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On December 10, 2018, Sachin Bansal launched his second venture, Navi Technologies , an ambitious foray to build the most disruptive financial services company, with technology as the underlying catalyst.

Over the years, Sachin has invested his personal capital of Rs 4,000 crore in the fintech major.

In FY 2021, Navi’s revenues jumped over 3.9 times at Rs 779 crore, compared to Rs 199 crore reported in FY 2020. Also, Navi reported a profit of Rs 71.2 crore in FY 2021, against a loss of Rs 8.07 crore in the previous fiscal.

With rapid and profitable growth, Navi is now on course for a Rs 4,000-crore IPO (initial public offering). This will enable Navi to meet the Reserve Bank of India (RBI) norms for non-banking financial services companies (NBFC) on the capital adequacy and solvency capital for adherence to RBI norms on liquidity risk management framework for NBFCs.

Earlier this year Navi converted itself into public limited company and has also engaged investment bankers to drive the IPO  

The IPO proceeds will work as growth capital, giving Navi the leverage to borrow more and lend a lot more in the process.

Sources in the know told YS that the IPO proceeds will have no element of an offer for sale (OFS), which backs Sachin’s claim of being in the game for the long term to serve the relatively unbanked market.

Since its inception, Navi has found investors in Gaja Capital and HDFC Bank veteran Paresh Sukthankar. While ICICI Bank veteran Nachiket Mor has also been associated with the company, last August Navi roped in Anand Sinha, ex-deputy governor of Reserve Bank of India on its board.

Ahead of the IPO, sources say that Navi’s board will be strengthened further with the addition of new independent directors, such as Usha Narayanan; who has earlier worked with PwC and was also on the board of majority government-owned Bank of Baroda; and Shripad Nadkarni, an FMCG veteran and investor in Hector Beverages owned Paperboat.

On the business front, Navi’s lending book worth Rs 3,500 crore comprises personal loans, home loans, and microfinance, along with other financial services’ businesses in the insurance and mutual funds segment.

On February 18, a credit rating rationale note from CRISIL, on Navi Finserve – a subsidiary of Navi Technologies, reaffirmed its A-/Stable long-term rating for Navi Finserv’s bank loan facilities that were enhanced from Rs 250 crore to Rs 750 crore.

The lender base of the group has expanded with more banks coming on board and the cost of borrowing has also reduced by about 350-400 basis points (hundred basis points make a percent) on fresh borrowings post equity infusion (by Sachin) in October 2019, as per the CRISIL note.

CRISIL also pointed out that despite the COVID-19 imposed disruptions, the digital personal loan portfolio has grown significantly over the last 3-4 quarters and stood at Rs 1,432.8 crore at the end of December last year – registering a 12-month growth of 238 percent. And Navi Finserv’s overall collection efficiency improved from 89 percent to 96 percent from September 2021 to December 2021.

“As compared to FY 2019 when top two states (Karnataka and Maharashtra) accounted for 91 percent of the AUM (assets under management), the share of top two states (Karnataka and Bihar) in the AUM reduced to 62 percent, as of December 31, 2021,” the CRISIL noted said.

“Newer geographies of operations like Uttar Pradesh, Madhya Pradesh, Chhattisgarh, Tamil Nadu, Rajasthan, and Gujarat are expected to contribute to incremental growth,” CRISIL added.

Sources reveal that 84 percent of the country’s pincodes have got customers whose loans were approved by Navi in 2021, while Navi claims to have a repeat rate of 45 percent where customers took repeat loans after successfully closing the previous one. During the last two quarters of the calendar year 2021, new loan logins have grown over 5 times to cumulatively touch 4.1 million.

During FY 2022, Navi has reportedly beefed up its investments in technology as compared to the previous fiscal. Excluding microfinance, Navi has close to 1,000 employees within the group of which half are in operations. The remaining half is distributed in tech and non-tech roles in almost an equal proportion.

Parallelly, as per an RBI release dated April 15, 2021, Navi’s other subsidiary — Chaitanya India Fin Credit (Private Limited) is one of the four applicants for ‘on tap’ licensing of universal banks.

Given these interesting business metrics, Navi Technologies could turn out to be a compelling investment story. Particularly because there is a general assumption that tech startups are rarely profitable. But Navi reported a profit margin of over 9 percent in FY 2021 in a little over two financial years – which included 9 quarters to be precise.

As an entrepreneur, Sachin graduated at the age of 23, and was 25 when he co-founded Flipkart with Binny Bansal. At 36, he left Flipkart, and was 37 when he founded Navi Technologies. Now, at 40, Sachin can rightly be called a serial disruptor in the Indian startup ecosystem.