Sachin Bansal-led Navi Technologies gets SEBI nod for Rs 3,350 Cr IPO

Sachin Bansal-led Navi Technologies has received a go-ahead from market regulator the Securities and Exchange Board of India (SEBI) for its Initial Public Offering (IPO). 

The company, founded by the Flipkart co-founder, received the final observation letter from SEBI to raise funds through a fresh issue of Rs 3,350 crore. 

The company will invest Rs 2,370 crore in Navi Technologies (NFPL) and another Rs 150 crore in Navi General Insurance Limited (NGIL), while it will save the remaining amount for use in general corporate purposes.

Navi had filed its Draft Red Herring Prospectus (DRHP) with SEBI in March this year, where it said the entire fundraise will be a fresh issue (with no offer-of-sale), meaning Bansal—who has invested around Rs 4,000 crore into Navi to date—will not dilute his stake (about 97.77%) in the IPO.

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‘Planned IPO is on track’: Sachin Bansal's Navi announces to raise Rs 600 Cr from NCDs

In May, Navi had announced to raise up to Rs 600 crore through the issue of secured and redeemable Non-Convertible Debentures (NCDs). The public issue of Navi’s NCDs was subscribed 1.4X as of June 1, according to data available on the Bombay Stock Exchange (BSE).

These NCDs had a face value of Rs 1,000 each for an amount aggregating up to Rs 300 crore with a green-shoe option to retain an oversubscription of up to Rs 300 crore.

Navi's digital lending app provides loans, including personal and home loans up to Rs 20 lakh instantly, besides other financial services and products like retail health insurance and mutual funds. Its loan disbursal is based on its own paperless credit underwriting mechanism.  

The Bengaluru-based company, set up in 2018 and turned profitable in FY20-21, posted a consolidated profit of Rs 71 crore, with a total income of Rs 780 crore and expenditure of Rs 673 crore. The fintech company’s revenue from operations is reported to have grown from Rs 56 crore in FY20 to Rs 137 crore in FY21.

Navi had faced a minor setback as the Reserve Bank of India (RBI) declined the banking licence for Chaitanya India Fin Credit Pvt Ltd—a micro-finance entity of Navi—as it was “not found suitable under Guidelines for ‘on tap’ Licensing of Universal Banks”.  

“We are going to evaluate RBI’s written response and chart out our next course of action. A lot of options are there in front of us, and there are many things to explore like reapplying. We will consider whether we want to appeal this and weigh our options,” Bansal had said.

Chaitanya India Fin Credit was among the six applications not found suitable for the bank permit. 

Meanwhile, startups like Snapdeal, Droom Technologies, PayMate, and Go Digit General Insurance are awaiting green signals from the SEBI as per details on the market regulator’s website.