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In this video, we take a look at Navi’s journey, from it’s inception to now it’s IPO.
00:00 Introduction
02:43 Origins of Navi
04:55 Navi’s Acquisitions Spree
07:23 Controversies surrounding Navi
10:51 License rejected by RBI
12:45 Navi’s IPO
14:01 Closing Thoughts
When Sachin Bansal sold Flipkart to Walmart back in 2018, he received $1 Billion in exchange for his 5.5% stake in the company. Sachin then wanted to do something in the fintech space as he wanted to give Indian middle class customers same financial services what an HNI enjoys. With this mission, Sachin with his college friend Ankit Agarwal started BACQ Acquisitions Pvt. Ltd in 2018, which he later renamed to Navi Technologies.
With Navi, Sachin and Ankit wanted to offer all the major financial services and for this their goal was to obtain a universal banking licence from the RBI. There are many stringent requirements that applicants need to meet in order get a universal banking licence from the RBI: they need to have had a successful track record for at least 10 years, they need to be deemed to be ‘Fit and Proper’ by the RBI, meaning they need to have sound financials, credentials, integrity, they need to have a specific corporate structure, and there’s a minimum capital requirement too, of 5 billion rupees.
They acquired Chaitanya Rural Intermediation Development Services, or CRIDS, which was founded in February of 2012, and has a subsidiary called Chaitanya India Fin Credit which offers loans for things like two-wheelers, housing, small business and education. The purpose of this acquisition was two-fold. Navi wanted to fulfil the 10 year requirement set out by the RBI for a universal licence, and CRIDS would meet that requirement in February of 2022, and also, this company was aligned with the direction that Navi wanted to take with their startup: they wanted to meet the needs of Indians who hadn’t historically been able to access financial services like loans, credit, investmenting, and banking.
In 2020, Navi renamed CRIDS to Navi Finserv, and started offering digital loans, housing loans, and loans against property. So far, they’ve dispersed 4.81 lakh personal loans worth 2,246 crore rupees , and they’ve also issued 604 home loans too. Navi wanted to be present in every category that they could before they applied for their universal banking licence, so in 2020 they bought another company, DHFL General Insurance, which they later renamed to Navi Insurance, and today they’re offering insurance in the health, motor, travel, and home categories.
Navi’s most recent acquisition was Essel Mutual Fund in February of 2021, which they rebranded to Navi Mutual Fund through which they’re currently offering access to 15 unique mutual funds that their customers can invest in through 9 different platforms including Groww, INDMoney, and Zerodha Coin.
But when Navi applied for universal banking licence, the RBI issued a press release stating that Chaitanya India Fin Credit Private Limited was found to be not suitable for a universal banking licence. This was because of reasons like Sachin was facing a charge by Enforcement Directorate and few other cases. Then, there’s the unsolicited SMS issue, which the RBI had investigated themselves.
Now earlier this year, Navi announced their plans to go public. The company filed their DRHP in March of 2022 and they will be going public anytime before end of current year. But a question rises; why is Sachin taking Navi public? Sachin had earlier lost control of his own startup, and he didn’t want to repeat that same mistake with his next startup, which is why he currently owns 97.77% of Navi. So far, he’s invested more than 4,000 crore rupees into the company, that’s more than half of his net worth, and believes in what he’s building. He had wanted to build Flipkart into the future, he wanted it to be a $100 billion company, but that opportunity was taken away from him, so with Navi, he has said that he’s planning to build it for the next 20 years, and that it will be a $100 billion company.
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The post Why is Sachin Bansal Taking Navi Public? appeared first on HumanitasConnects.
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