated position in digital lending, with strong cross-sell synergies via its DSA subsidiary. Management is highly optimistic about the future, targeting aggressive expansion in EWA and invoice discounting, while maintaining a conservative risk posture and zero NPA. Execution on scaling, maintaining asset quality, and leveraging its capital base will be key to sustaining its growth trajectory.

Disc: Invested 1.5% of my portfolio.

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The company posted great set of numbers. The management reiterated its confidence in increasing profits by 8 to10 times in the next 3 years.

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Great coverage on Q4 FY2025 results and future outlook. It will help understand the business better.

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INVESTI GLOBAL OPPORTUNITY FUND sold 2.20% (760,237 shares) in the open market in the month of May, effectively reducing their total holding to 5.42%.

Liquidity will increase, I guess they are getting braced to get out of the ESM framework. It will be interesting to see next month’s shareholding data

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they dumped 0.59% more in open market in first week of June

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The stock is slowly sliding down, any other reason than stake sale from Investi Global?
Disc: Invested

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I don’t think so. It should stabilize around 80 and start its upward journey soon!

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There’s no specific reason, this is just how the market behaves. Even during a recovery phase, the index may go up by 2 points while your portfolio rises by only 1. Likewise, a portfolio or stock might climb 2 points and then fall 1 point.

As for Emerald, the company is performing well based on its trailing twelve-month (TTM) and quarterly profits. It’s also expanding its Early Wages program, so these temporary declines are still acceptable.

There’s no definitive way to say it will stabilize at 80. However, we can estimate a possible support zone based on previous levels — it could be 80 or even 68.

If you’re a long-term investor, short-term price movements aren’t very significant. Still, value buying and averaging remain important strategies.

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Absolutely. Started buying back the shares that I sold at peak. It is almost half the price at peak after splendid results.

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I think they are preparing to get out of ESM framework soon, infusing liquidity in the market and all. It was, as it is, one foreign martius-based fund holding over 7% of a company which was quite sus in the first place.

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Does anyone have access to their competitor’s (Refyne’s) financial statements

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Check Tracxn. They have the data.

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also theres Jify among their competitors, can you share its data as well?

(https://tracxn.com/d/companies/jify/__VkAkK-qcTiSlkjGpKiAmq7Qs1VOlweJpylm_H4j1Gnk jify)

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These are the few other competitors who are in a very similar business line

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Jify which was backed by the likes of Accel and Nexus VP is acquired by Money View (which is a Unicorn, a series E stage company). Here’s a quick snapshot of Jify’s financials:
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Refyne is a series B stage startup with the backing of again renowned investors like RTP Global, DST Global, Tiger Global etc.. someone has already uploaded it’s financial snapshot earlier in the replies.

The others Kaarva and Myfinfi are seed stage startups that aren’t doing too well imo from what I’ve seen and lastly Dhannam is unfunded with no reporting on its financials.

Hope this helps to understand the competitive landscape a little bit..

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There’s also one post that I came across on Refyne by Nishant Mittal on Linkedin, that got me thinking and I am copy-pasting it here just to think together with you all on this:

"Here’s a genuine question for Tiger Global, and a fun guesstimate for everyone else. A good exercise!

There’s a company called Refyne. It provides something called “Earned Wage Access”, i.e. a feature where companies can enable their employees to withdraw a part of salary before payday. Refyne charges INR 9 to 199 for a withdrawal, and that’s about it.

How big do you think this company (or market) can become? You could stop reading and think on your own before you read my math.

Okay. So, Earned Wage Access is a cool concept. Has a lot of benefits. Can help people avoid credit card/personal loan debt. It’s only for employees in the formal sector, obviously. Though Gig workers can also benefit from it.

Now as per PLFS, India has some 31 million people in the formal sector.

  1. 12% of these earn less than INR 5K/month, 45% make less than 10k
  2. 25% make over 20k a month. 3% make 50 - 100K, and 0.2% make over 1 Lakh

Total number of people in Gig economy are 15 Million (says Niti Aayog). Their pay varies, but it’s in the range of 10k - 30k, mostly.

Now if given a chance by their employer, how many people will pay INR 9 to 199 to withdraw their salary before payday? And how many times will they do that in a year? That’s the market.

My guess is that 5% of the entire universe mentioned above (46 Million people) could use it. Why 5%? Since only 45% make over 10k a month (and 25% over 20k), I guess only 30% of the entire market can even be considered in the fray. Trusting the young startups’ supernatural abilities, I’d believe that 20% of those will be convinced to become regular users of this product. It’s super high, but okay.

So, that gives us 2.3 Million people. I’ll say all of these will use this product about 5 times a year. With the average transaction value coming out to be INR 100. All this is really high, I know, but let’s go with it.

2.3 Mil * 100 INR * 5 = Approximately 100 Crores. This is the total revenue potential of this business model.

Now I’ll further assume that I’m missing out on a few important catch points (and also am a total retard). I’ll multiply this by 5.

100 Cr * 5 = 500 Crores.

Now, I’ll further assume that entire Team Refyne will be on Cocaine throughout the office hours and will manage to capture 100% of the above market. So,

Refyne’s revenue potential = 500 Crores/year.

Kotak Mahindra has a revenue multiple of 6x, I’ll give the same to Refyne at the hypothetical point of 100% market share.

Refyne’s valuation = 3000 Crores.

Now Refyne is an 18 month old company, WHICH HAS ALREADY RAISED $105 MILLION (840 CRORES), supposedly at the above valuation.

My question to Tiger Global is this: What am I missing here? What exactly is the thought behind this? Is the above logic totally wrong?

And most importantly, do you have five minutes for a pitch?"

"I wrote an analysis on the company six months ago, highlighting the hypothesis behind the TAM calculation. The article was praised by many, but also questioned by some who said, “I’m sure the investors who put in those dollars know more than you”.

Well, that was obviously a BS argument. And now it’s settled because I’ve come to know that Refyne has begun “restructuring” its operations. A lot of people fired and what not. Sad scene.

The good news is that since the company has raised over INR 840 Crores, there’s a lot of cash in the bank to FA and FO (fool around and find out). They could just do something new! But that won’t be anyway close to the original business model for which it raised all that money. It’s like Ola. Started with Cab aggregation. Fucked it up. Moved on to making Scooties. How? There’s a lot of money in the bank, yo! Haha!

All hats off to Tiger Global for making this terrific investment. True heroes. Can someone connect me to them? "

TL;DR - BASICALLY IS THERE NOT A BIG ENOUGH POTENTIAL REVENUE TO BE EARNED DOING THE EWA BUSINESS?

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