SEBI approves Navi Technologies' Rs3,350 crore IPO

13 Sep 2022 , 08:18 AM

With Sachin Bansal as co-founder, who was also the co-founder of Flipkart, Navi had submitted a draft prospectus to SEBI in March for an Rs3,350 crore Initial Public Offering (IPO) through a new issuance of shares.

According to the SEBI website, Navi received an observation letter on September 5. According to the draft filings, Navi is considering a pre-IPO placement of up to Rs670 crore.

The proceeds from the IPO are anticipated to be used for general corporate purposes and investments across subsidiaries Navi Finserv Pvt Ltd (NFPL) and Navi General Insurance Ltd (NGIL).

The company had stated that it would invest Rs150 crore in its general insurance business and Rs2,370 crore in its non-bank Navi Finserv.

Bansal co-founded Navi in 2018 and has so far contributed over Rs4,000 crore to the company. He is not anticipated to lose any of his IPO investment.

The SEBI-nod was announced at the same time that Navi Finserv, according to its records, claimed its first profit of Rs22.9 crore for the quarter ending in June. For the fiscal fourth quarter that ended March 31, 2022, it reported a net loss of Rs4.3 crore.

Nearly 40% of borrowers on the Navi Finserv platform are returning clients.

The cash, housing, and microfinance loan businesses of Navi Finserv account for over 80—90% of the group’s quarterly income. Additionally, it accounts for nearly 78% of the group’s total assets managed.

For the June quarter, Navi’s total assets under management from loans were Rs7,076.5 crore.

Following a profit of Rs71.1 crore in FY21, it reported an overall loss of Rs66.9 crore in FY22. Additionally, group income decreased from Rs780 crore in FY21 to Rs459.8 crore in FY22.

In May, the Reserve Bank of India (RBI) denied Navi’s and other applicants’ requests for banking licenses. It used the group company Chaitanya India Fin Credit to submit the license application.

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