Navi Mutual Fund to file for Rs.4,000 crore IPO

Sachin Bansal hardly needs any introduction in start-up circles in India. He was the co-founder of Flipkart along with Binny Bansal before they exited the company by selling their stake to Wal-Mart. Sachin Bansal had used some of these funds to bankroll his Fintech idea, Navi Technologies.

Now, Navi Technologies is planning to file for a Rs.4,000 crore IPO in the Indian markets, most likely by the end of the current week. 

While the details are yet awaited, the draft red herring prospectus (DRHP) is likely to be filed for a total fresh offer to raise funds from the public to bankroll its future expansion plans.

While a lot will depend on the SEBI observations and approval, the IPO is targeted to hit the market either in June or July this year. As of date, Sachin Bansal has already invested Rs.4,000 crore of his own funds into the venture and he does not plan to dilute his stake.

Navi Technologies is headquartered in the southern city of Bengaluru and the company was floated in the year 2018. Surprisingly, for a digital play on the fintech space, Navi Technologies has already turned profitable in FY21 itself.

Ahead of the company, Sachin Bansal had passed a special resolution to convert the private limited company into a public limited company. Now the company is all set for its proposed IPO.

Navi Technologies is a technology-driven financial products franchise and an advice driven services company. It offers the complete palate of financial services packaged in an advisory model to its customers.

These include investment products, loan products, intermediation services etc. The public issue will be lead managed by ICICI Securities, BOFA Securities and Axis Capital which will act as the book running lead managers to the issue.

Broadly, there are two major franchises to the business model. The first is the digital lending business which provides loans up to Rs.20 lakh instantly and in a manner that is thoroughly digital and totally paperless process.

In fact, the company claims that the loan amount, if approved, is credited in a matter of less than 20 minutes to the bank account. It currently has a lending book of Rs.3,500 crore including personal loans, home loans and microfinance.

The other major business line of the Navi group is the mutual funds origination business. Incidentally, Navi funds are among the best performing funds in many of the funds it operates in.

Navi basically plans to follow the Vanguard model wherein it will have a family of passive funds with a variety of themes as part of its mutual fund origination portfolio. The passive trend has been quite visible in the last few years in India too.

One area where Navi Technologies has aggressive plans is in the microfinance segment. It may be recollected that Navi had earlier acquired Chaitanya India Fin Credit for a consideration of Rs.739 crore in 2019.

Chaitanya had also applied for a universal banking licence from the RBI. Navi is also planning to expand its microfinance portfolio quite aggressively in India.