Fintech Companies in India: A Study of Financial Performance
Shilpa Lodha and Babu Lal Gedar*
ABSTRACT
As of July 2022, India ranked fourth in terms of worldwide FinTech unicorn strength, with 37 listed Indian FinTech unicorns or firms valued at $1 billion or more. Furthermore, there are currently close to 8,000 FinTech enterprises in India. A growing economy, a broad client base, an underserved population, an abundance of talent, helpful government policies, and large investments, all have contributed to its expansion. As a result, it is appropriate to investigate their financial performance. The current article investigates the financial performance of Indian listed FinTech companies during a three-year period, from 2018-19 to 2020-21, utilizing several financial ratios. In total, 100 FinTech businesses are listed on the NSE, but only 24 have complete data.
It has been found that the majority of FinTech companies use less debt since they have a relatively low debt-equity ratio. RONW, ROCE, ROTA, NPR, OPR, and Cash Profit Ratio were among the profitability ratios examined. A comparison of the cash profit ratio and the net profit ratio found that there were no significant variations between the two. This implied that FinTech firms did not incur significant non-cash expenses. This is encouraging news for investors and lenders. The Kruskal-Wallis test revealed that various financial ratios for different companies differed considerably (inter-company comparison), but no significant difference was discovered among these ratios for different years (intra-company comparison).
