Niyogin’s Strategic Shift in Fintech Business
The publicly listed fintech platform Niyogin has announced a significant strategic change following the approval of a composite scheme of arrangement and amalgamation. This scheme involves the separation of its Non-Banking Financial Company (NBFC) operations and iServeU (iSU), which will now function as separate listed entities.
Details of the Approved Scheme
As per Niyogin, the Board has given the green light to the proposal involving the composite scheme of arrangement and amalgamation between Niyogin Fintech Limited (NFL), Niyogin Finserv Limited (a newly established fully owned subsidiary), and iServeU (iSU), in which Niyogin holds a 51% stake.
Both the NBFC sector and iSU will now be independently listed. This decision demonstrates the firm’s commitment to establishing two distinct, nimble, and high-value entities that can independently leverage their strengths, seek growth avenues, and provide enhanced value for their stakeholders.
Insights from Company Founders
During a special earnings call, company founders Amit Rajpal and Gaurav Patankar expressed the importance of this strategic move and discussed the future direction of the company. Their active participation and profound understanding highlighted Niyogin’s dedication to transparency, sustainable growth, and value generation for its stakeholders, emphasising that this decision is crucial for the company’s future path.
Focus Areas Post-Restructuring
Post-restructuring, the newly formed subsidiary, Niyogin Finserv, will concentrate on expanding its NBFC operations by enhancing its lending portfolio through fintech collaborations. The company intends to use data-driven decision-making, low client acquisition costs, and greater accessibility for underserved communities to develop a high-margin, scalable lending operation.
Independent Operations of iServeU
On the other hand, iServeU will function autonomously, moving towards a SaaS-based business model. This strategy is designed to lessen reliance on revenue sharing with partners, thus enabling iServeU to grow steadily and systematically while fortifying existing relationships and investigating new product possibilities.
Recent Financial Performance
Niyogin’s Assets Under Management (AUM) have reached Rs 241.8 crore, marking a 2% increase quarter-on-quarter. The total income surged to Rs 113.2 crore in the third quarter of FY25, reflecting a substantial 110% year-on-year growth and a 55% increase quarter-on-quarter. Additionally, the company’s adjusted EBITDA (Ex-ESOP) loss was reported to be Rs 2 crore in Q3 FY25, compared to a loss of Rs 0.5 crore in Q2 FY25 and Rs 1.4 crore in Q3 FY24.