Axis Bank, the country’s third-largest private sector lender, on Thursday entered into an agreement to acquire payments wallet Freecharge for Rs 385 crore in an all-cash deal. “The bank has today (on Thursday) entered into a share purchase agreement with Jasper Infotech Private Limited (‘Snapdeal’), to acquire 100 per cent equity capital of Accelyst Solutions and Freecharge Payment Technologies (Accelyst and FPTPL collectively referred to as ‘Freecharge’), subject to receipt of requisite regulatory approvals, including from the RBI, for a cash consideration of Rs 385 crore,” said Axis Bank in a filing to BSE.
Shikha Sharma, MD & CEO of Axis Bank said the deal is important for the bank from a strategic perspective.
According to the regulatory filings of Axis Bank, this acquisition will double the customer base of the bank and “leapfrog” its digital journey by multiple years. “The acquisition helps Axis Group augment our digital capabilities and execution capacity,” said the bank. Axis Bank’s chief financial officer Jairam Sridharan said the bank expects regulatory clearances to the deal in two months. Following this, the bank could consider merging their wallet businesses.
Currently, Freecharge has a revenue of about Rs 80 crore.
Snapdeal had bought Freecharge in April 2015 for an estimated $400 million or over Rs 2,500 crore at current rates. At that time, this was touted as the largest deal in the nascent start-up ecosystem in India.
Acquiring Freecharge’s business will give Axis Bank access to about 52 million mobile wallet holders of Freecharge as well as about 150 to 200 professionals.