Premji Invest’s latest bet? A tech-powered NBFC led by a former ICICI banker

The firm, which makes early and growth-stage investments in start-ups, is looking to pick up a 20% stake in the NBFC, which will focus on secured small business loans.   

The NBFC, which has not been given a name yet, is looking to raise around ₹500 crore from Premji Invest and a couple of other investors, added the person cited earlier. 

“There is a great need for tech-driven data-led NBFC which focuses on secured lending,” he said. “Being fully digital, data and tech driven, this will be a low opex model.” 

Bhaskar, who previously worked in several roles at ICICI Bank, including digital banking head, is now an operating partner of the India Private Markets Team at Premji Invest. He is currently in the process of applying for an NBFC licence with the Reserve Bank of India (RBI).

According to RBI norms, an NBFC can be incorporated if it has a minimum net owned fund of ₹10 crore.

Premji Invest’s recent bets

On 12 June, VCCircle reported that Premji Invest had invested in Premier Energies Ltd, a maker of solar cells and solar modules, and Indegene Ltd, a life sciences company, over the past few days. This is in addition to the two investments they made earlier this year. 

The family office first teamed up with Manipal Group chairman Ranjan Pai’s family office, Claypond Capital, to invest in Akasa Air in early February. 

The firm also subscribed to shares worth about ₹23 crore in Ajax Engineering Ltd as part of the anchor allotment by the concrete equipment manufacturing company ahead of its initial public offering (IPO).     

According to its website, TVS Credit and KreditBee are its two investments in the non-bank sector within its financial services portfolio. Last year, it saw at least 15 transactions, including investments in fintech firm Mintifi, furniture retailer WoodenStreet, jewellery brand Giva, wealth management startup Dezerv, and US-based legal-tech startup EvenUp. 

“The secured MSME (Micro, Small and Medium Enterprises) lending space is seeing a lot of traction, unlocking the assets owned by businesses for debt capital,” said digital lending expert Parijat Garg. “Several lenders have recently diversified from being unsecured players into secured play. LAP (loans against property) has grown by 22%+ YoY (year-on-year) over the past few years, with NBFCs leading with 38% share.”

Premji Invest has also invested in two life insurance companies—HDFC Life and ICICI Prudential—the National Stock Exchange (NSE), and Smallcase, a stock market investment app.