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Sachin Bansal\'s Navi buys insurer, seeks bank licence; IFC values firm at $660 mn
Sachin Bansal

Flipkart co-founder Sachin Bansal has acquired a general insurance company and applied for a bank licence, as he takes rapid strides to build a diversified financial services business after leaving the online retailer in 2018.

Bansal, one of the poster boys of India’s startup community, had started Flipkart along with Binny Bansal in 2007 and sold it to Walmart Inc. at a staggering valuation of almost $21 billion. Ever since, he has been deploying the $1 billion he got by divesting his own stake in Flipkart to invest in financial services or fintech companies.

In his latest deals, Bansal’s Navi Technologies Pvt. Ltd has acquired DHFL General Insurance Ltd from Wadhawan Global Capital and is selling a minority stake to International Finance Corporation in its bid for a banking licence.

The value of the DHFL deal was close to Rs 100 crore, The Economic Times reported citing people in the know. The report said the transaction is a distress sale by Wadhawan Global, which used to run Dewan Housing Finance Corp until the home financier went bankrupt last year.

IFC, the World Bank’s private-sector investment arm, said in a disclosure it is picking up a 4.5% stake in Navi for Rs 210 crore ($30 million). The investment values Navi—currently almost entirely owned by Bansal—around $660 million.

IFC, which makes both direct investments and limited partner-style bets on private equity funds, said its investment will support Navi’s efforts to launch a technology-led universal bank. The bank would provide mass-market services for individual and micro, small and medium enterprises (MSME) as well as select corporate houses, it said.

The banking application shows Bansal’s intent to build a financial services group. Previously, he has made debt or equity investments in companies such as Kissht, Lendingkart Finance Ltd, Northern Arc Capital Ltd and IndoStar Capital Finance Ltd. Bansal is also acquiring Essel Mutual Fund and had invested Rs 650 crore in ride-hailing company Ola last year.

A bank would be the natural extension for Bansal after he decided to acquire non-banking financial company Chaitanya Rural Intermediation Development Services Pvt. Ltd late last year in his biggest bet since quitting Flipkart. Bansal had agreed to invest Rs 739 crore (about $104 million) in Chaitanya Rural and take charge as its CEO.

Navi, previously known as BAC Acquisitions Pvt. Ltd, now plans to take over Chaitanya Rural from Bansal.

IFC said that Chaitanya Rural has a wholly owned subsidiary, Chaitanya India Fin Credit Pvt. Ltd, which has made an application to the Reserve Bank of India for a universal banking licence. The non-bank lender currently provides loans to low-income customers in rural areas largely on the joint-liability-group lending model.

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