MC Exclusive: Navi open to external investment for acquisitions, cash cushion for uncertain times: Sachin Bansal

Navi is looking to raise external investment. It is also expected to go for ain IPO in 24 months.

Fintech firm Navi is open to private equity investment from partners aligned with its long-term vision, founder and managing director Sachin Bansal has told Moneycontrol in an exclusive interaction.

While the company is always in discussions with financial institutions, there have not been any concrete plans yet as the IPO horizon is only 24 months away, Bansal said.

“We keep talking regularly. I mean, the question in my mind is whether we need investors who are aligned with our vision. Our IPO horizon hopefully will not be too long… could be 24 months or less than 24 months. So there will be opportunities for them to exit if they want,” Bansal said in an interview on April 2.

Flipkart founder Bansal owns around 97 percent of Navi.

Read the full Sachin Bansal interview here

In August, Navi sold Chaitanya India Fin Credit to Ananya Birla-led Svatantra Microfin for Rs 1,479 crore.

“Because of the Chaitanya sale, we got a very nice infusion of equity. That deal was at a decent price. So we're kind of good for I think another 12 to 18 months minimum from a scale perspective. So we are not kind of in a rush to raise money,” Bansal said.

Navi Technologies acquired Chaitanya for Rs 150 crore in 2019 and had infused around Rs 900 crore in the microfinance institution (MFI).

On April 4, TechCrunch reported that Navi was in the market to raise between $200 million and $400 million at a $2 billion valuation.

Navi said that the news was speculation.

Bansal told Moneycontrol the company does not need money, but is good to have as a cushion to experiment with new things.

“I think what capital will do for us is it will give us a little bit more cushion to absorb any shocks because the world is an uncertain place, right? Right now any kind of shock can happen. So it's always good to have capital to absorb the shocks. Also, it's possible that because of all this churn in the fintech industry, there could be some acquisition opportunities that may come up. So today, we can't approach them. But if we have extra capital, we may,” Bansal said.

“Capital always is useful. I think that's what I learned in Flipkart as well. Have a war chest ready always,” he added.

Navi's topline grew at around 80 percent in FY24 and its assets under management grew from Rs 6,500 crore at the end of the June quarter to Rs 7,500 crore in the September quarter.

Navi has been entering into co-lending partnership with multiple financial institutions as well as raising money through Non Convertible Debentures (NCD) and has so far raised Rs 1,500 crore through this route.

The rapid growth has forced Navi to look for capital including IPO plans. This is not the first attempt by Navi to go for an initial public offer (IPO). It abandoned the plan to raise Rs 3,300 crore in 2022 after the markets turned volatile after the Russia-Ukraine war and the runaway oil prices.

“At the same time, I think the Russian war and all of that stuff happened. The timing was bad, I think. We got good demand from FIIs at that time. So I am hoping that in a few months, once we are ready, we will (start the process again),” Bansal said.