Ananya Birla’s Svatantra Takes Over Sachin Bansal-Backed Chaitanya

Ananya Birla-led Svatantra Microfin Pvt Ltd has concluded the acquisition of Sachin Bansal-backed fintech startup Navi’s subsidiary Chaitanya India Fin Credit Pvt Ltd. The deal, valued at INR 1,479 Cr, was initially announced in August.

“It’s official!! This marks a significant step as we formally complete the acquisition of Chaitanya. Today, we warmly welcome Chaitanya into the Svatantra family,” Birla announced in an X post.

With assets under management totalling INR 13,000 Cr, this acquisition positions Svatantra as the second-largest NBFC-MFI, following CreditAccess Grameen.

“Svatantra Microfin acquiring Sachin Bansal’s Chaitanya is positive news both for the microfinance sector and Svatantra,” the Microfinance Institution Network had said in a report called India Microfinance Review, released earlier this month.

“The acquisition is synergistic as it gives Svatantra strategic outreach in South India. From the sector viewpoint, while Birla Group’s Svatantra is known for its efficient operations and responsible lending, higher size will further strengthen it and also contribute to higher efficiency through economies of scale,” MFIN said.

Svatantra is an institution that directly disburses loans into customers’ bank accounts, charging an annual interest rate ranging from 19.75% to 24.25% for microloans. Besides, it provides MSME loans at a 23% interest rate.

Bansal, Flipkart’s co-founder, acquired Chaitanya Rural Intermediation Development Services (CRIDS) through BAC Acquisitions (now Navi Technologies) in 2019, marking one of his significant post-Flipkart deals. CRIDS was later rebranded as Chaitanya India Fin Credit, contributing to Navi obtaining an NBFC license. Despite the NBFC experiencing substantial growth in assets under management (AUM), Chaitanya still grapples with various challenges.

Chaitanya’s capital adequacy ratio (CAR) has been a potential headache for the Navi Group, declining continuously between FY19 and FY22. Chaitanya’s CAR stood at 17.38% at the end of FY22, against the minimum threshold of 15% set by the Reserve Bank of India (RBI). 

Chaitanya was a profitable venture, reporting a profit after tax of INR 52.25 Cr in FY22, more than double compared to INR 20.6 Cr in the previous fiscal year. Its revenue from operations grew more than 55% to INR 361.1 Cr in FY22 from INR 233.7 Cr in FY21.