Udaan in talks to sell minority stake in its NBFC arm

Subscribe to enjoy similar stories. Mumbai: Udaan has initiated a process to sell a minority stake in its non-banking financial entity as the business-to-business (B2B) e-commerce platform looks to monetize assets while navigating a broader restructuring exercise, said three people aware of the matter. “The company is in early talks with advisory firm DC Advisory to help with the process, and the deal structures are still being decided," one of the people cited above said on the condition of anonymity.

The size of the stake on offer and the potential deal value are yet to be determined. According to a second person, foreign debt players are also evaluating an investment in the NBFC entity called Hiveloop Capital Pvt. Ltd, which is part of Udaan Capital, an arm of Udaan.

The unit also operates Indusage Techapp Pvt. Ltd, which hosts the digital lending platform. The moves come on the back of a larger restructuring plan as Udaan’s parent looks to streamline costs, reduce burn and improve unit economics to free up more cash for expansion amid attempts for a public listing next year.

“We do not comment on market speculations," a spokesperson for Udaan said. DC Advisory did not respond to Mint’s requests for a comment. Udaan Capital’s portfolio currently stands at about ₹500 crore, a third person said.

In the last six years, the company has recorded lending transactions worth a billion dollars through its NBFC arm, one of the persons said. Though Mint could not independently verify the valuation of the NBFC business, a general metric used is around 2-3 times the book value. It gives short-tenor small loans to the vendors on its platform.