SEBI green signals for Sachin Bansal’s Navi Technologies INR 3.3K Cr IPO

Navi Founder Sachin Bansal

Flipkart co-founder Sachin Bansal-led fintech startup Navi Technologies has received approval from the Securities and Exchange Board of India (SEBI) for an INR 3,350 crore initial public offering (IPO).

The regulator issued a reminder letter to Navi Technologies on September 5 in response to its draft offer documents filed on March 14. According to the draft red herring prospectus (DRHP), Navi will raise funds through a new share issue. A significant part of the funds raised will be used in the 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.
Founded in 2020, its personal loan business extends instant personal loans up to INR 20 Lakh through a completely digital process only through the Navi app.

ICICI Securities, BofA Securities, Axis Capital, Credit Suisse Securities (India) and Edelweiss Financial Services are the lead underwriters for this public issue. Founded by Bansal and 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, digitally.

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) rejected an application by Chaitanya India Fin Credit, Navi’s existing subsidiary, for a universal tap banking license.

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

About 44% of its income came from personal loans and home loans, while 32.5% of its annual income was generated from microfinance during the same period.

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