MUMBAI: Fintech lender Bharatpe Ltd is preparing to enter the public markets after ending a long-standing rift with its high-profile former chief executive, posting its first full year of the current financial year (2024-25). The company aims to become profitable.
However, Nalin Negi, who took over as Bharatpe’s full-time chief executive officer in April last year, said the company has not yet started the process of appointing an investment banker for the initial public offering.
“(IPO) will probably take 18 to 24 months and depends on market conditions and other things. But we are seriously considering it and are taking steps towards it,” Negi said. said in an interview with Mint. At the moment we are talking to the bankers…we will probably start the process (of appointing a banker) in the next few months. ”
Negi did not disclose the size of the potential IPO.
BharatPe’s profitability and IPO ambitions are not new. In an interview with the Mint on August 4, 2022, company chairman Rajnish Kumar said the company is focused on achieving profitability within 6-10 months and aiming for an IPO within 18-24 months. He said he is doing so.
But recent talks with bankers for an IPO came after clearing several hurdles, including a conflict with ousted co-founder Ashnia Grover. In September, Mr. Bharatpe reached a settlement with Mr. Grover, ending years of bitter legal battles and public disputes. As part of the agreement, Grover will not be associated with BharatPe in any capacity nor will it become part of its shareholding.
According to company data, Peak XV Ventures currently holds 18.44% stake in BharatPe, Insight Partners holds 11.44%, and Ribbit Capital holds 10.45%.
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First objective: Ebitda profitability
Founded in 2018, BharatPe operates in payments business, investment platform and loan service provider business. The company derives more than 90% of its revenue from its sales division, which includes loans and revenue from payment soundboxes and point-of-sale terminals.
The company is also looking to launch a co-branded credit card business with Unity Small Finance Bank and plans to launch a line of credit product on UPI soon.
With 2.5 million active merchants, BharatPe recorded a record gross merchandise value (GMV). INR15,500 billion from both retail and consumer businesses.
The company recorded consolidated revenues from the following businesses: INR$142.6 billion from 2023 to 2024, more INRConsolidated pre-tax loss was $102.9 billion in the previous year. INRFrom 474 million INR941 million.
Negi said BharatPe turned Ebitda profitable for the first time in October. Ebitda refers to earnings before interest, taxes, depreciation, and amortization and is an important measure of operational efficiency.
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Trillion loan and Requi loan
Negi also said that Bharatpe is considering acquiring the remaining 39% of Trillion Loans Fintech, the non-banking financial company (NBFC) arm. Co., Ltd.
The Mint reported in March 2023 that BharatPe had acquired a majority stake in Trillionloans, whose founders Achal Mittal and Gautam also owned peer-to-peer lending NBFCLiquiloans.
Negi said Liqui Loans suspended its peer-to-peer lending business in August last year after the RBI tightened regulations on P2P lending and is in the process of repaying borrowers by March this year.
Trillionloans manages the following assets: INRCapital 3 billion, equity ratio 21%.
“We have no plans to list Trillion Loan. First we will acquire 100% of it,” Negi said. “It is BharatPe that will go public. It may take two to three years, sooner or later there will be pluses and minuses here and there.”
Also Read | BharatPe acquires NBFC Trillionloans
Sale of shares in Unity Small Finance Bank
The Mint reported on January 3 that Bharatpe was considering selling a 10-25% stake in Unity Small Finance Bank and had appointed investment bank Rothschild & Company to help find a buyer. BharatPe holds 49% stake in the small finance bank.
Negi confirmed the plan, but said that Bharatpe would have to complete the stake sale process involving Unity Small Finance Bank by 2030, which would not affect the company’s IPO plans. said.
As per the agreement with the Reserve Bank of India, Bharatpe will have to reduce its stake in Unity SFB to 10% by 2028.
“We need to (withdraw the Unity SFB stake) within eight years of starting the business. It’s only two-and-a-half to three years. So we have plenty of time to do this,” Negi said. Said. “There’s no need to rush too much. If you find the right partner, you can do it with small stakes or slightly larger stakes. But it’s not necessary right away,” he added. .
Also Read | BharatPe initiates stake sale process in Unity SFB
