Even as Navi Technologies is gearing up to make a public market debut by the end of March 2023, the Indian financial services group does not rule out raising capital in a pre-IPO round.
“Whether we raise a [pre-IPO] funding round or not will depend on the kind of conversations we have with investors for the IPO,” Sachin Bansal, the poster boy of Indian e-commerce, and founder of Navi Technologies, told DealStreetAsia in an interview.
The financial services group recently got approval from India’s capital markets regulator Sebi to raise Rs 3,350 crore (about $406 million) via an IPO.
“While it’s true that tech stocks are out of favour, ours is a slightly different story. Our IPO will only be a primary issue. None of us is selling our stake. There are no investors in the company as it’s primarily funded by me so far… So, there’s no [investor] pressure as such to go public,” said Bansal, who was formerly chairman and co-founder of Flipkart, which was acquired by US retail giant Walmart in 2018.
Bansal has pumped in about $500 million into Navi since its inception in December 2018, about six months after his exit from Flipkart following the Walmart deal.
If the IPO goes through, the corpus raised will be ploughed back into the company — in its subsidiaries Navi Finserv, which offers digital personal, housing, and property loans; and Navi General Insurance. The company also offers an array of mutual fund schemes.
In 2020, the group launched a personal loan business that extends instant personal loans of up to Rs 20 lakh through a digital Navi-app-only process. This comes as Navi nurtures the ambition of becoming a full-fledged bank in the long run.
Although the Reserve Bank of India (RBI) rejected Navi’s application for a banking licence earlier this year, Bansal said it plans to reapply for it.
“Going forward, we definitely plan to reapply for the banking licence. In fact, we are in constant touch with RBI for this. We will assess the right time, based on the conversations and accordingly go for it,” he said.
Navi turned profitable in the 2020-21 fiscal and posted a consolidated profit of Rs 71 crore. The company had posted a loss of Rs 8 crore in the previous financial year.
Edited excerpts of the interview with Bansal:
