Co-founder of Flipkart Sachin Bansal-led lending startup Navi Finserv has bagged $38 million from JP Morgan. The Bengaluru-based firm announced that they will use the raised capital to boost its digital lending business.

The significant investment deal marks one of JP Morgan's first securitization deals in India involving a Pass-Through Certificate (PTC) transaction specifically for personal loan space.

Navi Finserv's unsecured personal loans have been packaged into pass-through certificates (PTCs), providing a lucrative financial vehicle that pays out interest to the holder. JP Morgan has made its first foray into India's fintech industry with this PTC transaction, signaling entry into digital lending.

Talking about the deal the Executive Chairman of Sachin Bansal commented, “This deal serves as a substantial endorsement of the high quality of our loan portfolio and the sustained growth that Navi has been able to achieve in the past few years. We look forward to strengthening our relationship with JP Morgan even further in the future.”

The senior country Officer for India and Vice Chair for Asia Pacific at JP Morgan, Kaustubh Kulkarni mentioned, “This transaction marks our entry into the high-growth digital lending sector in India and is aligned with our firm-wide commitment to support the innovation economy. We are deepening our engagement with multiple companies in this space in India and providing them with capital raising and financial solutions, including liquidity and risk management.”

Earlier, Navi Finserv had successfully infused Rs.150 crore via private non-convertible debentures (NCDs) in May and Rs. 525 crore through public NCDs in March.

Although the company had planned for an IPO and filed a draft red herring prospectus for it by March 2022, it ultimately decided against executing the process due to unfavorable market circumstances. It's worth noting that this digital lending firm anticipates digital lending making up roughly 60% of the fintech industry by 2030.