Losses of fintech unicorn BharatPe tripled to ₹5,584 crore in FY22 due to a change in the fair value of the company’s compulsory convertible preference shares (CCPS) amounting to ₹4,782 crore. “This is not an operating loss but only a change in the fair value. Excluding this, operating loss was ₹811 crore in FY22, as compared to ₹277 crore in the previous financial year. This item is a one-off and shall not be there from next year as we have now reclassified the compulsory convertible preference shares from liability to equity,” said Nalin Negi, BharatPe’s CFO and interim CEO.

He added that when start-ups raise funds through compulsory convertible preferred shares, there are some milestones to be met or the money may be refundable. “So, the funding amount becomes a liability rather than an equity contribution to the business. In our case, it was something similar. All the funds that we had raised in the past till series E were considered as liability,” said Negi.

In the previous financial year, on August 3, 2021, BharatPe fair valued the liability and booked the increase in valuation to the extent of ₹4,782 crore into its profit and loss account. Later, on August 4, it converted the compulsory preference shares into equity and re-classified them from liability to equity.

The fintech company reported a 169 per cent growth in revenue to ₹321 crore, from ₹119 crore last year.“As a four-year-old start-up, BharatPe continues to invest in new businesses. Some of these businesses like PostPe (started in second half of FY22) and scaling up of Swipe business, which started a year earlier, are still in an investment phase and therefore impacted the short-term operating performance,” said a BharatPe spokesperson added.

BharatPe said it is facilitating ₹350 crore a month in disbursals on an average in the last fiscal, and today, its monthly disbursal is at around ₹1,200 crore across all the products. The company also said it has facilitated disbursals of around ₹4,500 crore in 2021-22 and is on track to do ₹15,000 crore across the merchant and consumer side this year and remain on track to be operationally positive in the next few months.