SUMMARY
Since this is entirely a fresh issue, Bansal, who has already invested around INR 4,000 Cr into Navi to date, will not be diluting his stake in the IPO
Navi may explore a Pre-IPO placement of upto INR 670 Cr, reducing the size of IPO by that amount
With this, Navi has become the youngest startup in India to raise money from the public - only four years after its launch
Flipkart cofounder Sachin Bansal’s fintech startup Navi Technologies has filed its draft red herring prospectus (DRHP) with SEBI to raise INR 3,350 Cr through an initial public offering (IPO).
This DRHP filing comes a month after the startup converted itself into a public company, speeding up its plans to list on the Indian stock exchange.
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 be diluting his stake in the IPO. It is also interesting to note that according to the DRHP, Bansal has not drawn any remuneration from the IPO-ready company.
According to the draft papers as seen by Inc42, Navi may explore a Pre-IPO placement of upto INR 670 Cr, reducing the size of IPO by that amount.
The funds raised 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 has been saved for use in general corporate purposes.
With this, Navi, which operates across segments such as lending, insurance and mutual funds, has become the youngest startup in India to raise money from the public – only four years after its launch. It has been unseen for any Indian startup to raise money from the public in such a short time.
Inc42 analysis suggests that the average age taken by Indian startups to list in 2021 was 15.3 years, with Fino Payments Bank being the youngest at four years. More correctly though, Fino Payments banks had established its presence in 2006 via Fino PayTech.
Not just in India, but overseas as well, the median age of tech startups that went on IPO globally in 2021 has been 12 years.
Navi has appointed ICICI Securities, BofA Securities, Edelweiss, Credit Suisse, LinkIntime and Axis Capital as its bankers to help float the IPO.
Founded by Bansal and his former Flipkart colleague Ankit Agarwal in 2018, Navi operates in lending, general insurance, mutual funds and microfinance. Navi offers health insurance cover ranging from INR 2 Lakh to INR 1 Cr for individuals and families.
It later launched a monthly subscription EMI-based insurance product instead of the usual annual premium that insurance providers demand starting as low as INR 240 per month.
In June 2021, Navi Mutual Fund announced the launch of the Navi Nifty 50 Index Fund, its first-ever mutual fund (MF) product. Later, in December 2021, it submitted draft documents to the markets regulator SEBI to launch its blockchain index fund of fund (FoF).
Bansal-led Navi Technologies turned profitable in FY21. The startup posted a profit of INR 71 Cr in FY21, a significant improvement after incurring a loss of INR 8 Cr in FY20. The four-year-old startup saw its total income rise by 252% from INR 221 Cr in FY20 to INR 780 Cr in FY21.
Further, Navi is also awaiting approval from the Reserve Bank Of India for a universal banking license.
While Navi competes against insurtech heavy giants such as Policybazaar, Digit, newly turned unicorn Acko in the insurance space, it competes against the likes of Paytm, Groww, Upstox, and Zerodha in the mutual fund space too.
The overall fintech market has been witnessing a major boom. According to an Inc42 analysis, Indian fintech startups raised $7.97 Bn across 280 funding deals last year.
