Digital payments solutions player, Infibeam Avenues Limited (IAL), expects next big push for growth to come from its lending business. The company's express settlement business - short term working capital funding - is expected to cross $1 billion by the end of the fiscal, far higher than the earlier guidance of $200 million, informed a top official.

The company offers a fully-secured lending to merchants against consumers’ payments already received in the escrow account. “We started from zero in September 2020 and reached $100 million by March 2021. For fiscal 2022 we had given a guidance to reach $200 million. But already, we have reached $600 million so far and expect to cross $1 billion this fiscal. Lending business is the next platform for growth for the company for topline as well as for the bottomline,” said R Srikanth, Global President - Finance and Investor Relations - Infibeam Avenues.

In its ‘express settlement’ business, IAL settles merchants' funds instantly instead of T+2 or T+3 by charging a little extra. This benefits big ecommerce clients having large online transactions on a daily basis. A delay of two, three or seven days in getting the transaction cleared would block working capital for them. IAL came with an arrangement of instant settlement or lending, with almost nil cost of funds for the company as it uses its own funds for the arrangement.

The company sees this improving net take rates and margins. Express settlement constitutes 6-7 per cent of its daily payments Gross Transaction Value (GTV). It expects to scale it further to 30 per cent of GTV in next 2-3 years. “In addition to our payment processing vertical, we are going to focus, on giving lending services to our existing clients in terms of secured lending to start with,” he said.

Targetting $100 billion TPV

Srikanth further informed that this would play a major role in realising company's ambitions to reach $100 billion in transaction processing value (TPV) from the current annualised TPV run-rate of $40 billion. The share of digital payments is going up significantly as compared to the platforms business.

Also, opening up of leisure businesses, hospitality, restaurants and travel would further fuel the transactions and thereby the earnings for the company. “Last year we were doing ₹300 crore per day worth of TPV, today on consolidated basis, we are doing ₹800 crore per day worth of TPV,” said Srikanth. The company is currently working with about 3 million merchants, as it added about 6,00,000 merchants in last one year.

For the second quarter of the current fiscal, the company posted consolidated net revenues of ₹61 crore, up 10 per cent from ₹56 crore in the corresponding quarter last year. Consolidated net profit stood at ₹18 crore, up 53 per cent from ₹12 crore in the same quarter last year.

Infibeam Avenues shares ended in red at ₹ 45.30, down 0.55 per cent on BSE Friday.

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