Navi Finserv Ltd, led by Sachin Bansal, announced that it has successfully raised ₹163 crore in a securitization transaction involving Citi India and Northern Arc. This pass-through certificate (PTC) transaction is a significant milestone for Navi, as it marks the company’s first AAA-rated securitization in the personal loans sector.
Citi India’s participation in this transaction is noteworthy as it represents the bank’s inaugural exposure to securitized lending within India’s digital lending landscape. The transaction’s success is attributed to its well-structured features that have earned it the highest rating.
Over the past 16 months, Navi Finserv has completed more than 30 personal loan securitization transactions, totaling over ₹3,400 crore. These transactions have involved multiple investors from banks and non-banking financial companies (NBFCs), underlining Navi’s active engagement in the securitization market.
In this particular transaction, Citi India acted as the senior investor, while Northern Arc served as the subordinate investor and backup servicer. The funds generated from the securitization will be directed towards advancing loans to Navi’s customers, contributing to the company’s ongoing operations and expansion.
Sachin Bansal, co-founder of Navi Group, expressed pride in Navi Finserv’s entry into the AAA-rated club through this transaction. He emphasized the potential of this successful deal to open up new avenues for financing and broaden Navi’s investor base.
K. Balasubramanian, Managing Director and Head of Corporate Bank for Citi in South Asia, commended the transaction’s unique structure and robust features that contributed to achieving the highest rating. He highlighted that this transaction is not only Citi India’s first venture into securitization within the personal loans asset class but also its first engagement in securitized lending with an Indian digital lending client.
Ashish Mehrotra, Managing Director and CEO of Northern Arc Capital, emphasized the transaction’s risk-reducing structure and strong risk management facilitated by Northern Arc’s expertise. The company has a significant track record in securitization, having led over 1,600 transactions aggregating to more than ₹50,000 crore.
This successful securitization transaction highlights the growing interest and participation of financial institutions in India’s digital lending space, further enhancing the financial ecosystem and accessibility to credit for borrowers.