Ananya Birla's Svatantra To Buy Chaitanya From Sachin Bansal's Navi For Rs 1,479 Crore

Ananya Birla's Svatantra Microfin Pvt. is all set to acquire Sachin Bansal-led Navi Group's Chaitanya India Fin Credit Pvt. to become India's second largest microlender.

Chaitanya India Fin Cred will be acquired for Rs 1,479 crore and the transaction is expected to be completed by the end of 2023, subject to receipt of regulatory approvals, according to an official statement from Svatantra. The combined entity will have more than 3.6 million active customers and assets under management of Rs 12,409 crore as on March 31, it said.

"The proposed acquisition will propel Svatantra to a significant leadership position," Ananya Birla, founder and chairperson, Svatantra, said in the statement. "The combined entity will command a substantial reach, enabling the delivery of a diverse array of financial services to our clients across a geographically diverse portfolio."

For the Navi Group, the deal marks a turn in strategy, where the company aims to be a digital-first financial services firm.

"This transaction is in line with our strategic plan to focus on our digital-first businesses, as we continue our digital-first financial services through the Navi Group," Bansal said in the statement.

In May 2022, the Reserve Bank of India rejected a bank licence application by Bansal when he sought to convert Chaitanya Fin Credit into a universal lender. The application could have been rejected owing to the promoter's lack of relevant banking experience, BQ Prime had reported.

Experts also said that Svatantra's acquisition is strategic in nature, as it gives it an upper-hand in expanding its operations.

According to the official website, the company has its operations across 19 states, as of June 2023. Of these, there are three branches each in North and South India, four in the West, and nine in the East.

"The acquisition is synergistic as it gives Svatantra strategic outreach in South India. From the sector view point, while Birla Group's Svatantra is known for its efficient operations and responsible lending, higher size will further strengthen it, as it will also contribute to higher efficiency through economies of scale," said Dr Alok Misra, chief executive officer and director of Microfinance Industry Network.