BharatPe Picks Up Majority Stake In Trillion Loans, Looks To Bolster Lending Play

Fintech juggernaut BharatPe has reportedly picked a majority stake in Mumbai-based non-banking financial company (NBFC) Trillion Loans Fintech.

People familiar with the development told Livemint that the deal was pegged at about INR 300 Cr. Besides, BharatPe has already secured all necessary approvals from the Reserve Bank of India to acquire a 51% stake in the NBFC. 

The move will enable BharatPe to make major inroads into the lending space as an NBFC licence makes it easier and less cumbersome for a platform to offer loans and credit facilities. It will also allow BharatPe to bypass over-reliance on certain NBFCs and enable it to scale its offerings on its terms. 

Trillion Loans is the brainchild of Achal Mittal and Gautam Adukia and allows users to avail gold loans with direct money transfers. 

Curiously, both Mittal and Adukia also founded the P2P lending platform Liquiloans, which also has a long-standing relationship with BharatPe. BharatPe’s P2P investment product is powered by Liquiloans and has even been in the spotlight for flouting P2P lending norms. Liquiloans also works closely with Kunal Shah-led fintech startup CRED.

While RBI has been cagey about granting NBFC or even P2P lending licences, Liquiloans has the RBI mandate for both such licences.

In its report, Livemint also noted that Achal Mittal is the son of former RBI official Ajit Mittal, who spent close to two decades at the central bank. Ajit Mittal is currently on the board of Indiabulls Housing Finance. 

As per the Registrar of Companies filings, NBFC Trillion Loans reported a profit of INR 74 Lakhs in the financial year 2021-22 (Fy22) against revenue of INR 7 Cr.

Amid all this, the move bodes well for BharatPe, which has been hankering for an NBFC licence for close to four years now. While BharatPe previously, in 2019, unsuccessfully took a stab at acquiring the NBFC licence, the request was rejected by RBI. 

However, the Delhi-based fintech startup found a way around it after it clinched the licence for a small finance bank in June 2021. Subsequently, it entered into a joint venture with Centrum Financial Services and the partnership in the form of Unity Small Finance Bank commenced operations in November 2021.

Since then, it has scaled down on its involvement with the small finance bank and is reportedly only looking to maintain its position as a ‘financial investor’ in the joint venture. 

Since then, it has been a downhill ride for the fintech startup. The company has been involved in a public battle with its former managing director Ashneer Grover and allegations of  misappropriation of funds have gripped the company. 

The public fracas has seen both Grover and the company drag each other to court and have sought damages. The company has also filed a criminal complaint against Ashneer Grover and his family with the Economic Offences Wing (EoW) on 17 charges, including alleged criminal breach of trust, document fabrication, and embezzlement.

BharatPe is backed by marquee names such as Sequoia Capital, and Ribbit Capital, among others and was last valued at $2.8 Bn.