Navi Finserv Limited is a subsidiary company of Navi Technologies Limited. The parent company was started by Sachin Bansal, ex – promoter of Flipkart. Navi Finserv Limited is a registered non-deposit NBFC with RBI. The Company was earlier known as Chaitanya Rural Intermediation Development Services Private Limited. The Company was incorporated in 2012. Navi Finserv Limited is engaged in the Financial Services business. In this article, we take a closer look at the Navi Finserv NCD Details and its possible future prospects.
The service portfolio of the Company is:
- Digital Personal Loans
- Housing Loans
- Loans Against Property
- Microfinance Loans
The Company provides this service via their mobile application Navi app. Navi Finserv Limited’s business model is the mobile-first, app-only model. The Company has reached a wide range of customers through their business operation. Today, Navi Finserv is accessible in 84 % of all Indian pin codes. In-home loans segment, Navi Finserv, has reached 8 cities in India.
As per the latest reports, the consolidated AUM of Navi Finserv Limited is at Rs. 36.5 billion. Navi Finserv operates with a systematic and focused approach. It helps the Company to meet the borrowing needs required of middle-class India. The main goal of Navi Finserv is empowerment, along with the capacity building. The Company has a higher degree of focus on middle-class India.
Along with the primary business, the Company is also engaged in general insurance. The Company has set up a subsidiary for it, Navi General Insurance. It also acquired Dewan Housing Finance Limited in 2020.
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OBJECTS OF THE ISSUE:
The Company stated that the funds been raised from the proceeds of the NCD would be utilized to:
- For onward lending.
- Financing along with the repayment and the prepayment of the interest and the principal of the outstanding dues of the Company.
- General Corporate Purposes.
NAVI FINSERV LIMITED NCD DETAIL:
IPO Bound Navi Finserv has approved its NCD offer. The Company intends to raise funds before IPO through a debt-based NCD offer. Navi Finserv’s board is coming up with their first NCD offer. The Company also stated that the funds raised via the NCD offer would partially finance the needs. The needs are for carrying out the onward lending and the financing of its business. Navi Finserv stated that it would grant around 75% of the net issue collections from the NCD offer.
The Company will also use the rest 25% for general corporate purposes. The NCD offer of the Company is a Rated, Secured, Transferable and Redeemable Non-Convertible Debentures (NCDs). The price has been fixed at Rs. 1000 each. The Company aims to raise around Rs. 300 crores via the NCD offer.
The NCD offer of the Company also holds a greenshoe option to retain oversubscription to the tune of Rs. 300 crores raised within the offer. As a result, the overall size of this NCD issue will be Rs. 600 crores. The minimum application made within this NCD offer is for 10 NCDs and in multiples of 1 NCD. Post allotment of the NCD, the shares will be listed on BSE and NSE.
This debt offering consists of 18 and 27 months. The offered coupon rates range from 9.20% to 9.80%. It is within the Monthly and Annually payment of the interests. The Company also stated that there is no option of Put and Call buying and writing for this debt-based NCD issue. Also, the Company stated that no portion of the NCD offer has any reservation.
| Issue Open | May 23, 2022 to June 10, 2022 |
| Security Name | Navi Finserv Limited |
| Security Type | Secured, Redeemable Non-Convertible Debentures |
| Base Issue Size | Rs. 300.00 Crores |
| Shelf Issue Size | Rs. 300.00 Crores |
| Issue Price | Rs. 1000 per Non-Convertible Debentures |
| Face Value | Rs. 1000 each Non-Convertible Debentures |
| Minimum Lot size of NCD | 10 NCD that corresponds to Rs.10,000 |
| Market Lot of the NCD | 1 NCD |
| Listing At | BSE, NSE |
| Credit Rating | IND A/ Stable outlook as by India Ratings & Research Private Limited |
| Tenor of the NCD | 18 months and 27 months |
| Series | Series I to IV |
| Payment Frequency of the NCD | Monthly and Annually |
| Basis of Allotment of the NCD | First Come, First Serve Basis |
| Options | Tenure | Frequency of Interest Payment | Coupon (% per annum) for NCD Holders in Category I, II, III & Iv | Redemption Amount (₹ /NCD) on Maturity for NCD Holders in Category I, II, III & IV (%) | Effective Yield for NCD Holders in Category I, II, III & IV (%) | Put and Call Option |
| I | 18 months | Monthly | 9.20 % | Rs. 1,000 | 9.59 % | NA |
| II | 18 months | Annual | 9.50 % | Rs. 1,000 | 9. 57 % | NA |
| III | 27 months | Monthly | 9.40 % | Rs. 1,000 | 9. 80 % | NA |
| IV | 27 months | Annual | 9.75 % | Rs. 1,000 | 9. 77 % | NA |
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NAVI FINSERV NCD ALLOCATION RATIO:
| Category of the Allocation | NCD Allocation | NCD’s Reserved |
| Institutional Investors | 20% | 200,000 |
| Non-Institutional Investors | 20% | 200,000 |
| High Net worth Investors | 30% | 300,000 |
| Retail Investors | 30% | 300,000 |
| Total NCD’s | 100 % | 1,000,000 |
STRENGTHS OF THE NAVI FINSERV NCD:
- Navi Finserv has a large Capital Base. The Company has been able to carry out Deployment Across Various Segments. It helped the Company to register a better and more stable financial matrix.
- Navi Finserv has a Reserve Equity to Support Business Requirements. The Company has been able to manage its corpus effectively. From Rs. 40 billion corpora, it has infused Rs.18 billion in lending businesses. The remaining is available for equity infusion. Navi Finserv also intends for further expansion.
- The promoters of Navi Finserv have a very solid track record of fundraising.
- Eminent Board members and professionals are working in the Company. It has helped Navi Finserv Limited expand its business operations with an opportunity to be in new business verticals.
- The Company has set up a lending head and the two product heads. They look after the housing and digital loan segments of the Company.
WEAKNESS OF THE NAVI FINSERV NCD:
- Navi Finserv has a very High Disbursement to Outstanding Ratio. Navi Finserv has registered a growth in its monthly run rate. It is now of Rs. 5 billion disbursements. The Company also stated that it would further increase in coming quarters. It is a growth prospect. Still, the unseasoned portfolio can be a material credit cost risk.
- Recently Navi Finserv registered an important development in their analytics and processing algorithms. It has led to low early delinquency in their second and third quarter disbursement matrix.
- Navi Finserv is ramping up its lending businesses. The Company is carrying out leverage of their microfinance business. The consolidated leverage of Navi Finserv, including internal debt, was at a multiple of 3.45 times.
- The Company has also made plans to maintain robust liquidity, not to have any liquidity crunch issues.
PROMOTERS OF NAVI FINSERV LIMITED:
The promoters of the Company are as follows:
- Navi Technologies Limited
NAVI FINSERV NCD RATING:
The NCD offers brought by the Company have been rated. It is rated as Ind A/ with a Stable Outlook. India Ratings & Research Private Limited has done the NCD offer rating. The rating agency has assigned a stable outlook. The agency also stated that no such impressive commentary is there. Rather the rating agency also accounted that the Company holds a degree of safety in terms of the timely servicing of its financial obligations and the carry-over of low credit risk.
COMPANY FINANCIALS:
| Particulars | For the year ending with the amount as in Rs in Millions | ||||
| 31 December 21 | 31 March 21 | 31 March 20 | |||
| Total Assets | 37,959.66 | 33,210.77 | 36,852.38 | ||
| Total Revenue | 3,188.92 | 3,367.36 | 752.27 | ||
| Profit After Tax | -625.89 | 975.42 | 97.16 |
NAVI FINSERV CONTACT DETAILS:
Navi Finserv Limited
Prestige RMZ Startech, 7th floor,
Wing B, No. 139, 2, Hosur Road,
Koramangala Industrial Layout,
S. G Palya, Bengaluru 560 095
Phone: +91 89519 04682
Email: corporate_finserv@navi.com
Website: www.navifinserv.com
NAVI FINSERV NON-CONVERTIBLE DEBENTURES REGISTRAR:
Link Intime India Private Limited
C-101, 1st Floor, 247 Park
L.B.S. Marg, Vikhroli West
Mumbai – 400 083, Maharashtra
Phone: +91 22 4918 6200
Email: navifinserv.ncd@linkintime.co.in
Website: www.linkintime.co.in
NAVI FINSERV NCD MAY 2022 LEAD MANAGER(S):
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