Axis Bank has today announced that it has acquired Snapdeal-owned online payments platform FreeCharge for ₹385 crore. Earlier, we reported that the Snapdeal board has approved Axis Bank’s offer.
As part of the agreement, about 200 employees of FreeCharge will move to the bank. The transaction is subject to regulatory approvals and is expected to conclude by the end of September.
For this acquisition, Axis Bank is paying ₹385 crore to acquire 100% stake in FreeCharge. This is a massive markdown in the company’s valuation, which was acquired by Snapdeal for ₹2,400 crore in 2015. At that time, it was the largest acquisition in the Indian startup sector.
The deal marks a closure to a 2-year long process during which Gurgaon-based Jasper Infotech was looking to raise fresh funding for FreeCharge to compete against the market leader Paytm.
In a filing to the stock market, Axis Bank confirmed that it is buying 100% equity in both Freecharge Payment Technologies and Accelyst Solutions Pvt Ltd.
Freecharge Payment Technologies operates semi-closed wallet license provided by RBI while Accelyst Solutions manages FreeCharge’s online services like online recharge, bill payment, coupon services and distribution of mutual funds and insurance products.
The filing further reveals that Accelyst had a provisional turnover of ₹42.2 crore for fiscal 2017 while Freecharge Payment Technologies had a provisional turnover of ₹25 crore for the same fiscal.
Axis Bank Chief Executive Officer Shikha Sharma said that the decision on either merging FreeCharge with its existing payment wallet or keeping it as a separate unit within the bank will be taken after discussions with the regulator.
The deal comes at a time when FreeCharge’s parent, Snapdeal, is moving closer towards a merger with bigger rival Flipkart in what is said would be a ₹6100 crore deal.