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36 Capital management |
Objectives, policies and processes of capital management
For the purpose of the Group’s capital management, capital includes issued equity capital, securities premium and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Group’s capital management is to maximise the shareholder value. The Group manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants.
The cash surpluses are currently invested in income generating debt instruments (including through mutual funds) and money market instruments depending on economic conditions in line with the guidelines set out by the management. Safety of capital is of prime importance to ensure availability of capital for operations. Investment objective is to provide safety and adequate return on the surplus funds.
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(₹ In Crore) |
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Particulars |
As at 31 March |
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2025 |
2024 |
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Equity |
35,188.75 |
28,962.42 |
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Less: |
Tangible and other assets |
4,314.78 |
3,869.82 |
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Working capital (excluding investments) |
1,960.10 |
(1,642.49) |
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Investments in subsidiaries/associate |
3,688.27 |
4,820.40 |
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Investments in debt and similar investments |
25,225.60 |
21,914.69 |
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No changes were made in the objectives, policies and processes of capital management during the year.
(i) Capital Management of Financial Service Business
The Company actively manages its capital base to cover risks inherent to its business and meet the capital adequacy requirement of RBI. The adequacy of the Company’s capital is monitored using, among other measures, the regulations issued by RBI. The Company’s objective is to maintain appropriate levels of capital to support its business strategy taking into account the regulatory, economic and commercial environment.
The Company aims to maintain a strong capital base to support the risks inherent to its business and growth strategies. The Company endeavours to maintain a higher capital base than the mandated regulatory capital at all times. The Company’s assessment of capital requirement is aligned to the mandatory regulatory capital and its planned growth which forms part of an annual operating plan which is approved by the Board and also a long range strategy. These growth plans are aligned to assessment of risks- which include credit, liquidity and market.
The Company monitors its capital to risk-weighted assets ratio (CRAR) on a monthly basis through its assets liability management committee (ALCO).
The Company endeavours to maintain its CRAR higher than the mandated regulatory norm. Accordingly, increase in capital is planned well in advance to ensure adequate funding for its growth.
Further, the Company makes investment in Fixed deposits in banks and in mutual funds during the year. These investments are funded by the Company through its equity share capital.
(ii) Regulatory capital
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(₹ In Crore) |
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Particulars |
As at 31 March |
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2025 |
2024 |
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|
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Tier I capital |
2,316.43 |
236.88 |
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Tier II capital |
55.44 |
3.10 |
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Total capital (Tier l + Tier ll) |
2,371.87 |
239.98 |
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Risk weighted assets |
9,994.45 |
1,153.42 |
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Tier I CRAR |
23.18% |
20.54% |
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Tier II CRAR |
0.55% |
0.27% |
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CRAR (Tier I + Tier II) |
23.73% |
20.81% |
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