Exclusive | SBI’s largest BC partner SAVE Solutions eyes IPO in FY25

SAVE Solutions, the largest business correspondent (BC) partner of State Bank of India (SBI), plans to go public in fiscal 2025, its top official said.

“We are planning to launch an IPO (initial public offering) in the 2024-25 financial year which will totally depend on the situation of the market sentiments,” the company’s managing director and chief executive officer (MD & CEO) Ajeet Kumar Singh told Moneycontrol on Friday, September 16.

Business correspondents act as a last-mile touchpoint for banks that are unable to set up branches in remote areas. These touchpoints allow bank customers to undertake various banking transactions including withdrawal of cash and money transfer.

In exchange for providing banks’ services to its customers, BCs charge a predetermined minimum fee per transaction to the respective lender.

SAVE solutions, based out of Gaya, Bihar, started operations in 2009. In FY21, SAVE Solutions’ BC business clocked in a total transaction value of Rs 41,000 crore, Singh said. According to him, for SBI, SAVE Solutions undertakes about 500,000-600,000 transactions per day amounting to nearly Rs 200 crore.

Per the Indian Banks’ Association (IBA) website, there are a total of 285 registered corporate BCs in India.

Further, the firm also plans to go for another round of equity capital raising from institutional investors, Singh said.

“We are also planning to raise the third round of equity and we have already started the process. Microfinance portfolios will definitely grow very fast… Other portfolios will also grow as per the business plans. So this is a good trend,” Singh added.

As per Singh, SAVE Solutions works with banks including SBI, Bank of India (BOI), Bank of Baroda (BoB) and Punjab National Bank (PNB) as their BC partner, and serves about 4 lakh customers on a daily basis.

“We are the largest business correspondent of the State Bank of India having 9,000 CSPs (customer service points), and are present pan-India. We have a presence of like 1,200 CSPs for BOI. We have 500 CSPs for BoB. We have just started with PNB six months back, so have 300 CSPs for them and are also working with the two RRBs (regional rural banks),” Singh said.

According to Singh, state-run banks now want to use the BC network in not just banking transactions but also to source loans.

“BCs have a wide scope because banks nowadays are looking at BCs in a different way. Banks like SBI have tied up with us for loan sourcing, loan collections, from agriculture to sales and agriproducts and loan products through our CSP network,” Singh said.

When asked whether digitisation of banking services poses a threat to the BC model, Singh said that even though online transactions are increasing, digital platforms have a higher presence and are more widely used in urban areas but 95 percent CSPs are in rural areas.

“The rural area users are not very friendly with digital payment methods. They all are more into cash payments and transactions,” he said.

Singh said that SAVE Solutions was open to acquiring broking agencies and other non-banking financial companies (NBFCs).

“We are looking for both organic and inorganic growth with a primary focus on organic growth. We are open to acquiring broking agencies and other NBFCs, but it totally depends on valuation,” he said.

As of the end of June, SAVE Solutions had a network of over 12,000 CSPs covering 21 million rural customers in 28 states and 3 Union territories, according to a company presentation.

“The IPO will likely see participation based on factors including management, valuation, floor price and scope of expansion, among others. It totally boils down to what is going to be valuation and floor price,” said Gaurang Shah, chief investment strategist at Geojit Financial Services.