Navi Technologies Ltd IPO

Upcoming

IPO Synopsis

Navi Technologies led by Sachin Bhansal is set to come forth with its IPO and has filed its preliminary papers with SEBI. 
The IPO consists of fresh issue of equity shares worth Rs. 3,300 crores. There will not be any stake sale, neither will Sachin Bhansal dilute any of his stake. The company may consider a pre-IPO placement round worth Rs. 670 crores which may reduce the initial issue size. 
ICICI Securities, BofA Securities and Axis Capital, Credit Suisse Securities (India) Pvt Ltd and Edelweiss Financial Services are the book running lead managers to the public issue.


Objective of the Issue

The proceeds of the IPO will be used for: 

1. to invest in subsidiaries - Navi Finserv Pvt Ltd (NFPL) and Navi General Insurance Ltd (NGIL)
2. for general corporate purposes.

About Navi Technologies Ltd

Navi Technologies is a tech-driven financial products and services company. The company has expanded offerings under the "Navi" brand to include personal loans, home loans, general insurance and mutual funds. It also offers microfinance loans through a wholly-owned subsidiary, under the "Chaitanya" brand. Under this brand, it extends credit to low-income women in rural and semi-rural areas across India. 
In the MF space it has launched the exchange traded funds (ETFs) with lowest fee structure. Navi MF had acquired assets of Essel MF in 2021 and per December quarter data, NaviMF assets are worth Rs.930 crores.
In personal loans, it instantly offers loans of up Rs.20 lakh through a completely paperless process.
In the general insurance business, it has acquired DHFL General Insurance Limited in February 2020, and now offers insurance products under the “Navi” brand and focuses on providing simple to understand and comprehensive retail health insurance offerings to the digitally connected Indian population through its direct to customer approach. It also launched home insurance products with the aim of providing a new perspective on the manner that insurance is purchased in India.
Under the home loan business, it extends loans for ready to move-in, under-construction and self-constructed properties, and (b) loans against property for constructed properties.
The largest vertical for Navi is microfinance loans where the company had assets under management (AUM) worth Rs 1,808 crore in Q3 of FY22. Gross non-performing assets (NPAs) for the vertical stood that 3.83 percent in the same quarter. For personal loans, Gross NPAs stood at 1.12 percent

Profit and Loss

Balance Sheet

Particulars (in Rs. Crores) FY21 FY20 FY19
Revenue 136.7 55.9 12.6
EBITDA 234.2 47.7 4.6
PAT 71.2 -81.1 2.1
Particulars (in Rs. Crores) FY21 FY20 FY19
Total Assets 6306.3 5101.0 60.7
Share Capital 2881.4 2874.9 51.0
Total Borrowings 1691.2 804.9 3.2
Particulars (in Rs. Crores) FY21 FY20 FY19
Net cash generated from / (used in) operating activities -894.05 -272.45 -1.59
Net cash from / (used in) investing activities 255.76 -1429.73 -52.37
Net cash flow from / (used in) financing activities 802.32 1733.79 53.97
Net increase (decrease) in cash and cash equivalents 134.03 31.60 0.00

Peer Comparison

Name of the Company Total Revenue Basic EPS Nav Rs. per share PE RoNW%

Navi Technologies Limited

780.0 2.47 136.51 NA 1.81%
Bajaj Finance Limited 26683.1 73.58 612.67 83.68 12.00%
SBI Cards Payment Services Limited 9713.6 10.48 67.01 74.54 15.60%

CreditAccess Grameen Limited

2466.1 8.96 237.27 73.49 3.60%
ICICI Lombard General Insurance Company Limited 12161.4 32.41 163.56 37.58 19.80%


The key points are -

Key Points

  • Strengths

    1. Mobile first approach driving better customer engagement and experience
    2. End-to-end ownership of product
    3. In-house full-stack technology capabilities
    4. Risk management, data science and machine learning leveraged operating model
    5. Network effect, cross-sell and up-sell

  • Risks

    1. Technology-driven underwriting, risk management and collection processes may not be able to effectively identify, monitor or mitigate the risks in the lending operations
    2. Any failure to maintain, protect, enhance and promote customer’s trust would adversely affect the business
    3. Customers’ defaulting in repayment of loans
    4. The cloud computing software and data centres for the primary and backup data storage may experience system downtime, prolonged power outages or shortages
    5. Business processes a large amount of data, including personal data, and the improper collection, hosting, use or disclosure of data could harm the reputation
    6. The firm is affected by volatility in interest rates in both the lending and treasury operations

How to apply for an IPO?

  • Login to your 5paisa account and select the issue in the current IPO section

  • Enter the number of lots and price at which you wish to apply for

  • Enter your UPI ID and click on submit. With this, your bid will be placed with the exchange

  • You will receive a mandate notification to block funds in your UPI app

  • Approve the mandate request on your UPI and funds will be blocked

FAQs

What is the price band of the IPO?

Navi Technologies IPO details are yet to be announced.

When does the Navi Technologies issue open and close?

Navi Technologies IPO details are yet to be announced.

What is the size of Navi Technologies IPO issue?

The IPO comprise of fresh issue of equity shares worth Rs.3,300 crores.

Who are the promoters/key personnels of Navi Technologies?

Navi Technologies is promoted by Sachin Bhansal.

What is the allotment date of Navi Technologies?

Navi Technologies IPO details are yet to be announced.

What is the Navi Technologies listing date?

Navi Technologies IPO details are yet to be announced.

Who are the book runners for Navi Technologies IPO?

ICICI Securities, BofA Securities and Axis Capital, Credit Suisse Securities (India) Pvt Ltd and Edelweiss Financial Services are the book running lead managers to the issue.

What is the objective of the issue?

The proceeds from the issue will be used for: 

1. to invest in subsidiaries - Navi Finserv Pvt Ltd (NFPL) and Navi General Insurance Ltd (NGIL)
2. for general corporate purposes

How to apply for the Navi Technologies IPO?

To apply for the IPO, follow the steps given below

1. Login to your 5paisa account and select the issue in the current IPO section
2. Enter the number of lots and price at which you wish to apply for
3. Enter your UPI ID and click on submit. With this, your bid will be placed with the exchange
4. You will receive a mandate notification to block funds in your UPI app

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