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Navi's FY24 operating profit falls 50% as loan write-offs surpass Rs 400 Cr

EntrackrEntrackr · 1y ago
Navi's FY24 operating profit falls 50% as loan write-offs surpass Rs 400 Cr
Medial

Navi Finserv, led by Flipkart co-founder Sachin Bansal, faced challenges scaling its revenue and profitability in the fiscal year ending March 2024. Despite a 6.6% decrease in scale, Navi’s operating profit declined by more than 50%, driven by a fall in collections and an increase in loan write-offs (bad debt). Navi’s revenue from operations decreased to Rs 1,906 crore in FY24 from Rs 2,041 crore in FY23, according to its consolidated annual report. It offers services such as personal and home loans, bill payments, insurance, digital gold, and mutual funds. Interest income made up 84.5% of the total revenue but saw a decline of 12.3%, reaching Rs 1,611 crore in the last fiscal year (FY24). Fees, commissions, gains on fair value, and other financial instruments brought Navi’s total income to Rs 1,909 crore in FY24, down from Rs 2,078 crore in FY23, reflecting an 8.1% year-on-year decrease. As with other lending companies, finance costs were the largest expenditure for Navi, accounting for 37.6% of total expenses. These costs also decreased by 4.8%, reaching Rs 658 crore in FY24. Additionally, Navi reduced employee benefits by 41.9%in FY24. Notably, the firm’s loan write-offs surged 3.2X to Rs 406 crore in FY24, up from Rs 125 crore in FY23. Fees, commissions, software, legal expenses, customer onboarding, and other costs pushed total expenditure to Rs 1,750 crore in FY24. Navi’s shrinking scale and major write-offs led to a 56% decline in operating profits, dropping to Rs 159 crore from Rs 335 crore in FY23. Despite this, the company posted a net profit of Rs 545 crore in FY24, largely due to Rs 429 crore gained from the sale of Svatantra Microfin, a former subsidiary. Svatantra Microfin was sold to Chaitanya India Fin Credit for a total consideration of Rs 1,166 crore in November 2023. FY23-FY24 FY23 FY24 EBITDA Margin 16.89% 9.80% Expense/₹ of Op Revenue ₹0.85 ₹0.92 ROCE 12.80% 5.39% According to Entrackr, Navi’s ROCE and EBITDA margins worsened to 5.39% and 12.80%, respectively. On a unit level, it spent Re 0.92 to earn a rupee in the fiscal year ending March 2024.

Sachin Bansal's Navi Finserv quadruples standalone PAT in FY24 after subsidiary sale

YourStoryYourStory · 1y ago
Sachin Bansal's Navi Finserv quadruples standalone PAT in FY24 after subsidiary sale
Medial

- Navi Finserv Limited (NFL) reports strong standalone revenue growth of 48.57% in fiscal year 2024 (FY24), reaching Rs 1,906 crore. - On a consolidated basis, NFL's revenue declined by 6.5%, mainly due to divesting its stake in Chaitanya India Fin Credit (CIFCPL) in FY23. - NFL's standalone net profit nearly quadrupled to Rs 668.82 crore in FY24, while the consolidated net profit more than doubled to Rs 545.07 crore. - Total expenses increased by 48.4% on a standalone basis, driven by a significant rise in employee benefit costs. - NFL disbursed Rs 3,097.82 crore under co-lending agreements in FY24 and closed a $38 million personal loans securitisation deal with JP Morgan.

Navi Finserv closes $24.5 Mn loan securitization transaction with Goldman Sachs

EntrackrEntrackr · 1y ago
Navi Finserv closes $24.5 Mn loan securitization transaction with Goldman Sachs
Medial

Navi Finserv has closed a $24.5 million loan securitization transaction with Goldman Sachs (India) Finance Private Limited, marking Goldman Sachs as the seventh multinational bank to partner with the company. This follows a $38 million securitization deal with J.P. Morgan earlier this year. The new transaction is structured through pass-through certificates rated IND AA (SO) by India Ratings, backed by a pool of unsecured personal loans managed by Navi Finserv, the company said in a press release. The funds will support Navi’s mission to simplify access to finance, enhance its operations with robust underwriting practices, and broaden financial inclusion by providing seamless credit and exceptional customer service. Founded in 2018 by Sachin Bansal and Ankit Agarwal, Navi Finserv operates as an RBI-registered NBFC in the middle layer category, offering personal and home loans. Navi’s revenue from operations rose to Rs 1,906 crore in FY24 from Rs 1,238 crore in FY23, as per its standalone financial statements. The company’s net profits stood at Rs 668 crore, largely driven by gains from the sale of its subsidiary.

Sachin Bansal quits as CEO of Navi; new chiefs appointed for Navi Tech and Finserv

EntrackrEntrackr · 11m ago
Sachin Bansal quits as CEO of Navi; new chiefs appointed for Navi Tech and Finserv
Medial

Sachin Bansal quits as CEO of Navi; new chiefs appointed for Navi Tech and Finserv The move follows RBI's recent lifting of restrictions on Navi Finserv, allowing it to resume lending. In October, the RBI had directed Navi Finserv and three other NBFCs to cease loan approvals, citing deficiencies in adherence to regulatory guidelines. Navi has announced the appointment of Rajiv Naresh as the new CEO of Navi Technologies Limited and Abhishek Dwivedi as the new CEO of Navi Finserv Limited. Sachin Bansal, the existing CEO of both companies, will transition to the role of Executive Chairman of the Navi Group while continuing to oversee the group's strategic direction. Both Rajiv Naresh and Abhishek Dwivedi have been part of Navi's early founding team and have held various leadership roles within the organization over the past six years. "This restructuring is a strategic milestone that enables us to sharpen our focus on long-term growth. Both Rajiv and Abhishek have played key roles in our growth, and I am confident that we will continue on this upward trajectory as they assume their new roles," said Bansal. According to the press release, Bansal will focus on Navi’s long-term strategy, expansion, fundraising, mergers and acquisitions, and improving compliance and risk management. He will also support Navi’s tech growth through innovation in technology and data science while guiding Rajiv and Abhishek in managing their businesses. After the changes, Abhishek will lead lending businesses, while Rajiv will handle non-lending businesses at Navi Group. Navi’s revenue from operations rose to Rs 1,906 crore in FY24 from Rs 1,238 crore in FY23, as per its standalone financial statements. The company’s net profits stood at Rs 668 crore, largely driven by gains from the sale of its subsidiary.

RBI lifts loan sanction ban on Sachin Bansal-led Navi Finserv

EntrackrEntrackr · 1y ago
RBI lifts loan sanction ban on Sachin Bansal-led Navi Finserv
Medial

The Reserve Bank of India (RBI) has lifted the restrictions previously placed on Navi Finserv, enabling the non-banking financial company (NBFC) to resume loan sanctions and disbursals. The restrictions were imposed due to concerns over regulatory compliance and pricing policies. The RBI’s decision indicates that Navi Finserv has addressed these issues promptly. In October, the RBI had directed Navi Finserv and three other NBFCs to cease loan approvals, citing deficiencies in adherence to regulatory guidelines. “..Satisfied with these measures and the company’s commitment to ongoing regulatory compliance, the RBI has now lifted the restrictions with immediate effect. This decision highlights the importance of adherence to regulatory standards in the financial sector,” said RBI in a statement. The other three NBFCs affected by the RBI’s directive were DMI Finance, Asirvad Micro Finance and Arohan Financial Services. However, the apex banking body has yet to allow the three NBFCs to disburse loans. Founded in 2018 by Bansal and Ankit Agarwal, Navi Finserv operates as an RBI-registered NBFC in the middle layer category, offering personal and home loans. Recently, Navi closed a $24.5 million loan securitization transaction with Goldman Sachs (India) Finance Private Limited. The company’s revenue from operations rose to Rs 1,906 crore in FY24 from Rs 1,238 crore in FY23, as per its standalone financial statements. The company’s net profits stood at Rs 668 crore, largely driven by gains from the sale of its subsidiary. Notably, the company has emerged as one of the fastest growing players in the UPI ecosystem. In October, it surpassed CRED to become the fourth-largest player in UPI by volume.

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