Sachin Bansal’s Navi Technologies Receives SEBI Nod For INR 3,350 Cr IPO

SUMMARY

The markets regulator issued observation letter to Navi Technologies on September 5 in response to its draft offer documents filed on March 14

As per the DRHP, Navi’s INR 3,350 Cr IPO will entirely consist of a fresh issue

The fintech startup will invest INR 2,370 Cr in subsidiary NFPL and INR 150 Cr in NGIL, while the rest of the amount will be used for general corporate purposes

Flipkart cofounder Sachin Bansal-led fintech startup Navi Technologies has received the nod from the Securities and Exchange Board of India (SEBI) for its INR 3,350 Cr initial public offering (IPO).

The regulator issued the observation letter to Navi Technologies on September 5 in response to its draft offer documents filed on March 14, according to a document on SEBI website.

As per the draft red herring prospectus (DRHP), Navi will raise the funds via a fresh issue of shares. A significant portion of the funds raised will be used in its subsidiaries Navi Finserv Private Limited (NFPL) and Navi General Insurance Limited (NGIL).

Navi will invest INR 2,370 Cr in NFPL and INR 150 Cr in NGIL, while the rest of the amount will be used for general corporate purposes.

ICICI Securities, BofA Securities, Axis Capital, Credit Suisse Securities (India), and Edelweiss Financial Services are the lead book-runners for the public issue.

Founded by Bansal and his former Flipkart colleague Ankit Agarwal in 2018, Navi offers a comprehensive suite of financial services solutions across verticals including lending, general insurance, mutual funds and microfinance in a digital-first manner. Its personal loan business, launched in 2020, extends instant personal loans of up to INR 20 Lakh through an entirely digital Navi app-only process.

Navi also offers microfinance loans through a wholly-owned subsidiary under the Chaitanya brand.

The SEBI approval comes as a relief for the startup. In May 2022, the Reserve Bank of India (RBI) had rejected the application of Chaitanya India Fin Credit, a step-down subsidiary of Navi, for on tap universal banking licence.

In the financial year 2020-21 (FY21), Navi posted a profit of INR 71.2 Cr with a total income of INR 780 Cr. However, for the nine months ending December 2021, the startup recorded a loss of INR 247 Cr and a total income of INR 719.4 Cr.

Around 44% of its revenue came from personal and housing loans, while 32.5% of the annual income was generated from microfinance business during the same period.

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