Sachin Bansal's Navi Finserv quadruples standalone PAT in FY24 after subsidiary sale

Navi Finserv Limited (NFL), a part of the Navi Group founded by Sachin Bansal, has reported robust financial growth in its standalone results for the fiscal year ended March 31, 2024 (FY24).

Navi Finserv’s standalone revenue from operations saw a 48.57% increase, reaching Rs 1,906 crore in FY24, compared with Rs 1,283 crore earned in FY23. However, on a consolidated basis, the revenue dropped 6.5% from Rs 2,040.6 crore earned in the previous fiscal year.

The difference is due to the microfinance company divesting its stake from Chaitanya India Fin Credit (CIFCPL) last year. In August, its board approved selling all its shares in CIFCPL to Svatantra Microfin, another microfinance company, for Rs 1,167 crore, according to its filings with the exchanges. This sale was completed on November 23, 2023, giving NFL a profit of Rs 704.06 crore after accounting for related costs.

It had acquired CIFCPL in 2015.

Meanwhile, Navi Finserv's net profit nearly quadrupled on a standalone basis to Rs 668.82 crore, marking a 3.8X rise from Rs 171.98 crore in FY23. It must be noted that profit after tax in FY23 had been impacted by deferred credit charges and tax adjustments related to earlier years.

On a consolidated basis, it registered a profit of Rs 545.07 crore in FY24—more than doubled from Rs 264.16 crore in FY23.

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Total expenses surged by 48.4% in FY24, totalling Rs 1,750.42 crore, matching the company’s revenue increase on a standalone basis. Employee benefit costs showed the most substantial rise, climbing 77.36% year-on-year to Rs 149.87 crore.

However, the expenses increased only marginally from a consolidated standpoint, with employee benefit expenses declining 41.9% after Navi Finserv's exit from CIFCPL.

NFL has partnered with various lenders under co-lending agreements. In these arrangements, NFL disburses loans with 20% of the loan amount coming from its own funds and 80% from its lending partners. In FY24, NFL disbursed Rs 3,097.82 crore under this model.

The company recently closed a $38 million personal loans securitisation deal with JP Morgan.

Securitisation is the process in which certain types of assets—in this case, personal loans—are pooled so they can be repackaged into interest-bearing securities. According to a company statement, the transaction, structured in the form of pass-through certificates, is backed by a pool of unsecured personal loans, originated and serviced by Navi Finserv.