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From the recent most notification in Stock exchanges, Axis Bank Limited asserted about their share purchase agreement with Jasper Infotech Private Limited who is the owner of Snapdeal as according to the aforementioned deal Axis Bank will obtain 100 percent integrity financing of Freecharge in return of a cash perk of Rs 385 crores.
“The bank has today (on Thursday) entered into a share purchase agreement with Jasper Infotech Private Limited (‘Snapdeal’), to acquire 100 per cent equity capital of Accelyst Solutions and Freecharge Payment Technologies (Accelyst and FPTPL collectively referred to as ‘Freecharge’), subject to receipt of requisite regulatory approvals, including from the RBI, for a cash consideration of Rs 385 crore,” said Axis Bank in a classifying to BSE.
According to the people acquainted with the development said that the deal was clinched for around Rs. 350 – 400 crores.
“The acquisition of FreeCharge re-affirms Axis Bank’s determination to lead the journey of digitization of financial services. We expect FreeCharge to contribute significantly in our aspiration to serve the digital native and mobile-first young consumers of India,” conveyed Shikha Sharma, MD & CEO of Axis Bank.
One of the prominent Delhi-based firms Snapdeal had procured Freecharge in 2015 cracking deal appraised around $400 million or about Rs 2500 crores. Strikingly that was the most publicized and hefty deal for the incipient endowment eco-system in India.
From the latest press release, it has been also revealed that Flipkart, the rival of Snapdeal has been engrossed in a consultation about acquiring their e-commerce business for the past couple of months.
Talking about Freecharge, it is a digital payments company which spanned all over India recording more than 50 million wallet users and over 200,000 traders. It is primarily exploited to make payments and maintain transactions for DTH, Telecom and broadband recharge for efficacy payments like electricity and gas and water expenses.
From some media reports, it has been revealed that online grandstander Amazon had been in a negotiation to obtain the digital wallet service provider. With that, the adversary Paytm retained by One97 Communications tended to have the digital wallet but they were capable of clutching the digital payment wallet themselves. Amongst all the contenders this slick private sector lender made their path dealing the harsh battle.
Axis Bank will provide ingress for digital wallet holders of Freecharge counted more than 50 million people and approximately 150-200 professionals as well.
Nowadays, there has been a formidable surge in the custom of digital payment methods and wallet payments also notably after the demonetization implementation.
The lender said that they anticipate for more sophisticated days ahead as the equity belongings have culminated already. Previously, Axis Bank reported that on depreciation of each year by 16 percent the net profitability in June 2017 fixated at Rs 1306 crore.
Kunal Shah’s (Founder of Freecharge) Statement about the deal portrays, (Source: Facebook)
27 months ago, team at FreeCharge was neck to neck with top player and had the choice of going solo with 95M dollars we had in bank or merge with a larger company to have step function growth. We chose to merge.
Most internet exits in India have been due to running out of money or common investors wanting to cut losses and merge their portfolio companies, but we had none of that situation and we chose this path to become bigger. This choice allowed us to create wealth for every team member that no internet company has ever achieved in India.
The choice we made didn’t work out as planned for several reasons but super proud of what we achieved as a team and product. We grew 3x on almost all metrics post exit with low capital at hand. Happy about the news and wish FreeCharge a great success with Axis Bank.
Some of the annotators did mention that no other payment businesses gave appraisal Freecharge as Axis Bank appeared to serve. It happened under some terms and conditions, as like the Axis Bank is the only one who endorsed Freecharge to persist as an autonomous brand and there might be some suit between their line-up. Recent most inspection about the matter reveals that for the past few weeks, Paytm, Paypal and Mobikwik have been enunciated as the abeyant suitors for Freecharge.
As Axis Bank already has its own mobile wallet, the corporation onlookers are inquisitive to witness how they incorporate Freecharge. The spectators also added that the transaction would yield it the imperative cash and thereby be giving it a respite for some months.
Overall in long- terms, Freecharge will be transformed radically by the fluke of Snapdeal that has seen a plunge in its figure.