Navi’s FY26 Losses Quadruple: UPI Investment Drives Surge

Navi, the company co-founded by Sachin Bansal, experienced a near fourfold surge in its consolidated net loss for FY26, reaching Rs 466 crore. This marks a substantial increase from the Rs 126 crore loss reported in the previous fiscal year, primarily driven by extensive spending on the Unified Payments Interface (UPI) and the development of new business segments.

Investment Strategy and Future Outlook

Despite these current losses, Navi’s cofounder and CFO, Ankit Agarwal, expressed confidence in the company’s ability to achieve profitability in FY27. The strategic investments aim to establish diverse revenue streams beyond Navi’s traditional lending operations.

Navi’s revenue from operations increased by 16% to Rs 2,982 crore, while its total income rose by 15% to Rs 3,091 crore. Agarwal highlighted UPI as the primary engine for customer acquisition, with lending, insurance, and investments serving as key monetization avenues.

UPI Expansion and Monetization Efforts

The company has significantly advanced its position in the UPI sector, seeing its transaction share nearly double to 4% in July. This expansion positions Navi as India’s fourth-largest consumer app for UPI, trailing PhonePe, Google Pay, and Paytm.

Navi is observing a decline in customer acquisition costs while revenue per active user is increasing through bill payments, advertising, and other UPI-linked services. The company is not relying on merchant discount rate (MDR) charges for UPI monetization and currently has no immediate plans for merchant acquisition, despite recent amendments to digital payments law permitting such charges.

Lending Portfolio Performance and Regulatory Actions

Within its lending portfolio, collateral-free personal loans constitute a significant 88% of Navi’s assets. This focus persists even after the Reserve Bank of India (RBI) increased risk weights on such loans.

Navi Finserv, the group’s profitable lending arm, reported a 32% growth in standalone net profit to Rs 292 crore. Its assets under management expanded by 57% to Rs 13,138 crore, with disbursals climbing by 73% to Rs 23,287 crore, while gross bad loans halved to 1.25%. The RBI had previously imposed a temporary ban on Navi Finserv from fresh lending due to concerns over excessive rates, lifting restrictions after the company revamped its pricing and systems.

Navi’s intensified focus on UPI and unsecured loans from Navi Finserv is expected to drive its anticipated return to profitability in the upcoming fiscal year.