Top 10 facts of IPO from NAVI

Sachin Bansal has been a busy man after a short sabbatical, following his exit from Flipkart. Around late 2018, he began scanning the market to find a perfect sector to startup into. And, within a year, Bansal found an answer to his quest in the financial technology and banking space. Lower income group was an easy target to bring and tap the market.

While Bansal has to wait a little more to procure a universal banking license, he has made a debut as an entrepreneur in the consumer lending space with an app — Navi. The app, at the moment, provides an instant personal loan of up to Rs 2,00,000 with minimal documentation. Navi’s consumer-facing app targets low income-focused groups.

The move is in line with Bansal’s plan to open a digitally-led bank that will primarily focus on lending to individuals, MSME sector and small corporates. 

According to the information provided by Navi on Play Store, it offers a collateral-free loan with a higher limit of Rs 2 lakh for individuals with a monthly income as low as Rs 10,000. Any Indian adult can apply for a loan by feeding in basic details such as PAN and Aadhaar number. Later on they added other financial products like Insurace ,Home Loan mutual funds and so on.

For repayment, Navi provides a flexible EMI option for the consumers. Initially launch on  Android, and later Apple App Store.

With recent count of 1100 plus employees.  Its recent job postings show that the firm is recruiting a few positions in technology-focused development and management verticals.

Formerly known as BAC Acquisitions, Navi Technologies is an about couple of years old firm. The launch of the app came after Bansal had infused over Rs 3,007 crore in the business-focused financial services arm of Navi at the beginning of April. A week later, Bansal was appointed as MD of Navi Technologies and raised its first external investment from Gaja Capital.

The reason behind the acquisition of Chaitanya Rural Intermediation Development Services (CRIDS) has also become evident from Navi’s focus on low-income groups. Over the years, CRIDS has been focusing on disbursing loans targeting borrowers in states such as Jharkhand, Bihar and Odisha.

With the app, Bansal has been able to assemble a big missing element to strengthen his claim for a banking licence. Now, Navi directly competes with NBFCs focusing on B2C loans and indirectly with InCred, Capital Float and a few others.

Navi Technologies is a technology-driven financial products and services company. Since the company's incorporation, it has expanded offerings under the 'Navi' brand to include personal loans, home loans, general insurance and mutual funds

The Securities and Exchange Board of India (SEBI) accepts the proposal from Sachin Bansal's fintech startup Navi Technologies for an Initial Public Offering (IPO), providing the Flipkart co-founder a boost as he works to create a financial services conglomerate.

In March of this year, Navi Technologies submitted draft papers to SEBI in order to raise up to Rs 3,350 crore through a fresh issue of shares. The IPO will not have an offer for sale (OFS) by shareholders, read Bansal who holds a 97.39 percent stake in the fintech.

The fintech firm received an observation letter in response to its filings on September 5, according to the SEBI website.

According to the DRHP, the fintech company plans to invest the proceeds of the IPO in Navi Finserv and Navi General Insurance companies in addition to general expansion goals.

Bansal and Navi Technologies have been contacted by Moneycontrol regarding the approval; a comment is awaited.

The approval is a relief for the fintech firm after the Reserve Bank of India (RBI) rejected its application for a banking licence through its wholly-owned subsidiary Chaitanya India Fin Credit as well as petitions from five other applicants.

Navi Technologies is a tech-driven financial products and services company. Since the company's founding, it has increased its product offerings to include mutual funds, general insurance, house loans, and personal loans. Additionally, it provides microloans via Chaitanya India Fin Credit.

Earnings 

While Navi registered a profit of Rs 71.1 crore in FY21, the company incurred losses to the tune of Rs 206.42 crore in the first nine months of FY22.

Niches 

Microfinance loans are Navi's largest market segment; in Q3 of FY22, the company had assets under management (AUM) worth Rs 1,808 crore. The vertical's gross non-performing assets (NPAs) were 3.83 percent in the same period. Gross NPAs for personal loans were 1.12 percent.

Bansal founded Navi Technologies in December 2018 just six months after quitting his first venture, Flipkart, which was snapped up by Walmart for $16 billion the same year.

Incidentally, Bansal held only 5.5 percent stake in Flipkart before his exit. This stands in stark contrast to Navi, where Bansal holds a 97.39 percent stake, choosing to raise further funds through an IPO rather than through private investors.

Few other line up for approvals 

Go Digit General Insurance, led by veteran insurance executive Kamesh Goyal and backed by Prem Watsa's Fairfax Capital, is still awaiting approval. According to information on the market regulator's website, SEBI has not yet provided observations for the IPO of Go Digit.

Go Digit General Insurance did not comment on the update.

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