Flipkart co-founder Sachin Bansal-led tech-driven financial services startup Navi Technologies, which turned profitable in FY21, has filed papers with market regulator Securities and Exchange Board of India (Sebi) to raise up to Rs 3,350 crore via an initial public offer, sources in the know told Moneycontrol.
On December 8, 2021, Moneycontrol was the first to report Navi’s listing plans.
“It is purely a primary issue of shares with no OFS or offer for sale component. The e-filing has been done with the regulator,” said one of the persons cited above.
A second person said the firm seeks to grow its lending and insurance business. "There could also possibly be a pre-IPO round of up to Rs 670 crore and as of now the plan is to launch the IPO in June-July depending on market conditions,” this person added.
Both the persons spoke to Moneycontrol on condition of anonymity. Navi Tech could not be reached for immediate comment.
According to the firm’s DRHP ( which has been reviewed by Moneycontrol), the Net Proceeds of the IPO would be used towards funding the following objects:
- Investment into its subsidiaries, Navi Finserv Private Limited and Navi General Insurance Limited
- General corporate purposes.
Axis Capital, BofA Securities, ICICI Securities, Edelweiss Financial Services and Credit Suisse are the investment banks working on the Navi Tech IPO. Cyril Amarchand Mangaldas and Indus Law are the legal advisors.
THE NAVI STRATEGY
Navi has opted for the inorganic route in the past to enter segments and its businesses include lending, general insurance, mutual funds, and microfinance.
In 2019, Navi had acquired Chaitanya India Fin Credit for Rs 739 crore and entered the microfinance segment. Chaitanya had also applied for a universal banking licence from the Reserve Bank of India (RBI). According to reports, Navi’s loan book size is about Rs 3,500 crore.
Navi MF had acquired assets of Essel MF in 2021 and the firm had also filed for a blockchain fund last year. It also has a stockbroking licence from Sebi.
In an interview to Moneycontrol dated September 2, Sachin Bansal had said he compares Navi (short for ‘navigator’) to banks and NBFCs.
“We are trying to work backwards and see what a bank for a billion people looks like. It has to be a lot more automated, things have to be a lot more simple, users should be able to help themselves. Banking should be as easy as going on Swiggy and ordering food,” he said.
Bansal added that the company’s microfinance loan book stood at Rs 1,500 crore and non-microfinance loan book at Rs 600 crore. Overall, the startup was disbursing loans worth Rs 350 crore a month, according to him.
In the insurance space, Navi Tech competes with the likes of Policybazaar, Digit and Acko, while in the mutual fund space, it has peers like Paytm, Groww and Zerodha.
Navi Technologies posted a consolidated profit of Rs 71 crore in FY21 and had posted a loss of Rs 8 crore in the previous financial year. With increasing digital adoption during the pandemic, its revenues spiked by 143 percent (Rs 137 crore versus Rs 56 crore on a YoY basis
Total income rose by 251 percent, up from Rs 221 crore in FY20 to Rs 780 crore in FY21. Expenditures also grew by 217 percent from Rs 212 crore to Rs 673 crore year-on-year (YoY).
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