Sachin Bansal’s Navi Finserv doubles revenue during June quarter

Representative Image

Sachin Bansal-led Navi Finserv Limited revenue doubled during the June quarter while its net profit grew 14% during the same period.

The Bengaluru-based financial services company reported Rs 439 crore in revenue from operations during the first quarter as compared with Rs 220 crore it reported during the same quarter of last year.

The company’s profit after tax for the quarter stood at Rs 26 crore as against the Rs 23 crore it had reported during the June quarter of last fiscal.

Navi Finserv is a non-banking financial company (NBFC) and is part of Navi Technologies, the holding company of Bansal. It disburses personal loans, home loans and loans against property. Under Navi Technologies, he also runs Navi AMC (asset management company), which runs investments like mutual funds, and Navi General Insurance, which runs health and motor insurance.

Last week, Navi Technologies signed an agreement to sell its microfinance institution (MFI) business Chaitanya India Fin Credit to Ananya Birla-led Svatantra Microfin for Rs 1,479 crore. Bansal acquired the MFI back in 2019 for Rs 739 crore.

For the full financial year FY23, Navi Finserv reported Rs 1,283 crore in revenue while its full-year profits stood at Rs 172 crore.

The company has carried impairment provision towards its loan assets amounting to Rs 471 crore as of June 30, 2023, it said in the auditor’s report.

The company’s board has considered and approved the borrowings of the company by way of issuance of non-convertible debentures (NCDs) up to the limit of Rs 4,000 crores on a private placement basis and commercial papers (CPs) up to the limit of Rs 1,500 crores, subject to the approval of the shareholders of the company. It has so far raised Rs 1,403 crore under NCDs, it said.

During the quarter Navi has disbursed Rs 859 crore under various co-lending arrangements where Navi contributes to 20 percent of the loan amount.

Navi Finserv’s total loan book stood at Rs 6,444 crore out of which the secured portfolio stood at Rs 3,842 crore. The company has cash and bank balances amounting to Rs 1,285 crore.

Bansal's primary reason to acquire Chaitanya was to get a universal banking licence that would have enabled him to collect deposits from the public, a cheap way to get capital to grow the lending business.

However, his banking licence request was rejected by the Reserve Bank of India last year, hence holding on to Chaitanya became untenable with his ambitions to be a digital lender as Chaitanya was a rural-focussed institution. Bansal is expected to use the cash to aggressively grow its lending business.