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Insurance is Picking Steam with India’s Ace Investors

Insurance as a sector has garnered the interest of top Indian investors the latest being Sachin Bansal
BY Jaspreet Kaur
Feature Writer, BusinessEx
Jan 11,2020

Indian home finance firm, DHFL General Insurance, which has been striving for survival, has recently sought a buyer. According to The Economic Times’ report, Sachin Bansal, Former Flipkart CEO, has purchased DHFL from Wadhawan Global Capital for INR 100 crore.

The acquisition is counted as Bansal’s strategic move to make his presence in the Indian finance services segment. Owing to this, he has made an array of investments post his Flipkart exit. 

The transaction has been done via Bansal and Ankit Agarwal-led Navi Technologies, which was earlier known as BAC Acquisitions. Bansal and Agarwal were batchmates in IIT-Delhi. 

Debt-laden DHFL Finds a Saviour 

Wadhawan Global Capital-led firm, Dewan Housing is currently facing bankruptcy verdict in National Company Law Tribunal (NCLT). Prior to cash strapping, WGC, which controls 39 per cent stakes in the home finance firm, used to administer assets worth over $22 billion via its investment, protection and lending platforms.

According to the cited media report, DHFL owns nearly INR 400 crore assets that are under management presently.

DHFL’s acquisition comes after Bansal-led Navi Technologies bought a major stake in microfinance company, Chaitanya Rural Intermediation Development Services in the previous year. In the last transaction, Bansal acquired over 90 per cent shares in Chaitanya and consequently, became Chief Executive of the firm in the same year. During that time, he had proclaimed that he would infuse INR 739 crore in the non-banking financial company. 

In recent times, Navi acquired another software company, MavenHive. The acquisition sum has not been disclosed by both companies. As a part of the transaction, employees along with Founders of MavenHive, Anandha Krishnan and Bhavin Javia were brought on board.

After Exiting Flipkart, Techpreneur Eyes on Startups 

After departing the e-commerce firm, Flipkart, Bansal did not come to a halt. Besides an entrepreneur, he turned into an active investor and infused money in several startups over time. In the last year, he began financially backing firms through debt funding, which include Ola, INR 6.7 billion in its Series J round, Navi Technologies, seed funding of $7 million and INR 9 million in venture round, KrazyBee, offered INR1 billion, Ather Energy, infused $51 million, Piramal Enterprises Ltd, invested INR 2 billion in post-IPO debt, Chaitanya, invested INR 250 million, U Gro Capital, sowed INR 750 million, according to Crunchbase.

Besides this, Bansal has backed startup companies such as Bounce and Vogo. Furthermore, he has infused in an array of finance organizations like IndoStar Finance and Altico Capital. One of his biggest capital infusion was in Ola, wherein he infused INR 650 crore.

In the previous year, Avanse Financial Services, wherein Dewan Housing controlled a 30.63 per cent stake, was sold a 49.04 per cent share by WGC. Its buyer was Warburg Pincus Group.

Blackstone-managed private equity funds bought a 97.7 per cent share in Aadhar Housing Finance, wherein Dewan Housing and WGC are the sole controlling stakeholders, in June 2019.  

Sachin Bansal Venturing into Banking and Insurance Sector 

After acquiring DHFL, Bansal has decided to venture into the financial services sector through its firm, Navi Technologies, according to Mint. 

According to the cited media report, Navi Technologies proclaimed that its microfinance arm, Chaitanya India Fin Credit Pvt. Ltd (CIFCPL), has formally approached the Reserve Bank of India (RBI) for a universal banking license.

In September 2019, Bansal acquired Chaitanya Rural Intermediation Development Services Pvt. Ltd (CRIDS) for INR 739 crore and became its CEO. CRIDS reportedly operates CIFCPL, which works in a secured and unsecured credit segment.

The transaction comes following International Finance Corporation decided to infuse nearly $30 million in Navi for a 4.5 per cent stake. 

IFC said in a disclosure that CIFCPL has made an application to the RBI for a universal banking license under the 2016 guidelines for ‘on tap’ licensing of universal banks, reported Mint. 

“IFC’s investment in NAVI is to support the transformation of CIFCPL into a technology-led universal bank, or NAVI Bank, which would provide mass-market banking solutions for individuals and micro, small and medium enterprises (MSME) and select corporates," IFC said.

CIFCPL has applied for the license to go beyond financial inclusion by making banking simple, accessible and affordable via a consumer-centric and technology-driven approach, the media agency reported citing Navi Technologies’ official statement.

“Our vision is to go beyond what hitherto has been broadly defined as ‘financial inclusion’ and provide access to formal financial services using technology that people can use intuitively and easily," Bansal, who is also the CEO of Navi Technologies, said in the statement.

 

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