In line with the top line degrowth, its PAT from continued operations also slipped 41% year-on-year (YoY) to INR 155.6 Cr in FY24
Including Navi Finserv’s profit from discontinued operations, Chaitanya, the startup’s net profit more than doubled YoY to INR 545.1 Cr in FY24
Its total expenses saw a marginal increase to INR 1,750.4 Cr in the reported year from INR 1,743.9 Cr in FY23
Flipkart cofounder Sachin Bansal-led fintech startup Navi Technologies’ subsidiary Navi Finserv witnessed a degrowth in its operating revenue and operating profit during the financial year 2023-24 (FY24), hurt by a decline in its interest income and jump in loan write-offs.
Navi Finserv’s consolidated operating revenue fell 6.6% to INR 1,906.2 Cr during the year under review from INR 2,040.6 Cr in FY23. In line with the top line degrowth, its profit after tax (PAT) from continued operations also slipped 41% year-on-year (YoY) to INR 155.6 Cr in FY24.
However, the fintech major made significant gains by divesting its entire holding in its microfinance subsidiary Chaitanya India Fin Credit Private Limited. Including Navi Finserv’s profit from discontinued operations, Chaitanya, the startup’s net profit more than doubled to INR 545.1 Cr in FY24 from INR 264.2 Cr in the previous year.
It is pertinent to note that in August 2023, Ananya Birla-led Svatantra Microfin Pvt Ltd signed a definitive agreement to acquire Chaitanya for INR 1,479 Cr and completed the acquisition in November 2023.
Earlier, Bansal acquired Chaitanya Rural Intermediation Development Services (CRIDS) via BAC Acquisitions (now Navi Technologies) in 2019. CRIDS was later rebranded as Chaitanya India Fin Credit. The acquisition helped Navi acquire an NBFC licence. However, the Reserve Bank of India (RBI) rejected Chaitanya India Fin Credit’s application for an ‘on tap’ universal banking licence in 2022.
Navi Finserv was incorporated in 2012 and provides various kinds of loans, including personal, vehicle, and home loans. A majority of its revenue comes from interest income on loans, investments, and deposits with banks.
The startup’s total interest income fell over 12% YoY to INR 1,611.1 Cr in FY24. Its net gain on derecognition of financial instruments under amortised cost category also fell 26.8% YoY to INR 102.4 Cr during the year.
Navi Finserv’s total asset under management (AUM) stood at INR 8,527.2 Cr in FY24 growing from INR 6,791 Cr at the end of FY23. The startup also had total loan disbursements worth INR 16,006 Cr in FY24 as against INR 12,630 Cr the year before.
Zooming Into Expenses
Navi Finserv’s total expenses saw a marginal increase to INR 1,750.4 Cr in the reported year from INR 1,743.9 Cr in FY23, with finance cost alone comprising over 37% of its total spending.
Finance Cost: The startup’s finance cost declined about 5% to INR 657.7 Cr in FY24 from INR 691.6 Cr in the year before.
Employee Cost: Navi Finsev cut its employee benefit expenses by a massive 42% to INR 149.9 Cr in FY24 from INR 257.9 Cr in the year before.
It is worth noting that the company fired around 200 employees across multiple departments in July last year.
It spent INR 120.3 Cr on salaries, wages and bonuses in the year under review as against INR 217.1 Cr the previous year.
Loans Written Off: The company’s spending on loan write-offs jumped to INR 406.2 Cr in FY24 from INR 125.4 Cr in the year before.
Overall, its impairment on financial instruments stood at INR 495.6 Cr during the year from INR 397.9 Cr in FY23.
Software Support Charges: Navi Finserv’s spending under this head grew over 50% YoY to INR 248.2 Cr in FY24.
Navi Finserv converted into a public entity in March 2022. Its holding company Navi Technologies
got SEBI’s nod for IPO but didn’t go ahead with public listing plans.
In July this year, Navi Finserv did a final close of a $38 Mn personal loans securitisation deal with JP Morgan.
Earlier this year, the company also raised INR 150 Cr via bond issuance from several investors, including Dadachanji Group chairman Kairus Shavak Dadachanji, Pervin Kairus Dadachanji, and Rishad Kairus Dadachanji.
