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Time of India
a day ago
- Business
- Time of India
ETtech Explainer: Why are fintechs and their investors going after secured loans?
Live Events More and more fintech lending startups focusing on secured credit products such as loans against property (LAP), and loans against securities like mutual funds, are attracting venture capital (VC) home financing players like Vridhi Home Finance, Basic Home Loans, Easy Home Finance and others have been attracting venture investors, with their promise to bring about technology disruption in the sector. ETtech explains:Secured lending business is a financial service that provides loans to borrowers against collateral such as a vehicle or property. While banks and traditional non-banking financial companies (NBFCs) have been offering secured credit like home loans and auto loans for years, fintechs stayed away from these products, given the need for physical operations to evaluate the properties and assets. But now, startups are investing in branches and are building on-street teams to manage these shift comes as unsecured lending platforms witness a slowdown in the market, prompting startups to move towards secured credit products. Fintech platforms, including Paytm and Mobikwik, faced revenue pressure as banks and NBFCs scaled back on unsecured lending over the last few quarters. Even new-age NBFCs like Fibe, Kissht and others have seen stress on their books as new loan sanctioning slowed down. These trends have led to fintechs scouting for opportunities in secured Home Finance, Basic Home Loan, and Vridhi Home Finance together received nearly $150 million in equity capital from venture funds like Elevation Capital, Bertelsmann India Investments, Norwest Venture Partners, and Ranjan Pai's Claypond Capital. Mahaveer Finance, an NBFC based in Chennai, has raised $23 million from Elevation Capital and others with the aim of adding LAP and other similar NBFC Techfino has recently raised around $7.5 million from Stellaris Venture Partners and Saison Capital. Founded in 2019, the fintech company operates secured and unsecured lending models. The company focusses on secured more businesses move towards secured products, the unsecured lending startups are jumping onto the bandwagon. Fintech players Cred, BharatPe, and Paytm have announced a similar entry into secured products over the past year. Unsecured lending players like Kissht, Loantap, Fibe, and Kreditbee ventured into secured lending products such as are reducing their operational costs by making branches more efficient and leveraging technology to save costs and compete with big businesses. 'Traditionally, 70% to 80% of a housing finance company's costs go into running physical branches. We're bringing that down to 40% to 50% by leveraging technology, which enables lower customer acquisition costs and better interest rates,' said Atul Monga, CEO, Basic Home banks and larger NBFCs, branch expansions, while keeping costs in control, will remain a challenge for these while being attractive, tends to show up high non-performing assets (NPAs), which means fintechs will need to invest in strong collection teams. TransUnion Cibil's data released in January showed that LAP books showed among the highest NPA trends. As of September 2024, 1.7% of the LAPs were due for 90 days or more, said the report.'Investments in physical assets and branches would eat into the delta that fintechs can make between the cost of borrowing and rates they can offer their customers,' said Rohit Chokhani, founder, Easy Home Finance. 'This business will be sustainable only when there is a major scale.'
Time of India
2 days ago
- Business
- Time of India
As fintech lenders chase secured credit options, VCs up their bets
As unsecured lending slows, investor interest is shifting to secured lending platforms, attracting significant venture capital. Startups are expanding into secured loans like LAP and vehicle financing, but face challenges like high operational costs and default risks. Fintechs aim to offset this with technology-driven efficiency and selective physical branch expansion. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads The slowdown in the unsecured consumer credit market is resulting in an increase in investor interest in secured lending platforms, a sector dominated by traditional financiers till the past one year, venture funds which typically fund tech-first companies have been betting on home financing startups , branch-led secured lenders offering products such as loans against property (LAP), loans against securities like mutual funds, vehicle lending companies and asset-based lenders. Easy Home Finance , Basic Home Loan and Vridhi Home Finance received significant equity infusions from venture funds such as Elevation Capital, Bertelsmann India Investments, Norwest Venture Partners and Ranjan Pai's Claypond Capital. Together these startups, founded between 2017 and 2022, have raised around $150 million in equity capital from these recently, Techfino raised around $7.5 million (Rs 65 crore) from Stellaris Venture Partners and others. Mahaveer Finance, which has been lending for used vehicles since the early 1990s, raised $23 million (Rs 200 crore) from Elevation Capital and others with an aim to add LAP and other similar products to its portfolio.'When we look at NBFCs (non-banking financial companies), we typically index on highly experienced promoters or founders, great track record on execution, prudent approach to risk management and underwriting, and a technology driven mindset,' said Mridul Arora, partner, Elevation Capital. 'Valuation multiples, however, are more a function of market cycle and risk-reward for that particular investment versus being determined by whether it is family owned or not.'With the winds blowing towards secured products, even well-funded unsecured consumer lending startups are jumping onto the such as Kissht, Loantap, Fibe and Kreditbee, all unsecured consumer lending players, have now built secured products including LAP, mutual funds and vehicle loans. Among the large fintechs, Cred, BharatPe and Paytm have also announced their entry into secured credit products over the past one of these players like Kreditbee are also looking to build branch networks, hoping to underwrite the underlying assets better.'We have run down our consumer lending book by 50%. Now the focus is to build small business loans for retailers,' said Satyam Kumar, CEO of Pune-based startup recently closed $6.2 million in equity funding from July Ventures and a strong understanding of certain customer cohorts, these startups feel that they can scale up secured products quickly catering to consumers who might be too risky for an unsecured personal secured lending is a major opportunity to compete with banks and larger NBFCs, fintechs will need to invest heavily in branch could push up costs and make the small ticket size lending business unviable.'Investments in physical assets and branches would eat into the delta that fintechs can make between the cost of borrowing and the rates they can offer to their customers,' said Rohit Chokhani, founder, Easy Home Finance. 'This business will be sustainable only when there is major scale.'Add to that the need to build collection teams, another major cost item, given that these loans would require agents to take possession of machinery or property in the wake of a released in January by TransUnion Cibil on the credit market in India showed that as of September 2024, 1.7% of the loans under LAP were due for at least 90 days, among the highest in all categories of consumer compete with the traditional bigwigs, these startups are trying to disrupt two major business areas – one, to reduce the operational cost through technology and, second, to ensure that the online application forms can weed out unwanted customers without human intervention.'Traditionally, 70 to 80% of a housing finance company's costs go into running physical branches. We're bringing that down to 40 to 50% by leveraging technology, which enables lower customer acquisition costs and better interest rates,' said Atul Monga, chief executive officer, Basic Home LoanCurrently, customers can be charged 25-27% for micro LAP products, way more than 15-20% for a personal loan. Startups are trying to find out whether technology can help reduce these costs.'We have built our in-house loan origination and loan management systems, which helps make the entire application process digital. We will still invest in expanding our branch network over the years, but back-end processes need to be technology-led,' said Ratikanta Satpathy, cofounder, Techfino.
Hindustan Times
10-06-2025
- Business
- Hindustan Times
Akasa: On Terra Firma
To say that the Indian aviation market is undergoing a transformative churn is an understatement. Every player in the sector is undergoing a metamorphosis. While Air India is running a little behind schedule in its proposed phase of taking a leadership position (expected between April, 2024 and March, 2027), IndiGo is shedding its original skin to emerge as a full-service international player on a global stage. Air India's low fare wing (the merged entity that has emerged from Air India Express and AirAsia India) is rejigging and transforming itself into a full- blown Indigo in its original avatar while SpiceJet is struggling to stay afloat in a market full of uncertainties. It is therefore of some consolation to the sector that at least one player is an outlier: Akasa, the airline that surprised most by the timing of its launch in August 2022 - when the rest of the players were yet to emerge from the shadows of the 2020 global pandemic. It was in the midst of the 2020 pandemic and armed with many learnings after his two stints with Indian carriers - Jet Airways and Go First, Vinay Dube, the CEO of Akasa Airlines, began to write a business case of what would become Akasa in the future. The airline's official founding day was in November 2020, smack in the middle of one of the biggest crisis faced by airlines globally. At the time of writing this piece, the airline was awaiting final clearances to accept fresh funding and new board members. The amount or the names of investors have not been disclosed yet. Reports say the investment could be around US $100 million from a few new and long-term investors, of which a ₹300 crore investment is expected from Premji Invest, Claypond Capital (Ranjan Pai's family office) and 360 ONE Asset. Further funds infusion will come in through a doubling of the initial investment made by the original owners Jhunjhuwalas through the family trust while keeping their holding below 51%. The good, the weak and the uncertain: Here's a look at Akasa's opportunities and challenges. The Good: On Firmer Ground Akasa took flight in an industry that had witnessed a spate of bad news including the grounding of Jet Airways in 2019, amid a battering of the entire industry because of the pandemic. As a result, the Rakesh Jhunjhunwala-funded Akasa Air grabbed attention even before it took flight amid questions about its progress and future. If the founders hold a rear-view mirror before them, they would be justified to wonder whether this is the same market they entered. From the time of inception of the airline to now, a lot has changed both on the ground and in the air. One of its primary funders with deep pockets, the late Rakesh Jhunjhunwala passed and was no longer available to support it; one of its direct rivals Go First declared bankruptcy and ceased operations while another rival SpiceJet curtailed them. A third rival AirAsia India has since merged with Air India Express. Besides these, the Indian market has shed the gloom cast by the pandemic and Indians are traveling with a vengeance. Oil prices - one of the biggest party poopers - have been giving airlines a breather and the rupee is standing its ground to some extent. The future is looking rosier than the past has proved to be. To the airline's advantage and credit, the fact that it started without any of the pandemic baggage afflicting others helped it set the fastest pace of growth in a highly competitive scenario. But a lot of what has gone right for Akasa in the last three years is also of its own making. In an era of low aircraft availability, it has over 200 aircraft on order, a 75- B737 Max aircraft order in October 2021 followed by a 150 aircraft order in January 2020. Not only does it enjoy the cushion of its big order, its aircraft induction has been on track, swift and consistent, with its total fleet at nearly 30 in three years, no mean achievement since it makes it one of the first airlines globally to achieve this milestone. Compare for instance Akasa's 20 planes in its first year with IndiGo's 12. Other airlines in India like Go First and AirAsia India took so long to reach the same milestones that it renders a comparison superfluous. Aircraft utilisation, an important metric, too has climbed from 11 to 12 hours, according to people aware of the matter, although still behind IndiGo's 14 (with a far bigger fleet) and lower than desirable. Airline founder and CEO Vinay Dube however maintained that it was the 'best in class'. Moreover, the airline's route selection, if not ideal, has been better than most. It has not spread itself too thin with its 29 aircraft flying over 900 weekly flights with 22 domestic destinations and five international ones. It has taken a leaf out of IndiGo's book by getting into a market, increasing frequencies to get to number two or three in this aspect and connecting the dots within the network rather than opening new stations. Several players in India's aviation landscape have made a hash of this aspect in the past, failing to understand the nuts and bolts of a network strategy despite having experience. The airline's frequencies on some of the major routes (Mumbai-Delhi and Delhi-Bengaluru) however remain quite low, which industry insiders argue is a weak spot but is justified by the airline on the grounds that slots are not easily available. Akasa also offers a no-frills, efficient service on board with clean and new aircraft. Its on-time performance has been good and the passenger load factors which were expectedly low in the first couple of months have picked up enough for it not to have to discount its fares. The casual dress for crew (sneakers as opposed to heels, to make their life more comfortable) resonates well with the younger fliers, with many choosing Akasa as the more 'hip, with it' airline than the comparatively stodgy Air India. Many other parametres seem to be in its favour. The airline has been consistently reporting high loads with its latest numbers at 92-93% in April, having overtaken SpiceJet and Indigo, which are both in their mid -80s. Cancellations are amongst the lowest as are complaints. A quick comparison with closest rival SpiceJet on two parametres is quite revealing. Data from the Directorate General of Civil Aviation (DGCA) on passengers affected due to cancellations in April is 42 for Akasa against 4709 for SpiceJet. Further, a total of 8386 Akasa passengers were affected by delays beyond two hours in the month compared with SpiceJet's 23189. The airline has also done well on its on-time performance, despite having a small fleet in the beginning (deployment of alternate aircraft is harder with a smaller fleet). Now with almost 30 aircraft, the airline's on-time performance at the 6 metros at 77.5% is second to IndiGo's 80% but higher than Air India's 74% and far higher than SpiceJet's 60%. Again, taking a leaf out of IndiGo's books, the management of the airline has kept a low profile and focussed on getting the business in order unlike several players where the founders have been more focused on publicity. Keeping its head down has helped Akasa command a bigger market share today than SpiceJet, an airline that has been around since 2005, as per the latest data. Another aspect of the business that Dube highlighted as a strength is its distributed ownership with no one investor enjoying majority control and hence its strong board-run character, a matter of concern in many of the airline players in the past and some even today. Coupled with its team, which primarily comprises airline professionals with plenty of collective experience, he thinks they are set for a long and successful innings in a market that can easily support three IndiGos. The Not So Good But the question the industry is asking is that if the loads are high and if the environment is as favourable as it has been (closure of Go First, whittling down of SpiceJet, low oil prices, stronger rupee and robust traffic) where players like Indigo are making huge profits (FY 2025 profit for the airline was over ₹7,000 crore and FY 2026 is expected to be higher still) and even Air India claims to have made a small operating profit (FY25), why is Akasa making losses as high as it is. Losses in the airline remain high at ₹1,670 crore for FY 2024, with a revenue of just over ₹3,100 crore. Dube argued that losses are in line with their expectations and that the foundational year of any airline is dedicated to investing in its people, fleet, training, operating infrastructure and network and hence no airline registers profits in these years. While this may be true to an extent, it remains a fact that market leader IndiGo was profitable just after its first two years of operation. A former AirAsia India source says that back in 2019, after the demise of Jet Airways and when the overall environment was quite favourable, the airline did pull off operational profits in a few quarters. This despite all the bloopers the airline had made in its initial years and having a smaller fleet than what Akasa has at present. 'If the airline is not able to break even and turn in a small profit in this environment, it needs to look keenly at what it is not doing right,' said a former CFO of SpiceJet. Moreover, he pointed out that it takes very little for losses to add up quickly as there is perhaps no sector as susceptible to every kind of externality and many variables remain out of the airlines' control. A second red flag raised by sector analysts and experts is something they have raised since the start : that the airline seems top heavy. Again, while comparisons with IndiGo might not be completely fair, they are cited as the market leader started with a very lean team and remained so till it went public. An Increasingly Uncertain World But there's no denying the fact that from a passenger point of view, Akasa's survival and well-being is far more significant today than when it launched since the total numbers of players have shrunk and all the negative repercussions of a duopoly stare the flying public in its face. The future nonetheless remains full of uncertainties and depends almost entirely on the players own handling, as Dube agreed, adding that as the past has also shown us the fate of airlines in India is primarily in their own hands and very little to do with government actions or policy. Industry sources argue that while currently Akasa is considered 'too small to matter' but one of the worries in the future could be predatory pricing and other hurtful business tactics which any small fish in a big pond can expect. 'Competition in the form of a minor irritant is often welcomed by the biggies. We will have to see what happens when Akasa reaches a sizable number of planes for the bigger players to notice it,' said a former DGCA official. He pointed out that competition can be aggressive even for talent within the industry and that Akasa had already 'shot itself in the foot once' when it decided to take its own pilots to court in 2023. Although Akasa seems to have weathered its 2023 storm with crew, it has to make sure it doesn't ruffle any more feathers. While Dube maintained that they are well positioned with regard to their future crew requirements, the airline's ability to attract and retain talent with the formidable duopoly of Tatas and IndiGo remains under cloud. Airline industry sources said that the airline has struggled to attract and recruit commanders and crew from almost the word go but after IndiGo started rehiring and Tata's have started luring crew, their struggle deepened. It has however set up its own learning academies in Gurugram and Bengaluru, where it trains 750 employees every month. So even as the Akasa team buckles up and looks ahead to its next phase, being nimble, displaying maturity in handling crew and passengers and keeping its ears and eyes open will hold it in good stead. Anjuli Bhargava writes about governance, infrastructure and the social sector. The views expressed are personal.
Time of India
06-06-2025
- Health
- Time of India
Wellness and longevity startup Biopeak raises $3 million from Ranjan Pai's Claypond Capital, Accel's Prashanth Prakash, others
Live Events Wellness startup Biopeak has raised $3 million in seed funding from Claypond Capital—the family office of Manipal Group chairman Ranjan Pai—Accel's Prashanth Prakash, and Zerodha's Bengaluru-based startup has launched its first longevity clinic and plans to expand to other metro cities in the coming year. Biopeak offers a personalised preventive healthcare service, combining diagnostics, AI, and concierge-style care to predict health risks and craft tailored intervention plans.'We offer solutions that are predictive, not reactive,' cofounder and CEO Rishi Pardal told ET. The service includes lab tests, imaging such as MRIs and CT scans, and non-invasive diagnostics to assess organ system health and recommend long-term regimens. 'The funding will go towards building our scientific capabilities, expanding the AI platform, and scaling operations,' Pardal at athletes, health-conscious individuals, and people with unresolved chronic issues like IBS, Biopeak's approach integrates traditional diagnostics with AI insights. The startup has partnered with IISc and Longevity India—a scientific forum backed by Prakash—to tailor interventions for South Asian genetics.'There are breakthroughs in cellular tech and AI-led diagnostics, but they're not widely accessible,' said Prakash. 'Medicine 4.0 is about predictive, proactive care using personalised data. Clinics like Biopeak can deliver this new model of healthcare.'Each Biopeak client undergoes over six hours of multidisciplinary consultation, with specialised modules for gut health, women's health, ageing, skin, and musculoskeletal function.
Time of India
02-06-2025
- Business
- Time of India
KKR commits $600 m credit finance to Manipal group
KKR, a leading global investment firm, and Manipal Education and Medical group announced a $600-million credit financing arranged by KKR Capital Markets to the group. The investment will accelerate the group's expansion and growth by providing flexible, structured capital matched to its long-term strategic needs. Tired of too many ads? go ad free now Gaurav Trehan, co-head of KKR Asia Pacific and head of Asia Private Equity, KKR said, "The Manipal group has built a strong reputation over the decades as one of India's healthcare and education leaders, and we look forward to supporting and contributing to their continued success.' Ranjan Pai, chairman of Manipal Education and Medical Group, said, 'KKR's longstanding India focus and flexible capital approach, as well as alignment with our long-term vision, present a strong fit for us.' The Manipal group has major businesses across the healthcare, education, and health insurance sectors, including Manipal Health Enterprises, one of India's top multispecialty hospitals chains. The investment will be routed from KKR's Asia Pacific Credit strategy and insurance platform. Since 2019, KKR has committed over $8 billion across around 60 credit investments under its Asia Pacific Credit strategy, accounting for a total transaction volume of over $21 billion. Additional details of the transaction were not disclosed.
