Happy Monday! This is Vedica with today's newsletter. I hope you all had a great weekend, and are looking forward to a new week. To start off, we have news of Reliance's potential spending spree and
➡️ Reliance is actively looking to acquire startups, as well as mature companies, to strengthen its digital commerce, 5G and fibre-to-the-home businesses to create India’s largest digital ecosystem spanning telecom, retail and payments.
➡️ People aware of the company's plans have said that Reliance, which has raised more than ₹2.2 trillion through stake sales, is likely to go on a shopping spree as the coronavirus pandemic has clouded the prospects of cash-strapped businesses, making them takeover targets.
➡️ During the Reliance AGM, the company announced that it had become zero net debt, after offloading stakes in the Jio Platforms unit. However, the company is planning to use the money it raised over the past few months to invest across businesses, rather than retire debt
➡️ We have covered recent news of Reliance selling stakes in its retail business, and the company is likely to use those funds for its Future group acquisition pay-out/debt repayment. Last month, Reliance Retail acquired the retail and wholesale business and the logistics and warehousing business from Future Group for ₹24,713 crore.
➡️ In the last three years, Reliance Industries has made 30 acquisitions in the startup space, and it will be interesting to see what new acquisitions the company decides to make and in which spaces. Reliance definitely has the way chest to become a massive player on the start-up scene, but there will be questions about how these acquisitions do once they are part of the Reliance umbrella.
2. https://bit.ly/3hATnjH: Navi emerges as one of the top consumer lenders during the pandemic
➡️ Entrackr reports that Sachin Bansal's new venture, Navi, has become one of the country's top lenders by being one of the few lenders to disburse loans to low-income groups during the pandemic. According to sources Navi has disbursed loans worth over Rs 130 crore since its launch in May this year, with an entire amount being given since the pandemic began.
➡️ Navi offers loans in the range of Rs 10,000 to Rs 500,000, with an average loan size of somewhere between Rs 30,000 to Rs 35000. It is estimated that the company has disbursed loans to over 40,000-45,000 people in the past four months.
➡️ Navi has been able to gain this scale because traditional lenders have been reluctant to disburse loans to low-income segments where the demand for credit is the highest. Navi has also been marketing aggressively with Sensor Tower data showing the company has seen ~1.5M downloads between May - August.
➡️ It's worth noting here that though technically a new fintech player, Navi acquired Chaitanya Rural Intermediation Development Services Private Limited (CRIDS) in December last year and rebranded it as Navi Finserv. CRIDS has been lending loans to lower-income groups since 2012 and has a strong presence in states like Karnataka, Jharkhand, Bihar, Maharashtra and Rajasthan. Navi has clearly made the most of the acquisition, but as is the case with any lending business, we'll have to see what loan recovery and NPAs look like!
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