BharatPe: Navigating Towards Public Listing and Profitability

resr 5paisa Research Team

Last Updated: 15th January 2025 - 02:24 pm

2 min read

In a recent interview, CEO Nalin Negi detailed BharatPe's strategic roadmap, emphasizing resilience and a clear focus on achieving significant milestones. The company, which plans to go public within the next 18-24 months, aims for full-year EBITDA profitability by FY25. Negi credits the company's ability to navigate legal and leadership challenges as key to its current stability and growth trajectory & Sensex gains 250 pts.

Reflecting on BharatPe's six-year journey, Negi described the company as resilient, having overcome substantial challenges to achieve noteworthy success. The year 2023 marked a turning point, with BharatPe becoming EBITDA profitable in October. This milestone has set the stage for ambitious plans, including scaling secured lending and optimizing credit disbursals.

Strategic Focus on Revenue and Cost Efficiency

Negi highlighted BharatPe's focus on revenue levers and cost efficiency. The company has meticulously re-engineered processes to streamline operations and enhance profitability. Each business aspect is evaluated for its revenue-generating potential and value addition. By optimizing credit loss and balancing risk and reward, BharatPe has managed to increase disbursals while reducing costs, thereby achieving a double benefit.

Consumer Payments and Merchant Focus

While BharatPe has traditionally focused on merchant services, it recently ventured into consumer payments with the launch of its consumer app in August. Despite the crowded market, BharatPe aims to provide an excellent user experience and effective monetization rather than chasing large UPI market share. Negi envisions a future where both merchant and consumer businesses flourish and integrate seamlessly.

Lending Strategies and Partnerships

BharatPe is gradually expanding its secured lending portfolio through strategic partnerships. Currently, unsecured loans form a small portion of their offerings, but the company is keen on scaling secured lending over time. BharatPe's disbursements are a mix of personal and business loans, underwritten based on merchants' cash flows.

Collaboration with Trillion Loans

Trillion Loans plays a significant role in BharatPe's lending ecosystem, handling approximately 25-30% of overall loan disbursements. BharatPe has increased its stake in Trillion from 51% to 61% and plans to maintain this while scaling disbursals through additional partnerships.

Investment in Technology and Governance

BharatPe has made substantial investments in governance and technology, aiming to build robust systems and attract enterprise clients. The company is also developing new products in collaboration with Unity SFB, including the Third Party Application Provider (TPAP) stack for UPI transactions.

Future Prospects: IPO and Capital Raising

As BharatPe prepares for an IPO within the next two years, the company is financially robust, with strong liquidity and EBITDA positivity. While no bankers have been appointed yet, the IPO is a key milestone in BharatPe's growth strategy. The company is open to new investors during this process but is not actively seeking external capital.

Leadership and Team Dynamics

Negi acknowledged the challenges faced during his tenure, including legal disputes and leadership transitions. However, he credited the management team, board, and employees for their collective efforts in steering BharatPe towards its goals. The company's journey serves as a case study in resilience and strategic focus within the startup ecosystem.

Conclusion

BharatPe's focused strategy, robust governance, and commitment to cost efficiency position it well for future growth and profitability. With plans to integrate its merchant and consumer businesses and a clear roadmap for an IPO, BharatPe continues to build on its resilient foundation to achieve long-term success.

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