IPO-bound Navi Finserv to raise up to Rs 600 crore via NCD issue

Sachin Bansal, Chairman, Navi

Sachin Bansal's Navi Finserv will be raising up to Rs 600 crore through the issue of secured and redeemable Non-Convertible Debentures (NCDs), the company said on May 17.

In a filing seen by Moneycontrol, the company said that the bonds will be of face value of Rs 1,000 each for an amount aggregating up to Rs 300 crore, with an option to retain oversubscription of up to Rs 300 crore. Navi Finserv is a wholly-owned subsidiary of Navi Technologies.

Sachin Bansal, Chairman of Navi Technologies said during the announcement, "This is almost like a record that is being created that a young company like ours is able to create a debt public issue, something that is usually associated with large mature organisations."

The issue will open on May 23, 2022 and will close on June 10, 2022 and will offer tenors of 18 months and 27 months with yield ranging from 9.57 percent to 9.80 percent.

Navi is the first fintech to announce an NCD issue, while the company is still waiting to go public. Navi filed draft papers with the Securities and Exchange Board of India (SEBI) for a Rs 3,350 crore Initial Public Offering (IPO) in March this year. The company's businesses include lending, general insurance, mutual funds, and microfinance.

The company said it will use 75 percent of the net proceeds of the NCD issue for onward lending and financing and 25 percent will be utilised for general corporate purposes.

The company's plans to go public had come amid uncertainty over its Universal Banking licence application.

Sachin Bansal had founded Flipkart in 2007 with Binny Bansal. The founders exited the company in 2018, and Flipkart was acquired by Walmart in the same year for $16 billion.

In an interview with Moneycontrol dated September 2, 2021, 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.​

In the first nine months of FY22, the company registered a loss of Rs 206 crore with revenues of Rs 719 crore. Navi plans to invest the proceeds of its Rs 3,350 crore planned IPO in Navi Finserv and General Insurance.

Most recently, the company appointed Vidit Aatrey, the founder of social commerce platform Meesho, as an independent director on its board. Overall, the company has four independent directors on its board, including Aatrey, WhatsApp India head Abhijit Bose, Shripad Nadkarni and Usha A Narayanan.