Ann: White Label ATM Licence Update, page-25

My initial internal price target has always been $4 after Piramal put their investment in at that valuation. Having said that some things have changed since then, Options came into the money adding some cash but dilluting the register, FND gave TSI management another 10% equity (pros and cons as it dilutes us but does align management further), White label license is as desrisked as it could be outside of official granting which appears imminent. I think we can justify $4 with all this but what can provide further upside is what is exciting:

Pros:
White label license margin expansion: ATMS able to be converted (not a high capital requirement to convert Smedley has stated) will provide cashflow quicker and with a stronger margin. Keep in mind we already have ~30% ebitda margins so this is going to really show some insane metrics for the business.

Logical consolidator: Our scale has us operating the cheapest of managed ATM services in India. This means acquisitions should be accretive as we in theory will improve their margins when coming into our business.

Ongoing tenders: Again as we are the cheapest and a significant player we are top dog for tenders. This has been proven with CBI and SBI contracts/renewals + Smedley stating so in presentations.

Economic tailwinds: The only true exposure to the indian economy which is surging in valuations. Piramal bought into Findi at a 170m valuation when the market cap was 40m from memory. P/E expansion can only be good for our valuation moving forward

Bombay Stock exchange listing: Adding onto the Indian economy, listing on the BSE will be a huge liquidity event for holders and we are on a 3 year timeline to get this done. If Piramal invested at 170m today what do they think the listing in 3 years time will be worth? They didn't do it to break even, we know that much. Keep in mind Smedley is an investment banker so we arent going to undersell ourselves when we IPO, and he was able to negotiate Piramal investing at a rate multiples above the FND market cap. I trust he knows how to get this done and he's as incentivised as anyone.

And the elephant in the room - Findipay: Nobody knows what this aspect of the business is valued at but safe to say if if were signing up merchants at the rate we are then management think it is worth exploring. What we dont know is how many users interact with this aspect of the business, our margin on this product and are daily/monthly active users being sustained. I feel like the current business valuation has nobody respecting Findipay.

Cons?:
Sunset industry? The only con i can attribute to Findi is the potential shifting of the Indian economy to digital. It is a big risk but it doesn't seem to be occuring in the near term. I spoke to a few friends who were born in India who stated cash is so entrenched that its not uncommon for half of house purchases to be paid in cash off the books.

If we can get a few years where cash circulation is held or grown then it think the shareprice could be $10 or so before we have to worry about growth stalling, and all holders will be rewarded even if in 10 years India is fully digital. This also begs the defence of does findipay come into its own in a digital world but to my understanding, findipay is assisting cash based users to purchase online, so a digital economy would not assist findipay.

All in all the pros to me heavily outweigh the cons. DYOR