One of the biggest private sector banks in the country, Axis Bank has emerged to be a frontrunner in the race to acquire Freecharge. The mobile payments company, owned by Snapdeal is up for grab since a while now and has been negotiating with rival Paytm and Flipkart for a possible sale.
According to sources aware of the development, Axis Bank is conducting a due diligence on the payments company currently owned by Jaspers, the parent company of Snapdeal. According to the sources, the deal could be closed at somewhere around ₹200 – ₹250 Crores. Paytm had earlier quoted a figure of around ₹80 – ₹100 crores for Freecharge.
This figure shows the state of Freecharge and its parent company Snapdeal in the current scenario. Snapdeal had paid ₹2500 crores for Freecharge in 2015 and it was once described to be the crown jewel of Snapdeal by Kunal Bahl, CEO of Snapdeal. Snapdeal was once seeking funds for Freecharge at a valuation of around ₹6500 crores ($1 Billion) in late 2015.
These developments, however, could not be confirmed independently by The Indian Wire. We tried reaching out to the spokesperson of SnapDeal and Axis Bank, however, no response was received until the time of writing this post.
Over the last one year, change in fortunes of Snapdeal has affected Freecharge in a big way. Though the parent company is exploring options of selling its assets to keep itself alive till it closes a deal, the sale of its payment arm, for as low as ₹200 crores is not justified.
India is currently a lucrative market for the potential players in digital payment segment. The market of digital payments in India is expected to touch the mark of ₹30,00,000 Crores (₹30 lakh crores or $500 Billion) by 2020. Along with Axis Bank, Jaspers was also rumoured to be in talks with Yes Bank for the sale of FreeCharge, however, the development could not be confirmed.
We’ll keep you updated with the updates around this. Stay tuned!