Digipay Company Findi awarded 10-year contract to put up SBI ATMs

Findi Limited (ASX: FND), a digital payments and financial services company, reports the expansion of its merchant network business and service offerings in India. All these outlets will have Findi’s digital payments platform for outlet customers to complete a transaction, money transfer or process household bills and domestic invoices. 

This comes in the wake of multiple good developments for the company as in late October 2023 it got a renewal of its existing contract of building white ATMs for the country’s largest public sector bank, State Bank of India (SBI). It also got a new contract of 10 years post-extension. 

On 15th November Findi’s subsidiary in India, Transaction Solutions International (TSI India) raised $37.6 million from an investment ahead of its public (Initial Public Offering) IPO listing at Bombay Stock Exchange (BSE). Here is a breakdown of the entire development of Findi in recent months.

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TSI India raises $37.6M ahead of IPO listing

As per a company announcement letter from Findi, its Indian subsidiary TSI India was able to attain $37.6M in investments in the form of Compulsory Convertible Debentures (CCD) from Piramal Alternatives which will be convertible to equity in the wake of its IPO listing in India’s BSE. This funding infusion will act as a catalyst for the growth of FINDIs merchant expansion network, improvement of its Findi Pay digital payments platform and enhancement of its business opportunities. The Entry Equity Valuation of the company as per the ETIDA (Earnings before interest, taxes, depreciation, and amortization) principle places the valuation of the company at $!53.0 M pre-IPO, post that the valuation will be $190.6 billion after listing.

In an interview with Paul Sanger for the Finance News Network, FINDI’s CEO Nicholas Smedley states, “It sets us to a wonderful trajectory of both organic and inorganic growth in India of the company through our digital payments infrastructure and ATMs. Piramal Adventures ran a 6 month investigative check on us, before offering us CCD worth $37.6 million. It is one of India’s largest investment houses which has $10 billion in net value assets. It has managed $1.5 billion in assets. And it has been backed by CPDQ which is a large Canadian Pension Fund which has $440 billion assets in management.”

He also states, “This will make Piramal have a 16.9% equity holding with TSI. Another good news is, we have renewed our contract with SBI along with 10 year extension for putting up ATMs for them. Another area of interest will be the merchant acquisition along with enlarging our digital payment business.”

Findi’s renewal of contract with SBI

As per a Market Herald report on November 3 2023, Findi’s shares saw a 10% jump post securing a renewal of the contract they had with SBI to assist in building white ATMs across the country of India. Findi expects a jump in revenue post this development from $27-$29 million extracting an earning for the company amounting to $9-$10 million. 

A Sentiment report echoes the same development and adds to the information that, a total of 4,219 ATMs need to be built across India as per the contract clause. Initially, the SBI tender only mentioned a contract for the construction of 3,375 ATMs in 10 years, but later more modifications were done and Findi was expected to build 844 ATMs in its very first year post start of the contract period which begins in 2024. 

Findi has a past relationship with SBI as it has secured third-party contracts from India’s apex bank since 2016 but it was set to expire in December 2023, and now that has been extended for a year along with the beginning of 10 years contract in 2024 after extension. 

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Expansion of Findi Pay and ATM business

As per a company announcement letter on 6th December 2023, Findi Pay is expected to acquire 25,000 merchant outlets by the end of the current financial year on 31st March 2024. As of November 2023, their current tally of acquisitions is at 18,062 outlets, growing by 90% from June 2023. There is almost an average of 2000 merchant acquisitions happening, a gross annual value of transactions of $192 million projecting a 25% growth in the future.

The current merchant outlet network adds another retail outlet of Findi Pay and enables customers to use digital payment services or Findi Pay services. Some states such as Madhya

Pradesh, Bihar, Delhi and Uttar Pradesh are leading in the tally for these acquisitions and also in future, these states will be targeted more for the expansion of Findi Pay’s merchant network. This reflects a very focused strategy of targeted acquisition in certain feasible demographics.

As of now, the merchant network exists extensively in the states of Madhya Pradesh, Punjab and Haryana.

Findi expects to build an ATM network which is currently on hold as it has a white license pending that you need to put up ATMs. Findi has also transformed its retail outlets into ATM setups and renamed the merchant shops under a brand called Findipay. These stores act as a centre of digital transactions enabling the Indian vision for a massive triumph for the country’s digital media campaign.

Findi will operate the newly put up SBI ATMs as Findi Pay ATMs as they received a renewal of contract with India’s apex public sector bank. This adds roughly 3000+ ATMs of the SBI to the network of Findi pay ATMs. This is completely separate from the deals they had regarding setting up new ATMs for the apex public sector bank in India.

With Findi flexing its wings, we also see the company using a revenue-sharing model with their merchant partners in areas of banking including credit card payments, and banking services of both conventional and Aadhar-enhanced transactions. It has an option of payment for other services like recharge, and bill payments including recharge, electricity and Life Insurance Corporation (LIC) payments etc, it also has a cash drop facility at merchant locations. 

The board and the management of Findi are keen to expand their footprint and expand their GTV and ATM network in the world's most populous developing country.

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Conclusion

Findi has done extremely well in India, its Indian subsidiary TSI has secured a CCD from Piramal Alternatives which will later turn into equity as soon as the company goes for IPO listing. With more monetary infusion the company expects a vast expansion of their merchant network. and also focusing on the growth of its payment services. On top of that they even got a 10-year contract to put up SBI white ATMs and an added extension to their existing contract for a year. All these developments suggest Findi is enriching the goals of digital India and empowering the movement.