Intellect Design Arena Ltd, the Chennai-based fintech company, plans to set up an Alternative Investment Fund (AIF) for ₹100 crore to further pursue its transition from a product company to a fintech platform-based company. The investment will be set up in Alternative Investment Fund-Category II.

As Intellect integrates and participates in the platform economy with marketplaces and ecosystems, there would be opportunities to collaborate with specific partners who would complement the company's technical and functional expertise and help expand the business. The AIF is meant to make minority investments in such partners to ensure alignment with Intellect's vision to become a leading fintech platform.

An AIF enables separation of risk along with a seamless process of financial accounts consolidation and related aspects while dealing with start-ups/ digital natives and hence preferred as a vehicle of investment.

The investments in the AIF may happen over the next 6-24 months according to the opportunities available, identified based on their suitability and the funds will be on a need basis. With the current business generating cash, the investments in AIF will not impact company operations, the company said in an announcement to the stock exchanges.

Also read: Intellect Design Arena, Resurs Bank ink pact for digital banking solution

A company official said, “The players specifically have not been identified yet. It will someone who will be a strategic fit or complement our offering.”

On why AIF, the official said it is to avoid complications of consolidation and control as most of these would be start-ups, he said.

Q2 net up

Meanwhile, for the second quarter ended September 30, the company reported a 34 per cent growth in net profit to ₹79 crore against ₹59 crore for the corresponding period last year. Revenue grew 22 per cent to ₹452 crore.

In the second quarter, the company recorded 9 digital-led wins. Intellect went live in 26 financial institutions with 10 new digital transformations across the world during this quarter, says a company release.

Arun Jain, Chairman and Managing Director, Intellect Design Arena Limited, said, “Intellect's technologies have driven calibrated and profitable growth over the last 8 quarters. As committed during the Intellect Technology day in March, we launched two platforms on cloud this quarter — iKredit360 and iGTB Cloud - CashPower ‘22. Both platforms have helped Intellect win 6 platform deals in this quarter. This is the beginning of Intellect's transition from a product company to a fintech platform.”