Mumbai The Securities and Exchange Board of India (SEBI) has approved the proposal for initial public offering (IPO) of Sachin Bansal-led Navi Technologies Limited.
The Bengaluru-based firm had in March filed its draft red herring prospectus, proposing to raise 3,350 crore through its IPO.
The offer will involve fresh issuance of equity shares to the investors. The company said it aims to raise funds for investment in its subsidiaries Navi Finserve Pvt. Ltd. and Navi General Insurance Ltd. and other general corporate purposes. Net income is proposed to be deployed in 2023.
financial services company will invest 2,370 crore in Navi Finserve 150 crores in Navi Gen.
The company is also looking at pre-IPO placements 670 crore, as per the draft papers, which will reduce the size of the main share sale.
The market regulator issued an observation letter to Navi Technologies on September 5 in response to its draft offer documents filed on March 14.
Incorporated in 2018 by Sachin Bansal and Ankit Agarwal, the Bengaluru-based company provides financial services. As a part of its portfolio, the ‘Navi’ brand includes personal loans, home loans, general insurance and mutual funds. It also provides microfinance loans through a wholly owned subsidiary under the Chaitanya brand. In 2019, Navi acquired Chaitanya India Fin Credit for 739 crores to enter the microfinance segment.
The company quoted a RedSeer report as saying, “We are one of the leading end-to-end digital ecosystem players in India, with complete control over all three non-payment financial service offerings – lending, insurance and asset management. “
With reference to the financial position of the company, for the period of nine months ended December 2021, it had a net loss of 206 crore, as compared to a profit of 71 crores for FY21.
Axis Capital, BofA Securities India Limited, 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 license.
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 chalk out our next course of action. We can appeal against this decision. Navi can apply again.”
The company said the financial services space in India is highly underserved, which presents an opportunity for a technology-first company to capture a significant market share.
It added that 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.
According to a RedSeer report, between FY21 and FY26, retail debt assets under management are expected to grow at an average annual rate of around 18-20% to reach $1.15-1.25 trillion.
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