Tata Communications is set to divest its entire 100% stake to Transaction Solutions International (India) (TSI), a company majority-owned by Australia’s digital payments and financial services provider, Findi. The deal, valued at Rs 330 crore, also includes an additional amount linked to interchange rate adjustments outlined in the Share Purchase Agreement (SPA), potentially amounting to Rs 75 crore. This transaction is subject to customary adjustments as stipulated in the SPA.
The completion of the deal is contingent on regulatory approvals, including clearance from the Reserve Bank of India (RBI), and the fulfillment of other conditions outlined in the SPA. Tata Communications confirmed these requirements in its exchange filing.
This acquisition is aligned with TSI’s strategic initiative to expand its footprint in the Indian market by providing a comprehensive range of financial services, catering specifically to the underbanked population.
Deepak Verma, MD and CEO, TSI said, “The acquisition of TCPSL bolsters our commitment to driving financial empowerment to the underserved. TCPSL’s existing and upcoming ATMs significantly improve our penetration, especially in rural areas. The addition of payment switch capability enhances our service delivery, enabling us to deliver cash and related financial services seamlessly. We foresee strong synergies between white label ATMs and our existing FindiPay merchant network, empowering our merchants to expand their services and better serve underbanked communities.”
TSI operates a brown label ATM business, has partnered with 12 public and private sector banks (including State Bank of India, Central Bank of India, Punjab National Bank and HDFC Bank). It also has experience of managing backend operations for more than 10,000 white label ATMs over the last eight years. It also enables payment services through its network of 40,000 merchants via the brand FindiPay (started in 2018).
TCPSL has been a part of Tata Communications’ broader portfolio. In 2013, TCPSL unveiled Indicash, India’s first-ever network of white label ATMs, in line with the RBI’s vision to accelerate growth and increase ATM penetration across the country.
Kabir Ahmed Shakir, CFO, Tata Communications, said: “The payments solutions sector, a non-core business, operates under different dynamics compared with our traditional or primary offerings. This strategic step will allow us to double down on our core areas of expertise that align with our long-term objectives, while unlocking value and improving profitability. In TSI, we are confident that we have found the right partner to take this business to new heights.” Both companies are confident that this decision will contribute positively to their long-term financial goals, leading to enhanced shareholder value and continued growth; and are committed to ensuring a smooth transition for employees, customers, and partners.
Today, TCPSL owns and manages one of the largest networks of white label ATMs in the country. In addition to delivering over 4,600 operating Indicash ATMs to TSI’s existing network of 7,500 brown label ATMs in India, this proposed acquisition by TSI will provide it with a white label ATM platform with a WLA license, payments switch, and an additional 3,000 ATMs to be deployed. It will also enable TSI to deploy white label ATMs into its FindiPay merchant outlets, driving product and service innovation across the FindiPay business and delivering market-leading customer experiences.
Source: Economic Times