Flipkart's Sachin Bansal to put Rs 3.2k crore in banking biz

BENGALURU: Flipkart co-founder Sachin Bansal said he will deploy all the proceeds from the sale of his stake in the e-commerce player into his financial services venture Navi Technologies, which, through a subsidiary, has applied for a universal banking licence with Reserve Bank of India (RBI).
Bansal could invest $400-450 million (Rs 2,850 crore to Rs 3,200 crore) in the new venture, according to estimates, which will likely make it one of the biggest equity infusions by a promoter into a new financial services venture.
"I'm putting almost all of mine (money), that is going to happen in the next few days or weeks, whatever is left after Ola investment. All eggs in one basket," Bansal told TOI in an interview, while not commenting on exact numbers. The total amount is likely to be invested in multiple tranches.
‘Smartphone will be centre of consumer experience for us’
The 38-year-old IIT Delhi graduate, who started Flipkart in 2007, is adding heft to his new venture by adding former RBI director and ICICI Bank top executive Nachiket Mor, who was till recently head of Bill & Melinda Gates Foundation in India. He has roped in Paresh Sukthankar, the former deputy to HDFC Bank CEO Aditya Puri who had worked at India’s largest private sector lender since its inception in 1994, as an adviser.
Bansal had agreed to sell his over 5% stake in Flipkart to US retail giant Walmart in 2018 for about $1 billion, out of which he will get $750-800 million after tax. Out of this, Bansal has invested $300-350 million in companies like ride-hailing major Ola and electric bike maker Ather, besides some capital in treasury operations, including debt paper of companies like Piramal Enterprises.
According to Bansal, regulators are “very open to new ideas” and the reason why he has applied for a universal licence rather than a small finance bank is that he wants to operate across multiple sectors. “If you think like a consumer tech company rather than a traditional financial services company, you can solve big problems,” said Bansal, adding that for India to become a $5-trillion economy, the GDP-to-credit ratio has to improve from the current 57% to 100%.
Last year, Bansal acquired microfinance company Chaitanya Rural Intermediation Development Services (CRIDS), whose subsidiary Chaitanya India Fin Credit Private Limited (CIFCPL) has applied for the banking licence. While Bansal acquired CRIDS in his personal capacity, he is moving the investment under Navi Technologies. The last two players to get a universal banking licence in India were IDFC First Bank and Bandhan Bank, which had applied in 2013 along with 23 others and secured an inprinciple nod after about 10-11 months in 2014.
“We will keep the smartphone at the centre of consumer experience, rather than an add-on,” he said, indicating currently it's the other way round with branches being the centre of focus and mobile apps also crash at the start of the month, underlining how there is a gap in technology capability at big players. While Chaitanya will continue to focus on the lower end of the market, Bansal plans to launch a new product under the Navi brand which will focus on digital lending for the middle class.
Banking through digital channels has been growing at a record pace. As per RBI data, from September 2018 to October 2019, retail digital transactions by value saw a jump of 21% at Rs 302 lakh crore compared to around Rs 250 crore in a year-ago period.
Bansal is in the process of acquiring DHFL Insurance and Essel Mutual Fund to develop plays in the insurance and asset management plays.
Both deals are yet to receive regulatory approvals.