State Bank of India's digital startup, YONO, could be a $40 billion goldmine

State Bank of India’s (SBI) digital start-up YONO (You only need one) is being valued at US$40 billion and the bank is aiming to start it as a separate entity as a long-term plan. At present, the YONO platform has 2.76 crore users and has sourced Rs 20,000 crore personal loans and Rs 24,000 crore agriculture gold loans, with 50% leads for home loans and MSME loans being generated on the platform. Furthermore, it is adding 70,000 customers daily and providing loans worth Rs 70 crore per day.

Mr Rajnish Kumar, Chairman, SBI, said, “The companies which are making losses are valued at US$10–20 billion, YONO which is such a versatile platform has been making good amount of profits, using that benchmark YONO should be valued at $40 billion, but we haven’t commissioned any independent agency to value the platform.”

“Hiving YONO off as a subsidiary is a very good possibility but a couple of things have to be done, we should have APIs that could be given to other banks but first looking at the opportunities with our customer base we want to perfect that and then look outside,” said Mr Kumar.

Mr Siddharth Purohit, analyst, SMC Institutional Equities, said, “No doubt SBIs YONO platform is quite world class but it will not be value accretive as long as it is under the SBI roof, look at SBI cards it is one of the best valued NBFCs today. So, if tomorrow SBI decides to hive YONO off as a subsidiary the market will determine its value basis that.”

“The platform created by any bank such as SBI is very different from a pure play payment venture or an insurance aggregator, cause for a Bank this is just an enabler to a larger business,” said Ashvin Parekh, founder, Mr Ashvin Parekh Advisory Services. “

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.