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An observation letter was issued to Navi on September 5, according to Sebi’s website. Navi is considering a pre-IPO placement of up to Rs 670 crore, according to the draft papers.
It is expected to use the money from the IPO to invest across subsidiaries, Navi Finserv Pvt Ltd (NFPL) and Navi General Insurance Ltd (NGIL), and for general corporate purposes.
The company had said it would invest Rs 2,370 crore in its non-bank Navi Finserv and Rs 150 crore in its general insurance business.
Bansal cofounded Navi in 2018 and has invested around Rs 4,000 crore into the entity till date. He is not expected to dilute his stake in the IPO.
Navi Technologies did not respond to ET’s requests for comment till press time Monday.
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The Sebi-nod comes at a time when Navi Finserv has reported a maiden profit of Rs 22.9 crore for the quarter ended in June, as per the company’s filings. It had posted a net loss of Rs 4.3 crore for the fiscal fourth quarter ended March 31, 2022.
Nearly 40% of those availing of a loan on the Navi Finserv platform are repeat customers.
Navi Finserv’s business - which includes its cash, home and microfinance lending operations - contributes almost 80-90% to the group’s quarterly revenue. It also represents almost 78% of the group’s overall assets under management.
Navi’s total assets under management from lending stood at Rs 7,076.5 crore for the June quarter.
It had reported an overall loss of Rs 66.9 crore in FY22, after reporting a profit of Rs 71.1 crore in FY21. Group revenue also fell to Rs 459.8 crore in FY22 from Rs 780 crore a year ago.
The Reserve Bank of India (RBI) rejected Navi’s banking licence application, along with those of other applicants, in May. It had applied for the licence through group firm Chaitanya India Fin Credit.
The company will assess if the regulator is open to having new entrants in the banking sector before reapplying for a licence, ET reported on September 12.