MUMBAI:Bharat Petroleum Corporation (BPCL) has invested Rs 251 crore in Mumbai-based payments company Fino PayTech to pick up 21% stake through an all cash deal. With this deal, Fino which had been awarded the Payments Bank licence is within striking distance of reducing its foreign shareholding to less than 50% as mandated by the Reserve Bank of India.
“BPCL intends to leverage the distribution network of Fino coupled with the ultimate launch of the Payments Bank that offers an excellent platform for providing customised payment offerings to its customers to drive its fuel and non-fuel business,” said BPCL in a note to the Bombay Stock Exchange on Friday.
Petroleum retailing company BPCL which has a huge customer base who uses its petrol pumps and LPG services intends to utilize this partnership with Fino for a complete payments solution which could help it increase customer loyalty and also make payments simpler.
“We believe more than 1 crore people use BPCL petrol pumps, around 4 crore people get LPG subsidy, BPCL will use our payments solutions to offer easy payments options to its customers and through loyalty programmes in association with us can increase customer stickiness,” said Rishi Gupta, CEO, FinoPayTech.
Further Gupta added that with the fresh funds the company was planning to invest more in technology and developing the payments infrastructure to be able to support the customer needs of a public sector giant like BPCL.
Fino PayTech which was incubated by ICICI Bank as a payments technology company way back in 2006 counts BlackStone, Intel Capital, ICICI, International Finance Corporation among its investors. However, in order to be able to start its banking activities, it needed to reduce its foreign shareholding to less than 50% from more than 70% as per instructions from the RBI.
“We are already in talks with few other investors to reduce the foreign shareholding further by another 5 to 10% to meet regulatory norms which should enable us to start our Payments Bank business within the next 6 months,” said Gupta.
Fino manages around 400 retail points for remittances and bill payments across the country and has around 8000 agents doing enrolments under Jan Dhan Yojana. The company handles around Rs 7000 to 8000 crore in cash annually.
Profitable since 2010, for the year 2014-15 Fino reported a gross revenue of Rs 219 crore and the net profit of Rs 10 crore. The latest round of investment puts the valuation of the company at almost Rs 1000 crore.
Recent Articles on M&A
Source: Economic Times
