Payment business of
Great Indian (GI) Retail Group
Acquisition announced 27/10/2015
Date of closing expected: End of 2015/ Beginning of 2016
India, the world’s 4th largest economy has experienced rapidly increasing penetration of smartphones and Internet access, therefore there is a growing need for cost-effective domestic remittance and financial inclusion services and the advent of e-commerce offerings specifically targeting the Indian market.
CEO Markus Braun:
"Great Indian (GI) Retail Group has been at the forefront of India's dynamic and early-stage e-commerce and money remittance market for many years. Our investment into one of the region's leading payment groups secures us a strong position in one of the world's most rapidly growing electronic payment markets."
EUR 230 million (including a capital increase of GI Technology)
– paid in cash
Up to EUR 110 million – linked to financial performance in the years 2015 to 2017
Committed banking loans
Expected Contribution: (Pls. find below more financial information in detail)
Calendar Year (31.12.)*
- Revenues 2015E: EUR 45 million
- EBITDA 2015E: EUR 7 million
- Revenues 2016E: EUR >75 million (Growth +67% yoy)
- EBTIDA 2016E: EUR 15 to 18 million (Growth +114% to +157% yoy)
The fiscal year of the Company currently ends at the 31st of March and does not correspond to the calendar year.
- More than 900 emloyees in offices in Delhi, Chennai, Hyderabad, Bangalore, Mumbai, Kolkata, Lucknow, Manila, Batam and Kuala Lumpur
Rapid e-commerce growth of India – Growing from USD 17 billion at present India’s e-commerce industry iCAGR of 35%, to cross the USD 100 billion mark by 2020 (Assocham-Pricewaterhouse Coopers, 2015)
- Growth based on Early stage and strong developing e-commerce market
- Highly scalable business model
- Growth of electronic money remittance service
- Money remittance through Business Correspondents were growing at a CAGR of 120.5% from 2008 to 2013 (Ken Research 2015)
- Domestic money remittance through mobile wallets is expected to grow at a CAGR of 137% until 2018 (Ken Research 2015)
- Increasing usage of smartphones and internet access
- Stake in one of the world´s fastest growing e-commerce market
- Investment in global growing prepaid issuing business
- To apply for the PBL of India (Payments bank license) of Reserve Bank of India lifting the business from closed/ semi closed loop issuing to the next step to an open-loop-issuing license
- To further expand business into other Asian markets (besides current presence in India and Phillipines)
- Cross-selling opportunities of Wirecards technology/ products
The National Payments Corporation of India (NPCI) ranks GI Technology as number one bank’s remitter among 123 members, as of 06th October 2015.
licensed Prepaid Payment Instrument (PPI) Issuer (a brand of Great Indian (GI) Technology Pvt Ltd, a subsidiary of great Indian (GI) Retail Group PVT LTD)
- India´s number one domestic (Immediate Payment Service - IMPS) remittance instrument
- India´s leading semi-closed-loop payment instrument on IRCTC (one of largest e-commerce sites in Asia-Pacific)
- Accepted at more than 10,000 e-commerce sites in India (such as eBay, AirAsia, Bookmyshow and IRCTC (Indian Railways website))
- Serving over 200,000 people daily
- Rechargeable with cash on a mobile or over the Internet
- The SmartShop: Retail assisted e-commerce (a brand of Hermes, which is a a subsidiary of great Indian (GI) Retail Group PVT LTD)
- Agent network to solve India´s last-mile-problem in e-commerce
- Offers access to e-commerce to population without internet access
- Transfers cash into electronic money
- Agent assisted service delivery model (more than 100,000 agents in India and Philippines)
- Addressing rural and urban areas (limited access to internet and banking services)
Main products/services offered:
- Combination of innovative technology and agent-assisted service delivery
- Unique multi-channel platform to deliver a wide range of commerce offerings and financial services
- Virtual semi-closed-loop prepaid wallet to make one-time e-commerce transactions
- E-commerce offerings and financial services in rural and urban areas
- Money remittance
- 2006: Foundation
- 2006: Issuing of prepaid payment instruments
- 2009: Regulated by the Reserve Bank of India (RBI) as a Prepaid Payment Instrument issuer
- 2013: An update of the company’s Memorandum of Association happened in 2013 in accordance with changes in the regulatory environment reflected in the company’s act and with the company’s entrance into the remittance market
Comparable peers consist of companies such as PayTM, Oxigen, Suvidha or ITZCash. We would advise comparing the past financial performance, IMPS/NPCI ranking and agent network size of those companies when evaluating the market position of GIR’s payments activities.
Financials in detail:
The fiscal year of the company ends 31st of March and does not correspond to the calendar year.
Based on audited and consolidated financial statements the company grew at 141% in revenues from 1,109.2 mINR (15.8 mEUR) in FY13/14 (31/03) to 2,677.6 mINR (38.3 mEUR) in FY14/15 (31/03). EBITDA grew at 75% from 137.9 mINR (2.0 mEUR) in FY13/14 (31/03) to 241.4 mINR (3.4 mEUR) in FY14/15 (31/03).
The following projected figures correspond to the calendar year and develop as follows: For FY2015 (31/12) the company expects to grow revenues to more than 45 mEUR and EBITDA to more than 7 mEUR. For FY2016 (31/12) the company expects to grow revenues at more than 65% exceeding 75 mEUR and EBITDA at more than 100% to 15 to 18 mEUR (after integration cost).
The following table shows above figures:
Baker Tilly Roelfs