Infibeam Avenues Share Price Climb After Securing Stake in Rediff.com India

On Monday, Gujarat-based Infibeam Avenues announced its agreement to acquire a 54% stake in Rediff.com. The company has entered into a definitive agreement to purchase this stake in Rediff.com India for a cash consideration not exceeding ₹25 crore, with the transaction expected to conclude within 90 days. Reports indicate that the acquisition, funded internally, is valued at approximately ₹50 crore.

Following the announcement, Infibeam Avenues stock was quoted at ₹32.83 at 09:42 AM IST on the BSE, reflecting an increase of ₹0.53 or 1.64%.

This internally funded acquisition represents a significant milestone for Infibeam Avenues as it embarks on its journey as a consumer-facing digital financial service aggregator. The company plans to integrate its various digital payment services, platform business offerings, and AI solutions with Rediff.com’s services. This comprehensive digital environment aims to enhance user engagement and create new revenue streams.

Rediff.com boasts a substantial user base and data assets, ranking among the top 1000 global sites in terms of traffic, with over 55 million monthly visitors. This provides valuable insights into user behavior, preferences, and spending patterns. The user base offers fertile ground for cross-selling financial products using artificial intelligence, including loans, insurance, and investment products. RediffMONEY can leverage the platform to promote these services, thereby increasing product uptake and enhancing customer lifetime value.

Infibeam plans to diversify its portfolio by synergizing with Rediff.com's offerings, including enterprise email for merchants, consumer financial services, and content businesses. This strategy will open up new revenue streams for the company and expand its footprint in the digital economy, supported by its regulatory capabilities.

With extensive experience in operating digital payment gateway businesses through CCAvenue, Infibeam has strong in-house regulatory compliance capabilities. The company holds Reserve Bank of India (RBI) authorization to operate as a Payment Aggregator under the Payment Settlement Act, 2007, and a perpetual license from the RBI for its bill payment business, Bill Avenue, to operate as a Bharat Bill Payment Operation Unit (BBPOU) under the Bharat Bill Payment System (BBPS).

Internationally, Infibeam Avenues Saudi Arabia, a subsidiary of the company, became the first Indian fintech player to secure PTSP Certification from the Saudi Arabian Monetary Authority (SAMA), enabling it to operate as a Payment Processor (PTSP) in the Kingdom of Saudi Arabia (KSA).

By leveraging the inherent strengths of Rediff.com, along with its organic traction among news audiences and its dominance with over 5,000 corporate email clients, Infibeam plans to amplify its business growth across both domestic and international markets.

"This majority stake signifies a pivotal step towards enhancing the company’s products and services," reiterated Mehta, adding that the company expects to witness double-fold revenue growth in the coming quarters with its entry into the financial sector as an aggregator.

For the quarter ended June 2024 (Q1FY25), the company posted a net profit of ₹70 crore, up from ₹26 crore, with revenue increasing by 1.5% to ₹753 crore from ₹742 crore year-on-year. Earnings before interest, tax, depreciation, and amortization (EBITDA) rose by 42% to ₹68 crore from ₹48 crore, with the margin improving to 9% from 6.5% year-on-year.