Navi Finserv: Navi Finserv is ready to raise Rs 600 crore from the sale of public bonds

MUMBAI: Navi Finserv, controlled by Flipkart co-founder Sachin Bonsal, is set to raise ₹ 600 crore by issuing public bonds, presumably the first such retail bond sale by a fintech company in India, three people familiar with the matter told ET. Navi, which deals in personal and home loans, seeks to expand its credit portfolio through digital loans.

A rated bonds will offer up to 9.75% with a 27-month term. Another series will offer 9.50% with 18-month maturity.

“The company has a digital retail interface, which can be strengthened by issuing public bonds even if a retail issue is a little more expensive than a private placement,” said one person.

The company’s goal is to diversify its borrowing sources in a growing credit market. Navi Finserv did not respond to a request for comment.

The base size of the proposed issue is estimated at ₹ 300 crore, with the option of holding subscriptions up to a further ₹ 300 crore. The bond sale will open for subscription on May 23 and is expected to close by June 10. Bonds will be listed on both BSE and NSE

‘A’ rating by Ind

And helping to raise bonds.

Navi Finserv is a subsidiary of Navi Technologies, which could raise about ₹ 3,350 crore in the next two to three months through an initial public offering. Navi Finserv is registered with RBI as a non-deposit taking systemically important company.

India Rating gave the proposed bond an A rating (stable outlook). “Creating a growing vulnerability to event risks, including rapid growth and deterioration of the macroeconomic environment in less than two years, Ind-Ra expects the group to operate in moderate leverage with adequate liquidity buffers,” the rating company said in a statement. Note:

Navi Finserv previously raised funds through market-linked debentures, bank loans and privately held non-convertible debentures. It has an outstanding debt book of about ₹ 2,600 crore, with debt assets estimated at about ₹ 3,500 crore.

Loan app

The company does not involve any third party to create customers who apply for personal or home loans through an app. It distributes loans to home buyers in seven cities, including Bangalore, Mumbai, New Delhi, Pune, Chennai, Hyderabad and Mysore, with an average ticket size of ₹ 60 million.