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HomeFintechNavi's DRHP to raise Rs 3,350 crores: Key takeaways

Navi’s DRHP to raise Rs 3,350 crores: Key takeaways

Navi Technologies, owned by Sachin Bansal, has filed a Red Herring Prospectus Draft with SEBI for raising Rs 3,350 Crore from the Public Market. The company, which started as a loan business in 2018 and has since expanded into insurance, asset management, and microfinance, will issue new equity shares as part of the IPO. According to his statement at DRHP, Navi Finserv Private Limited (NFPL) will invest Rs 2,370 crores from the loan results, and Navi General Insurance Limited (NGIL) will invest Rs 1,500 crores.

ICICI Securities, Bofa Securities, Axis Capital, Credit Suisse Securities (India) and Edelweiss Financial Services have been appointed by Navi as book-running leading managers.

Here are a few key takeaways from Navi’s DRHP:

  • Based on consultation with their bookmakers, Navi Technologies has indicated that it could allocate up to 60% of the parties to qualified institutional buyers (QIBs). A third of the anchor investor portion will go to national mutual funds.
  • AMC Navi, NFPL, NGIL, AMC Navi, Navi AMC, Navi Anmol, Navi Investment Advisors, Navi Securities, Navi Trustee are a few of the subsidiaries of Navi Technologies besides BROKING and BACQ Acquisitions. As part of NAVI technologies‘ organic growth strategy, seven of these acquisitions were made.
  • Moreover, in order to capture a larger share of customers’ wallets, the company plans to launch loans and adjacent insurance products. Aside from loans (personal loans, mortgage loans, etc. ), health insurance, asset management, and microfinance, the company’s main businesses are loans, health insurance and asset management through CIFPPL.
  • In the nine months ending December 31, 2021, Navi’s general income was still largely derived from loans with a 43.97 % share. In terms of loan business, there are personal loans, mortgage loans, and others, which contributed Rs 333.57 million rupees during FY 2020-21, or 42.77 % of the general numbers.
  • In the fiscal year 2020-21, NFPL had assets under administration (AUM) about 26.32 percent of which were accounted for by customers in the low-income group that receive up to RS 25,000 a month. During the quarter, NFPL experienced non-compliance with reimbursement obligations for approximately 1,53 % of its AUM attributable to these customers.
  • For the nine months ended December 31, 2021, CIFPPL contributed 32.5 % of the company’s total revenue. In the fiscal year 2020-21, microfinance contributed Rs 231.5 million or 29.68 % of total income. CIFPPL has also requested a universal banking license with RBI.
  • For FY 2020-21, NAVI derived 19.73 % of gross direct primary income through its health insurance product, a contribution that grew to 28.20 % for the period of nine months ending December 31, 2021.
  • DRHP also mentions a notice of show-cause issued to Sachin Bansal on July 1, 2021, by virtue of FEMA provisions in relation to foreign investments in Flipkart. Affirms that Sachin Bansal has abandoned a 100 % stake in Flipkart as of 2018 and has no association with the company’s business.

 

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