Profitability of BharatPe in 10 months, IPO in 2 years: Rajnish Kumar

Fintech company BharatPe is transitioning from an individual-centric company to a professionally managed entity with a new board, chairman Rajnish Kumar has said. The company is now focused on profitability over the next 6-10 months, said Kumar, who was previously chairman of State Bank of India, which led the bailout of private lender Yes Bank in 2020. Edited excerpts from a interview:

According to reports, BharatPe co-founder Bhavik Koladiya has quit over disagreements with the company. What led to its release?

Bhavik, along with Shashvat Nakrani, are the original founders. For the past five years, Bhavik has acted as a consultant to BharatPe. So, after helping to build the business, there is quite a large team that takes care of day-to-day operations. The business has matured. It is now a professionally run business. In a few days there will be an expanded council. BharatPe is transitioning from a sole proprietorship to a professionally run business. As far as guidance or advice is concerned, it will continue to be available. Bhavik’s five-year consultation period is coming to an end. In what shape or form the new contract was signed, which the company will decide, bearing in mind the individual’s own compulsions and desires; don’t read too much.

There have been talks that the company is in settlement talks with Ashneer. What is the status?

Ashneer is a shareholder. The rest of the matter is between the company and him.

Are you disappointed with what happened between BharatPe and Ashneer?

I still believe jo bhi hota hai theekh hi hota hai. If you look at the corporate perspective, there has been a complete shift when it comes to corporate governance. Now the predictions are clear that the company will be professionally run, fully compliant with regulations. As I mentioned, the company has reached a stage where it will no longer depend on a single individual. Any business that wants to grow beyond a certain point, must have its own strengths to survive without relying too much on one individual. Now it’s more about team and business strategy. To that extent, whatever happened, in terms of business performance, there is no impact. The focus is on how the business will become profitable. In the next 6-10 months, the business will become profitable.

What about IPO plans?

We are preparing for this. 18-24 months is the lead time we are looking at.

You sewed together the Yes Bank restructuring plan. Are you satisfied with the way the bank has transformed over the past 2 years?

From SBI’s perspective, the investment was made at 10:40 a.m. There was a great fear that taxpayers’ money would be wasted. Thus, all of these naysayers turned out to be wrong. In the sense that even regardless of the price today, SBI can easily earn a 50% return three years from now, which is a decent return. From an investment perspective, no cost to the business. (It’s also about) the national obligation to save a bank the size of Yes Bank. If SBI had not intervened, what would have happened to the depositors? What would have been the impact on the private sector? From that point of view, it was a satisfying opportunity.

Since the departure of the founder, in your opinion, what has changed at Yes Bank?

Yes Bank now has a professional board of directors. The first thing after the restructuring was the cash injection, the capital injection. But what is important is the bank’s governance philosophy. For the rest, they did not opt ​​for a change of direction. Again, this reinforces the point that if you have a board that is transparent, acts independently, and key executives, including the CEO and CEO, are allowed to operate freely, then things can be reversed. In the end, what has changed is the board of directors and the general manager and chief executive officer. The rest of the things are the same.

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