Ananya Birla-led Svatantra Microfin Pvt Ltd has recently entered into a definitive agreement to acquire Chaitanya India Fin Credit Pvt Ltd, a subsidiary of fintech startup Navi backed by Sachin Bansal. The acquisition, valued at INR 1,479 crore, reflects Svatantra’s strategic move to strengthen its position in the microfinance sector.
Navi’s Shift Towards Digital-First Businesses
Sachin Bansal, Chairman and CEO of Navi, highlighted that this deal aligns with Navi’s strategic focus on digital-first ventures. He emphasized the significant growth of Chaitanya India Fin Credit, which expanded nearly sixfold over the past four years, making credit accessible to rural India. The transaction supports Navi’s commitment to digital-first financial services through the Navi Group.
Svatantra Microfin Synergies and Expansion Plans
Svatantra Microfin plans to leverage technological synergies with Chaitanya to expand its user base and operations. The acquisition positions Svatantra as the second-largest non-banking finance company (NBFC)-microfinance institution (MFI) in India. The combined entity will boast an asset under management of INR 12,409 crore and reach over 3.6 million active customers through 1,517 branches across 20 states.
Svatantra Microfin Challenges and Evolution of Chaitanya
Navi Technologies acquired Chaitanya India Fin Credit in 2019 from BAC Acquisitions. Chaitanya was previously known as Chaitanya Rural Intermediation Development Services (CRIDS). During this period, Chaitanya experienced significant asset growth. However, it faced challenges such as a decreasing capital adequacy ratio (CAR) and the rejection of its banking license application.
Navi’s Financial Landscape and Future Prospects
The Navi Group reported a loss of INR 362 crore in FY22, compared to a profit of INR 71 crore in FY21. Facing funding constraints in a challenging startup ecosystem, Navi has taken measures to conserve cash, including staff reductions. Amid the evolving financial landscape, Navi is awaiting clarity on its INR 4,020 crore IPO, as it navigates shifts in its business strategy to ensure sustainable growth.
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