Sachin Bansal's Navi buys insurer, seeks bank licence

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 service business after leaving the online retailer in 2018.

Sachin Bansal, who is 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 $1 billion he got by divesting his own stake in Flipkart, to invest in financial services or fintech companies.

In his latest deals, Sachin Bansal’s Navi Technologies Pvt Ltd 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 transaction is a distress sale by Wadhawan Global, which used to run Dewan Housing Finance Corporation until the home financier went bankrupt last year.

IFC, the World Bank’s private-sector investment arm, said in a disclosure that it is picking up a 4.5 per cent stake in Navi Technologies for Rs 210 crore. 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.

The banking application shows Sachin Bansal’s intent to build a financial services group. Earlier, 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 Sachin Bansal, after he decided to acquire non-banking financial company-Chaitanya Rural Intermediation Development Services Pvt Ltd late last year in his biggest bet after quitting Flipkart. He had further agreed to invest Rs 739 crore in Chaitanya Rural and take charge as its CEO. Meanwhile, Navi plans to take over Chaitanya Rural from Sachin 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.