Built to Endure

Dear Shareholders,

Over the past eight years, Apollo Finvest has taken a very different path from many fintech peers. We haven’t chased breakneck growth. We haven’t raised large VC rounds. And we haven’t made decisions to look good in a single quarter.

Instead, we’ve chosen to build something that lasts.

A Young Industry in Turmoil

Digital lending is barely a decade old. In 2018, there was no playbook. The core questions were basic: Will digital underwriting work? Will the models hold? Can we balance risk and customer experience? Nobody knew. So we iterated. Fast.

Then came the gold rush. Once it became clear there was a viable business model, lending became a “feature” bolted on to every app—from e-commerce to food delivery to ride-hailing. Everyone jumped in.

And then came COVID. A moratorium hit the industry like a wave. Many new entrants folded. The ones that survived had strong fundamentals—or got lucky.

What followed was chaos: cybercrime units, police departments, and regulators all scrambled to shut down unlicensed, unethical lending apps. It was whack-a-mole. Unfortunately, many legitimate companies got caught in the confusion.

Clarity finally came in the form of the RBI’s Digital Lending Guidelines. These new rules cleaned up the ecosystem and restored order. But they also introduced a 5% FLDG cap, which forced the industry to rewire its business models—again.

Through All This, We Chose Survival Over Hype

Apollo didn’t chase trends. We focused on staying alive. Because in financial services, survival comes before scale. And survival is a value—not a weakness.

Surviving teaches you. It compels discipline. It forces clarity of thought. And over time, it builds something no funding round can buy: deep institutional memory.

While others overpromised and crumbled, or inflated metrics to look good, we stayed true to our fundamentals. Some of the most prominent names in fintech—backed by top-tier VCs—no longer exist or are running at ROEs lower than a bank fixed deposit. They may still claim profitability. But as shareholders, you know: ROE is the truth. Valuations, hype, and vanity metrics are not.

We’ve Delivered Quietly—but Powerfully

Apollo’s Return on Equity over the last 7–8 years has consistently been in double digits. That’s not by accident. That’s a result of staying focused, not getting distracted, and building systems and teams that understand risk.

We’re proud of that track record. And we’re even prouder that we’ve done it without compromising our values, without overextending ourselves, and without needing to write dramatic turnaround stories.

Sometimes, Time Itself Is the Advantage

Warren Buffett once said that staying in the game long enough gives you the chance to get lucky—because eventually, someone might invent something that makes your business dramatically more valuable.

That’s exactly what happened with Apollo.

We’ve been a registered NBFC for over 40 years. For decades, we operated in a traditional lending environment. But around 8–9 years ago, three things happened at once—none of which we could have predicted, and all of which changed our trajectory.

First, my wife Diksha decided to join Apollo. Her background was pure finance. She’s an MBA, a CFA charterholder, and had previously worked at HDFC Ltd—arguably the gold standard in Indian lending. She brought with her the discipline, structure, and risk-first thinking that is often missing in fast-growing tech-led businesses.

Then, digital lending emerged. A completely new model that rewarded agility, technology, and speed. Suddenly, our NBFC license, our operational history, and our willingness to evolve became real advantages.

Finally, I decided to enter the business. My background was not in finance—it was entirely in tech. I’d been part of the founding team at Hotstar. I co-founded PharmEasy. I’d spent my career building digital-first businesses from the ground up. I wasn’t the typical NBFC guy—but that turned out to be a strength.

These three threads—technology, traditional finance, and digital disruption—all came together at the exact same time.

And when they did, Apollo was ready.

We didn’t predict these shifts. We didn’t invent the digital lending revolution. But because we had stayed the course—through decades of slow, steady lending—we were in the right place, at the right time, with the right foundation. That convergence of timing, experience, and readiness has been a major factor in how Apollo has evolved—and in how our stock has performed over the past decade. I yet remember it was sub 20-30 rupees when Diksha and I entered the business.

This is what long-term thinking looks like. It’s not always flashy. It doesn’t always follow a straight line. But if you stay focused, stay prepared, and stay principled, the compounding eventually shows up—in resilience, in returns, and in reputation.

The Advantage of Going Slow

Today, when we look at new partnerships with fintechs or NBFCs, our pace has intentionally slowed down. Why? Because we’ve become far more diligent. The number of credible players in the ecosystem has decreased. While there are perhaps 20–30 interesting apps or lenders out there, the number of partners we’re excited to go deep with is even fewer.

Our approach is simple: we don’t do superficial partnerships. If we pass someone through diligence, it’s because we see the potential for something big—and we start with a meaningful capital commitment. That said, our tech integration is still a huge differentiator. Once diligence is complete, integration typically takes 1–2 weeks. That’s a massive edge over traditional lenders, where integration timelines can stretch 6–8 months. This continues to be one of Apollo’s strongest advantages.

Second Mover Advantage

We’ve also learned something else over time—this industry doesn’t reward being first. On the contrary, we firmly believe digital lending is a space where second movers win. It pays to wait. It pays to watch what works—and what doesn’t.

Even today, after nearly a decade, digital lending is still in an experimental phase. There is no business model that has 100% proven to be successful at scale. The biggest proof point for success—Return on Equity—continues to elude most players. Even the so-called winners in the space are operating at low single-digit ROEs, somewhere in the 5–6% range. And higher ROEs are often reserved for those charging extremely high interest rates, which may not be sustainable.

So, we’re still in a phase of learning. Business models are evolving. Regulations are in flux. The market is huge, but the winners are not obvious. And in this environment, restraint and patience are underrated strengths.

We’ve seen the cost of rushing in. Companies like ZestMoney and LendingKart went fast, built big AUMs, but didn’t get their unit economics right. One faded, the other was acquired at a fraction of expectations. Momentum without margins is a ticking time bomb.

This isn’t like the rest of tech, where you can innovate first and figure out regulations later. In lending, the regulator always goes first—and if you jump the gun, the RBI will come down hard. We’ve seen what happened with companies like Navi and DMI. If you’re ahead of the rules, you’re not seen as an innovator. You’re seen as non-compliant. And that’s a label you don’t want.

At Apollo, we’ve always believed that in digital lending, there is no such thing as first-mover advantage. In fact, we’ve seen time and again that going in too early, before the rules of the game are clear, often leads to massive course corrections down the road. That’s not a risk we’re willing to take. We prefer to be second movers—watching how things unfold, learning from the missteps of others, and only then placing our bets with clarity and conviction.

This is not a philosophical stance. It’s a strategic one. When you move after the dust settles, you have the benefit of hindsight. You’ve seen where the cracks are. You know what the regulator is focused on. You understand which customer segments are working—and which aren’t. And more importantly, you know what kind of unit economics are actually sustainable.

This approach has saved us from making costly mistakes. It has allowed us to allocate capital with confidence. And it has kept us aligned with the one metric that really matters in financial services: ROE. Because in lending, scale without profitability is a ticking time bomb. We’ve seen companies with large AUMs but broken economics either get wiped out or get acquired at distressed valuations.

So we’ve built patiently. We’ve waited for regulatory stability. And for much of the last year, we moved more capital towards term loans—partly to insulate ourselves from the volatility. Term loans gave us a cushion while the dust settled. And now, as the regulatory environment begins to stabilize, we’re gearing up to expand deeper into co-lending, BC, and other borrower-facing models.

Looking ahead, we believe the ability to underwrite borrowers is going to improve dramatically over the coming years. This isn’t just a hope—it’s a function of infrastructure that’s already in place. The Account Aggregator framework, for example, is a game-changer. It allows lenders to securely and responsibly access a borrower’s financial data—from investments to bank statements—in a privacy-first, consent-driven manner.

Add to that the growing digital footprint of Indian consumers. As the country becomes increasingly online, borrowers are leaving behind vast amounts of digital signals—how they spend, where they earn, how they save. These are valuable inputs for underwriting. Modern digital lenders who know how to harness this data—who can plug into the AA ecosystem, build strong data pipelines, and apply intelligence on top—will have a significant edge.

More data means sharper credit models. Sharper credit models mean better risk-based pricing. And that leads to lower losses and higher ROEs. The ecosystem as a whole becomes stronger. But the real advantage will go to those who invest in building the technology and processes required to make sense of all this information. At Apollo, we’re already laying those foundations.

Our Philosophy Remains Unchanged

We will continue to play the long game. You may not see explosive growth every quarter. But when the conditions are right—when the regulatory and economic winds align—Apollo will be perfectly positioned to scale. And when we scale, it will be from a place of strength.

We have accumulated the knowledge. We have built the rails. We know our customer. And we know how to deliver ROE without taking reckless bets.

To our long-term shareholders: thank you. You understand that real value takes time. If your philosophy aligns with ours, strap in—we’re in for an amazing ride.

If it doesn’t, we respect that. The beauty of being a public company is that anyone can get on or off the ride. We hope to win you back when you see what we build over the next 40 years.

We’re not in the business of making noise. We’re in the business of building a company that lasts.

Onwards,

Mikhil Innani Managing Director, Apollo Finvest