For the WL acquisition it may need to wait until they get RBI White Lable ATM approval. For what it's worth, here are some of my notes on who they may acquire. I have no extra info than what is in public and didn’t attend the last webinar or AGM. Would be interested in others thoughts.
The company expects to be granted WL licence approval following SAR submission to RBI in August. This will importantly allow old SBI ATMs to be refurbished and deployed to FindiPay outlets, but also enable the acquisition of the WL player that Nicholas has hinted at in his public comments. Based on the four existing players, the target would seem to be either Hitachi Moneyspot (10,000+ ATMs across 8,000+ franchisees) or Tata Communications Payment Solutions (5,000+ ATMs). Both are owned by large multinational conglomerates with a wide range of businesses and their investors would barely notice their Indian ATM arms being offloaded. I could find no reference to the Moneyspot business in Hitachi’s financial results. Tata’s payment solutions business is not profitable based on latest quarterly results, recording a loss of ₹34.54 crore (-$6.2 million) in FY23 with net liabilities of ₹145 million crore (-$26.5 million). The payment solutions business doesn’t get a mention in body of the annual report, with the notes mentioning steps are being taken to improve profitability and explaining an impairment.
A less likely option is India1 Payments (13,008 ATMs) as they are backed by ICICI and were pursuing an IPO seeking to raise ₹150 crore (~$27 million) for expansion last year that has been deferred indefinitely. They had NPAT of $4 million in FY24 and revenue of $118 million, with net assets of $43 million based on FY24 financial results.
I’ll rule out Vakrangee as they are listed on NSE with a market cap of $421 million, so simply too large and also have a presence across many countries.
So of the four businesses, TCPL would require a turnaround that should make them cheap to acquire, though Tata would need to take a hit on some of the liabilities before offloading, Hitachi is an unknown, and India1 Payments would be a great addition but difficult to see happening given limited cash on hand as per latest preso ($46.1 million at 1 April).
While acquisitions (and the price paid) will be of interest, due diligence and regulatory approvals can take longer than expected, and may not transpire this year, which would weigh on the share price.
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