Navi Technologies gets Sebi’s approval for IPO
- The firm filed its draft prospectus in March, looks to raise ₹3,350 crore
Sachin Bansal-led Navi Technologies Ltd’s proposal for an initial public offering (IPO) has been cleared by the Securities and Exchange Board of India (Sebi).
The Bengaluru-based firm had filed its draft red herring prospectus in March, proposing to raise ₹3,350 crore through its IPO.
The offer will comprise fresh issuance of equity shares to investors. The company said it aims to raise funds for investment in its subsidiaries Navi Finserv Pvt. Ltd and Navi General Insurance Ltd and other general corporate purposes. The net proceeds are proposed to be deployed in 2023.
The financial services company will invest ₹2,370 cr in Navi Finserv and ₹150 crore in Navi General.
The company is also considering a pre-IPO placement of ₹670 crore, according to the draft papers, which will reduce the size of the main share sale.
The markets regulator issued an observation letter to Navi Technologies on 5 September in response to its draft offer documents filed on 14 March.
Incorporated in 2018 by Sachin Bansal and Ankit Agarwal, the Bengaluru-based company offers financial services. As a part of its portfolio, the ‘Navi’ brand includes personal loans, home loans, general insurance and mutual funds. It also offers microfinance loans through a wholly owned subsidiary under the Chaitanya brand. In 2019, Navi acquired Chaitanya India Fin Credit for ₹739 crore to enter the microfinance segment.
“We are uniquely positioned in India as one of the leading end-to-end digital ecosystem players with complete control over all three non-payments financial service offerings—lending, insurance and asset management,” the company said, citing a RedSeer report.
In terms of the company’s financials, for the nine-month period that ended December 2021, it had a net loss of ₹206 crore, compared with a profit of ₹71 crore for FY21.
Axis Capital, BofA Securities India Ltd, Credit Suisse Securities India Pvt. Ltd, Edelweiss Financial Services and ICICI Securities Ltd are the lead book running lead managers to the issue.
This year, the Reserve Bank of India rejected Navi’s application for a universal banking licence.
During a press conference in May this year, Bansal said, “We will ask RBI the reason behind this decision. We are going to evaluate RBI’s written response and chart out our next course of action. There could be an appeal from us against this decision. Navi may even reapply.”
The financial services space in India is highly underpenetrated, presenting an opportunity for a technology-first company to capture a significant market share, the company said.
The company’s target market segments in India present significant growth potential, as reflected in the projected growth of such industries over the next five years, it said.
According to a RedSeer Report, between FY21 and FY26, retail loan assets under management are expected to grow at an average annual rate of approximately 18-20% to reach $1.15-1.25 trillion.
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