Following the Reserve Bank of India's decision to allow white-label ATMs to operate in the country, IADs in India are scrambling to secure financing to expand their operations.
Currently Chennai-based payment services firm Financial Systems and Software Ltd. is in talks with private equity firms to raise up to Rs.220 crore ($3.97 billion) by selling a minority stake, said an article at Live Mint. This would be the fourth round of funding for the company.
So far, FSS has installed about 6,000 ATMs in India; in a recent bidding round for 60,000 new installations for public sector banks, the company won a contract to set up and operate another 4,000 ATMs. The company will also take on $80 million in debt to meet its funding requirements, the Live Mint article said.
Meanwhile, Mumbai-based IAD, Accura Infotech Pvt. Ltd., is in talks with PE investors to raise Rs. 125-200 crore ($22.6–$36.2 million) by selling a minority stake.
Chennai-based IAD Prizm Payments Services Pvt. Ltd also is in talks with investors. And last week, AGS Transact Technologies Ltd., a Mumbai-based IAD, raised $40 million from PE investor Actis.
"With RBI opening doors to non-banking entities, the ATM business has to grow," Sunil Goyal, managing director and chief executive of Mumbai-based investment bank Ladderup Corporate Advisory Pvt. Ltd., told Live Mint. "Only regulatory changes, if any in future, can impact this. These are IPO-able businesses. We will see a lot of consolidation in this space as we move forward because size would matter."
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