| Onmobile Global Limited | ||||
| Rating downgraded to 'Crisil BBB / Negative' | ||||
| Rating Action | ||||
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| Note: None of the Directors on Crisil Ratings Limited’s Board are members of rating committee and thus do not participate in discussion or assignment of any ratings. The Board of Directors also does not discuss any ratings at its meetings. | ||||
| 1 crore = 10 million | ||||
| Refer to Annexure for Details of Instruments & Bank Facilities |
Detailed Rationale Crisil Ratings has downgraded its long-term ratings on the bank facilities of Onmobile Global Ltd (OGL) to ‘Crisil BBB/Negative’ from ‘Crisil BBB+/Negative’.
The rating downgrade reflects weakening of business risk profile due to subdued operating margins, leading to net losses in fiscal 2025. Operating margins have been volatile in the past with material quarter-on-quarter volatility due to the spread of royalty fees, marketing expenses and nature of different revenue streams across quarters. The company has stable revenue; overall profitability has been lower than expectations in the past two fiscals. While operating margins for Q1 FY 2026 at above 5% have shown improvement; given the track record of quarterly volatility, operating margins are likely to remain under pressure this fiscal and remain a key monitorable.
However, the financial risk profile is adequate, supported by healthy capital structure and low reliance on long term debt with moderate bank limit utilization for the 12 months through August 2025 and sufficient liquidity of over Rs 39 crore as of March 31, 2025. The gearing was low at 0.12 times as on March 31, 2025, and total outside liabilities to tangible networth (TOLTNW) ratio was 0.55 times. Financial profile is expected to remain comfortable over the medium term.
The rating continues to reflect the established market position of the company in the mobile entertainment industry supported by geographic diversification, reputed clientele and healthy financial risk profile. These strengths are partially offset by subdued revenue growth from the traditional risk-based testing (RBT) and videos streaming segments and susceptibility to risks inherent in the mobile entertainment industry. |
Analytical Approach Crisil Ratings has combined the business and financial risk profiles of OGL and its subsidiaries and associates (see annexure for the list of subsidiaries and associate consolidated), collectively referred to as the Onmobile group.
Please refer Annexure - List of Entities Consolidated, which captures the list of entities considered and their analytical treatment of consolidation. |
Key Rating Drivers - Strengths Established market position in the mobile entertainment industry: With presence of over two decades, the group has become a reliable player in the mobile entertainment industry for telecom operators across several geographies. It has a significant presence with over 65.93 crore monthly subscribers and is associated with around 122 customers across 68 countries. Healthy relationships with customers in multiple regions and a large end-user base will continue to support the business risk profile over the medium term.
Moderate financial risk profile: At the group level, capital structure was comfortable owing to lower reliance on external debt, yielding total outside liabilities to adjusted networth ratio of less than 0.55 times in the three fiscals through 2025. Interest coverage and net cash accrual to adjusted debt ratios were healthy at 1.76 times and -0.20 times, respectively, in fiscal 2025. In the absence of any large debt-funded capital expenditure (capex) plan, leverage is expected to remain healthy over the medium term. |
Key Rating Drivers - Weaknesses Muted revenue growth and profitability from the traditional and new age segments: Revenue growth has been muted from the legacy business with the company witnessing 3% CAGR growth over the past 4 years. Onmobile has been investing significantly, especially in the mobile gaming segment, to diversify revenue streams, mitigating the risk. However, significant cost incurrent for licensing fees and marketing has deteriorated the business profile leading to net loss of Rs 41 crore for FY25. Any significant decline in revenue from traditional segments along with delay in scaling up newly added segments may constrain the business risk profile of the company going forward.
Susceptibility to risks inherent in the mobile gaming business and high fixed costs: The mobile gaming business is highly fragmented with numerous players across platforms, highly technology driven, and subject to various regulations. Intense competition constrains profitability and bargaining power with stakeholders; players have to invest significantly in marketing to remain relevant and also invest to avoid technology obsolescence. Any technological disruptions, loss of major customers to competitors or adverse regulatory changes may impact the business risk profile. The group’s longstanding presence with operators, recent investments in new products and technologies, and their strategy to stick to kids and family-friendly games may mitigate these risks.
Most of the expenses are fixed (employee costs, royalties, software and license cost, and marketing expenses); this exposes the company to economic cycles or downturn in revenue. The operating margin fell to -0.27% as of March 2025 from 4.51% in the corresponding period of fiscal 2024 owing to higher fixed cost for software and licenses. |
Liquidity -Adequate Bank limit utilisation is low at around 64 percent for the past twelve months ended August 2025. Cash accrual are expected to be over Rs 20 crore which against nil term obligations. Liquid investments of around Rs.30 crore in as on March 31, 2025. Low gearing and moderate net worth support is financial flexibility and provides the financial cushion available in case of any adverse conditions or downturn in the business. |
Outlook Negative Crisil Ratings believes the credit risk profile of the Onmobile group will remain weak constrained by modest operating margin over the medium term. |
Rating sensitivity factors Upward factors
Downward factors
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About the Company OGL was incorporated in 2000. The company’s key product offerings are ring-back tones, digital content store and infotainment. Digital content store is a one-stop mobile destination for digital content such as videos, games, music and images. Infotainment offers music, content, news and sports to consumers over mobile.
The company has been listed on the Bombay Stock Exchange and the National Stock Exchange and has an office in Bengaluru. It carries out its business through various subsidiaries and associates in various geographies.
It is promoted by California, USA, based OnMobile Systems Inc and managed by Mr François-Charles Sirois (Executive Chairman) and Mr Sanjay Baweja (Managing Director and Global CEO). |
Key Financial Indicators
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Any other information: Not applicable |
Note on complexity levels of the rated instrument: |
Annexure - Details of Instrument(s)
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Annexure – List of entities consolidated
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| Annexure - Rating History for last 3 Years | ||||||||||||||||||||||||||||||||||||||||||||||||||||
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| All amounts are in Rs.Cr. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Annexure - Details of Bank Lenders & Facilities | ||||||||||||||||||||||||
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Criteria Details
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