Sachin Bansal-led lending startup Navi Finserv raises $38 million from JP Morgan

Flipkart co-founder Sachin Bansal-led lending startup Navi Finserv has raised $38 million from JP Morgan in a significant securitisation deal.

The Bengaluru-based firm will use the raised capital to boost its digital lending business.

The investment marks one of JP Morgan's first securitisation deals in India involving a Pass-Through Certificate (PTC) transaction specifically for personal loan space.

Structure and purpose of the transaction

The transaction is structured in the form of pass-through certificates (PTC) and is backed by a pool of unsecured personal loans originated and serviced by Navi Finserv. PTCs enable the holder to receive interest payments, making it an attractive financial instrument.

This is JP Morgan’s inaugural PTC transaction in the Indian fintech space, highlighting its entry into the digital lending sector.

Leadership comments

“This deal serves as a substantial endorsement of the high quality of our loan portfolio and the sustained growth that Navi has been able to achieve in the past few years. We look forward to strengthening our relationship with JP Morgan even further in the future,” said Sachin Bansal, Executive Chairman and CEO of Navi Finserv.

“This transaction marks our entry into the high-growth digital lending sector in India and is aligned with our firm-wide commitment to support the innovation economy. We are deepening our engagement with multiple companies in this space in India and providing them with capital raising and financial solutions, including liquidity and risk management,” said Kaustubh Kulkarni, Senior Country Officer for India and Vice Chair for Asia Pacific at JP Morgan.

Recent funding

Prior to this deal, Navi Finserv had raised Rs 150 crore through private non-convertible debentures (NCDs) in May and Rs 525 crore from public NCDs in March. 

Despite planning for an IPO and filing a draft red herring prospectus in March 2022, Navi did not proceed with the listing due to unfavourable market conditions.

Notably, the digital lending firm expects digital lending to comprise around 60% of the fintech market by 2030.