Infibeam Avenues take 54prct Stake in Rediff

Gujarat-based fintech company Infibeam Avenues has announced its agreement to acquire a 54% stake in Rediff, one of India’s oldest internet firms. In a filing with the BSE on Friday, Infibeam disclosed that it invested around Rs 50 crore in Rediff, with the investment split equally between equity and debt. This investment will give Infibeam a majority shareholding of 54%.

The payments company aims to finalize the deal within the next 90 days. Through this acquisition, Infibeam intends to create a unified ecosystem encompassing payments, e-commerce, cloud services, and content consumption. Additionally, Infibeam plans to leverage RediffMoney, Rediff’s financial platform, to cross-sell credit, insurance, and investment products to its user base, which sees around 38 million monthly online visitors.

Rediff, founded in 1996 by Ajit Balakrishnan, offers a range of services including content, email, and enterprise solutions. The firm concluded FY24 with an annual turnover of Rs 36 crore.

Infibeam Avenues announced this acquisition alongside its June-quarter financial results. On a standalone basis, the company reported a net profit of Rs 36.4 crore, marking a 31% increase from Rs 27.7 crore in the previous year. The operational revenue remained relatively stable at Rs 682 crore compared to the previous year. The payments business generated gross revenue of Rs 643 crore, while the remaining revenue came from e-commerce operations.

The net revenue from the payments business, calculated after deducting payment processing charges, was Rs 118 crore, a 20% increase from Rs 98.8 crore a year earlier. The total payment value processed by Infibeam surged to Rs 19,679 crore from Rs 11,826 crore in the previous year.

Infibeam also reported an improvement in its take rate, which is the share it earns from each transaction it processes. The take rate increased to 11.2 basis points from around 8.4 basis points a year earlier, driven by better operational metrics. The company now has over 10 million merchants using its solutions and is adding more than 2,500 new merchants daily.

Following the acquisition announcement, Infibeam shares rose by 4.3%, closing at Rs 32.30 on the BSE. In contrast, the benchmark Sensex ended the day about 1.1% down.

Infibeam’s strategic move to acquire Rediff is seen as a significant step towards expanding its footprint in the digital ecosystem. By integrating Rediff’s services and platform, Infibeam aims to enhance its offerings and provide a comprehensive range of solutions to its users. This acquisition is expected to strengthen Infibeam’s position in the fintech and e-commerce sectors, allowing it to better compete in the rapidly evolving digital landscape.

The acquisition will enable Infibeam to tap into Rediff’s established user base and technological infrastructure, facilitating the creation of a robust platform that caters to various aspects of digital transactions and services. The cross-selling of financial products through RediffMoney is anticipated to open new revenue streams for Infibeam, further boosting its growth prospects.

As Infibeam continues to expand its merchant base and improve its operational efficiency, the acquisition and of Rediff is poised to play a crucial role in the company’s long-term strategy. The combined strengths of both companies are expected to create synergies that will drive innovation and enhance customer experiences across their platforms.

In summary, Infibeam Avenues’ acquisition of a 54% stake in Rediff.com now represents a strategic move to create a comprehensive digital ecosystem encompassing payments, e-commerce, cloud services, and content consumption. With this acquisition, Infibeam aims to leverage Rediff’s established platform and user base to cross-sell financial products and drive growth in the fintech and e-commerce sectors.

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