Navi Technologies Limited IPO

SEBI approved Navi Technologies Limited IPO – 7 risk factors to know before investing

Navi Technologies IPO

Navi Technologies Limited IPO – Company Overview

Navi Technologies Limited IPO is coming up with INR 3350 crores of fresh issues. The company is a technology-driven financial products and services company in India. Navi Technologies is into all three non-payments financial service offerings such as lending, insurance, and asset management. The company has been constantly innovating its product. It offers all its products under the brand name “Navi”.

Navi Technologies Limited offers various financial services direct to customers including personal loans, home loans, general insurance, and mutual funds. Navi Technologies also offers microfinance loans, through a wholly-owned subsidiary, under the “Chaitanya” brand.

Mr. Sachin Bansal is the promoter, chairman, Managing Director, and Chief Executive Officer of the Company since its incorporation. Mr. Ankit Agarwal is the Executive Director and CFO of the company. Read the complete company insights in the article – “Navi Technologies Limited”

Navi Technologies Limited IPO – Financial Analysis

The total income for the nine months ended December 31, 2021, is INR 719.4 Crores. The total income of the company has been growing significantly over the years. The company’s income has grown from INR 170 Crores in FY 2019 to INR 780 Crores in FY 2021. FY 2020 also witnessed a growth in total revenue to reach INR 207 Crores from INR 170 Crores in FY 2019.  Read complete Financial Analysis and Valuation – “Navi Technologies Limited”.

Navi Technologies Limited IPO pricing and issue size

Navi Technologies IPO got SEBI approval for INR 3350 crores of the fresh issue at a face value of INR 10 each. The promoters are not selling their stakes in the company.   

Book Running Lead Managers and registrar of Navi Technologies IPO are
    • Axis Capital Limited
    • BofA Securities India Limited
    • Credit Suisse Securities (India) Private Limited
    • Edelweiss Financial Services Limited
    • ICICI Securities Limited
    • The registrar for this IPO is Link Intime India Private Limited 
Share Reservations among QIBS (Qualified Institutional Buyers), NIBS (Non-Institutional Bidders), AND RIBS (Retail Individual Bidders)
    • No less than 75% of the Offer is available for the QIB portion
    • The company may allocate up to 60% of the QIB Portion to Anchor Investors on a discretionary basis
    • At least one-third of Net QIB Portion shall be reserved for allocation to domestic Mutual Funds only
    • No more than 15% of the Offer will be allocated to NIBs
    • Not less than 10% of the Net Offer will be available for allocation to retail individual bidders (RIBs)

Utilization of Net Proceeds from Navi Technologies Limited IPO

Navi Technologies Limited is proposing below to utilize the net proceeds from the fresh issue of the IPO.

    • The company is planning to invest in the subsidiaries – Navi Finserv Private Limited (“NFPL”) and Navi General Insurance Limited (“NGIL”).
    • INR 2370 Crores will be invested in NFPL to augment its capital base.
    • To continue its loan portfolio growth NFPL requires additional capital to meet applicable capital adequacy ratios concerning its business.
    • This will help the company to meet its future capital requirements.
    • NGIL is a general insurance provider.
    • This subsidiary will receive INR 150 Crores from the net proceeds to augment the capital base of the company.
    • The rest of the amount will be allocated to meet general corporate purposes.

Related Reading on IPO section Concord Biotech Limited IPO, Deltatech Gaming Limited IPO, DCX Systems Limited IPO.

Risk Factors in Investing in Navi Technologies Limited IPO

    • There is huge competition in NBFCs and Microfinance segment. Traditional and major banks in India are focusing on that segment now.
    • Many listed and unlisted established players exist in the market.
    • The lending and microfinance business operations rely intensively on substantial capital. Any changes in sources of capital will affect the operation of the company.
    • Net cash flow from operating activities has been negative for the last three years. ROE and ROCE are not very attractive for the period.
    • Borrowings of the company have gone up over the last three years. The debt-to-equity ratio has gone up from 0.06 in FY 2019 to 0.43 in FY 2022.
    • The current borrowings of the company are INR 1477.1 Crores and noncurrent borrowings is INR 1175.4 Crores, as of December 31, 2021.
    • Any hike in interest rate will increase the cost of borrowing and hence affect the bottom line.
    • The business is subject to seasonal variations, and the economic condition of the country. Any adverse impact on the economy due to Covid 19 or any such natural event will adversely affect this business.
    • Again, the end user of microfinance is from low-income group people in India, who are vulnerable to the economic slowdown.

Why Invest in Navi Technologies Limited IPO?

    • Navi Technologies Limited is planning to expand it’s business and scale of operations.
    • Planning to increase its adequacy ratio as per RBI mandate.
    • Experience promoters
    • Again, India is under-penetrated in the insurance and mutual fund business. There is a big market for the company in India to catch for the company.
    • The valuation of the company remains to be seen before investing.

Navi Technologies Limited IPO Details

Navi Technologies IPO DetailsIPO details
Subscription DatesComing soon
Anchor Investor Bidding DateComing soon
BID/OFFER Opens OnComing soon
BID/OFFER Closes OnComing soon
Price BandComing soon
Fresh IssueINR 3350 Crores
Equity Shares outstanding before the Issue288,138,978 Equity Shares
Minimum bid (lot size)Coming soon
Face ValueINR 10 Per Equity Share
Listed onBSE & NSE

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