Sachin Bansal-Led Navi Finserv Seeks To Raise INR 600 Cr Via Bond Issuance

Sachin Bansal’s fintech unicorn Navi Finserv is planning to raise up to INR 600 Cr via issuance of Non-Convertible Debentures (NCDs) to fuel its business growth.

The total issue size includes a green shoe option of up to Rs 300 crore to retain oversubscription, the company said in a statement.

The secured, rated, listed NCDs will have tenors of 18, 27, and 36 months and offer effective yields between 10.47-11.19% per annum, it added.

The issue would open for subscription from February 26 onwards.

The fresh funds will be used for onward lending, financing, loan repayment and general corporate purposes.

Bansal said, “After successfully concluding and raising over INR 950 Cr cumulatively in our last two issuances, we are pleased to announce the launch of Navi Finserv’s third public debt issue that goes live on February 26, 2024. The funds raised through this will be used for onward lending, financing, loan repayment, and other general corporate purposes.”

“Our long-term focus is on utilising technology and data science capabilities to enhance our customer experience, offering them an integrated ecosystem of financial services, while we also continue to increase reach across India and foray into new product lines,” he added.

This is the third capital raise through NCDs in the last two years by Navi Finserv.

The company concluded its maiden Public Issue I and II of secured, rated, listed and redeemable non-convertible debentures under the SEBI NCS Regulations and raised approximately INR 495 Cr in FY 2023 and INR 481 Cr in FY 2024.

Navi Technologies’ subsidiary Navi Finserv reported a net profit of INR 172 Cr in the financial year 2022-23 (FY23) as against a loss of INR 67 Cr in the prior fiscal year. Navi Finserv had posted a net profit of INR 97.5 Cr in FY21.

The startup’s operating revenue also surged 2.8X to INR 1,283 Cr in the reported period from INR 457.1 Cr clocked in FY22.

The key subsidiary of IPO-bound Navi Technologies was co-founded by Bansal and Ankit Agarwal, focusing on loan products, including personal, vehicle, and home loans. The subsidiary was incorporated on February 14, 2012 and has an NBFC licence. 

Navi Finserv was converted to a public company in March 2022. While publishing its FY23 and June quarter results, the company said its board has approved borrowing up to INR 4,000 Cr by issuance of non-convertible debentures (NCDs) on a private placement basis and up to INR 1,500 Cr via commercial papers (CPs). 

The NBFC’s parent company Navi Technologies incurred a loss of INR 362 Cr in FY22 due to the lacklustre performance of Navi Finserv and its insurance business Navi General Insurance.

Navi’s parent company Navi Technologies filed its DRHP in March 2022 to raise INR 3,350 Cr through an IPO. In September 2022, Navi Technologies received approval from the Securities and Exchange Board of India (SEBI). 

However, the startup has yet to launch its public offering. The entire fundraise will be a fresh issue, meaning Bansal, who has already invested around INR 4,000 Cr into Navi to date, will not dilute his stake in the IPO.

The IPO proceeds will be used to invest INR 2,370 Cr in Navi Finserv (NFPL) and another INR 150 Cr in Navi General Insurance Limited (NGIL). The rest of the amount will be allocated to general corporate purposes. Navi has not disclosed its IPO valuation yet.