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BharatPe Takes Charge of Trillion Loans Fintech, Boosting Lending Portfolio

BharatPe sets sights on lending dominance with strategic move

22 March 2023


Jayashri Ghorpade

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  • All necessary approvals from the RBI have already been secured by BharatPe to proceed with the deal.

  • By enabling BharatPe to offer loans and credit facilities, the deal allows the company to bypass its reliance on other NBFCs.

  • Liquiloans, operated by Trillion Loans' co-founders Achal Mittal and Gautam Adukia, supports BharatPe's P2P lending product.

According to sources familiar with the matter, BharatPe, a leading fintech company, has acquired a majority stake in Mumbai-based non-banking financial firm Trillion Loans Fintech for approximately INR 300 Cr. BharatPe has already obtained all regulatory approvals from the Reserve Bank of India to purchase a 51% stake in the NBFC.

By obtaining an NBFC license, BharatPe can easily offer loans and credit facilities, making significant progress in the lending space. This move not only reduces the burden and complexity associated with offering such services on a platform, but it also allows BharatPe to circumvent reliance on specific NBFCs, resulting in the ability to expand its offerings autonomously.

Trillion Loans is the brainchild of Achal Mittal and Gautam Adukia and allows users to avail gold loans with direct money transfers.

Curiously, both Mittal and Adukia, who founded the P2P lending platform Liquiloans, which has a long-standing relationship with BharatPe, are also involved with BharatPe's P2P investment product, powered by Liquiloans, which has been in the spotlight for flouting P2P lending norms. Additionally, Liquiloans collaborates closely with Kunal Shah-led fintech startup CRED. Notably, while the Reserve Bank of India (RBI) has been hesitant to grant NBFC or even P2P lending licenses, Liquiloans has been mandated by the RBI to hold both such licenses.

Achal Mittal, son of former RBI official Ajit Mittal who served nearly two decades at the central bank and is currently on the board of Indiabulls Housing Finance. Additionally, as per Registrar of Companies filings, NBFC Trillion Loans registered a profit of INR 74 Lakhs in FY22, with revenue totaling INR 7 Cr.

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The move comes as a boon for BharatPe, which had been vying for an NBFC license for almost four years amidst its other endeavors. In 2019, the startup attempted to obtain the license, but the RBI declined the request. Nonetheless, BharatPe managed to circumvent this obstacle by acquiring a license for a small finance bank in June 2021, and subsequently forming a joint venture with Centrum Financial Services. This partnership led to the launch of Unity Small Finance Bank in November 2021.

After scaling down its involvement with the small finance bank, the fintech startup has reportedly shifted its focus towards maintaining its position as a "financial investor" in the joint venture. However, it has been a tumultuous ride for the company since then, with public battles with its former managing director Ashneer Grover and allegations of fund misappropriation gripping the company.

Amid a public dispute that has resulted in legal action and claims for damages on both sides, BharatPe, backed by investors including Sequoia Capital and Ribbit Capital, has filed a criminal complaint against Ashneer Grover and his family. The complaint, which includes allegations of criminal breach of trust, document fabrication, and embezzlement, was filed with the Economic Offences Wing (EoW) and comprises 17 charges. BharatPe's most recent valuation was $2.8 Bn.

Backed by marquee names including Sequoia Capital and Ribbit Capital among others, BharatPe was last valued at $2.8 Bn.

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