Axis Bank Plans to Sell its 8% Stake in Mswipe

Axis Bank Ltd is eyeing to sell its 8 per cent stake in Mswipe Technologies Pvt. Ltd, a mobile payments services provider. As per the information received, the bank wants to sell its entire stake in the payments terminal company Mswipe and discussions are in progress. In fact, they are talking to some of the existing investors of the company, too, to pick the stake from them.

 

Axis bank is looking to sell its stake at a price that would value Mswipe at $200-250 million. The last time they raised funds, the company was valued at close to $150 million. The price which they are looking could get them up to $20 million for their stake.

 

The last fund-raising at Mswipe was during July 2015, when the company from new investors such as Falcon Edge Capital, Ola Cabs and Meru Capital raised Rs160 crore in a Series C round. Current investors Matrix Partners India, Axis Bank Ltd and DSG Consumer Partners also joined in the funding round. In the early 2013 Axis Bank first invested in the company.

 

Mswipe

• It was incorporated in the year 2012 by Manish Patel, a doctor by education, who earlier co-founded an alcoholic beverages distribution company called Milestone Merchandise.
• Mswipe supplies a mobile payment solution with a card reader, which can be fixed to any mobile phone’s audio (headset) jack. It also provides similar card payment solutions for smart phones.
• It functions with smaller banks namely Corporation Bank, RBL Bank Ltd, Shamrao Vithal Co-op. Bank and large banks including Axis Bank.
• Its presence is felt across the US, Middle East and South-East Asia through partnerships. Its clients involve various small and medium enterprises.
• In the payments services market, Mswipe competes with companies including Ezetap and Paynear.
• During August 2015, Ezetap raised Rs150 crore from Social+Capital, Helion Advisors and Berggruen Holdings, Horizons Ventures and the Capricorn Investment Group.
• In December 2015, Paynear raised around Rs. 16 cr from a high net-worth individual investor.
• As per March ’15 report by Ken Research, the payment services industry grew at a compound annual growth rate of 147.6 per cent between the fiscal years 2012 and 2014.
• The research firm is of the belief that the Indian payments market will continue to grow at a strong pace. The payments market is driven largely by transactions via mobile point of sale terminals and mobile banking.
• Axis Bank planning to sell its stake in Mswipe comes at a time when the bank is facing stress because of loans that soured.

 

Axis Bank’s Q2 glimpses

In the quarter ended September, the private sector bank disclosed a 83 per cent plunge in net profit at Rs. 319 cr, chiefly on the back of higher provisioning for bad loans. The bank had clocked a net profit of Rs. 1,915.64 cr in the corresponding period in 2015-16. Gross non-performing assets (NPA) and net NPAs at the bank increased to 4.17 per cent and 2.02 per cent, respectively in the quarter.

On 15th Nov, Axis Bank share price dipped 2.34 per cent. The stock is trading at Rs. 487.10.