Digital biz foray into US may prove a big positive for Infibeam Avenues stock: Analysts

Thomas Abraham K.S. Badri Narayanan Bengaluru/Chennai | Updated on February 19, 2020

Shares of Infibeam Avenues remained calm on Wednesday despite the company saying it is entering into the US market. Infibeam Avenues on Wednesday announced its move into the US market, which is counted as the world’s second-largest digital payments market by revenue. Shares of the company, after hitting a high of ₹57.55 intra-day, closed at ₹56.25, down 0.53 per cent, on the BSE, as analysts remained cautious on the stock.

Following two decades of operations in the domestic market, Infibeam had earlier forayed into West Asia — UAE and Saudi Arabia. In both these geographies, it operates under the CCAvenue brand for its digital payments gateway. Now, in the US too, the company will operate under its CCAvenue brand.

Speaking to BusinessLine on the expansion into the US market, Vishal Mehta, MD, Infibeam Avenues, said, “Currently, Infibeam offers a platform and digital payments in India, UAE and Saudi Arabia. We also had a few clients based in the US but we were not catering to them out of the US. So, to cater to them as well as to others in the trillion-dollar US market, we are now opening offices in the US to firm up our presence there.”

Mehta said Infibeam will be opening offices in New York and San Francisco and will be working with some of the largest banks in the US. Infibeam will target the vast number of hotels and motels in the US through its ResAvenue (platform services) and CCAvenue (digital payments) platforms.

Mehta said that in India, Infibeam’s platform caters to eight out of every 10 retail merchants for its digital payment solutions. “We process more than $10 billion in India alone annually in the digital payments space,” he said.

Silent on funds

Mehta did not say how much the company was committing to the expansion in the US. However, he said, “We will look at selective acquisitions and partnerships.” Mehta pointed out that the digital payments space is more advanced in India compared even to the US. “So, our product is world-class. We are the No. 2 player in the UAE and has opened a digital payments office in Saudi Arabia. We have tied up with Riyadh Bank,” he said.

Volatile stock

However, analysts say, the stock has been volatile over the last one-and-a-half years. Shares of Infibeam Avenues plunged over 70 per cent on a single day (September 28, 2018). The crash came a day ahead of the company’s scheduled annual general meeting, allegedly on rumours floating about the company’s corporate governance issue in WhatsApp. After hitting an all-time low of ₹32.15 (October 29, 2018), the shares have been on a recovery path.

According to marketmen, the inclusion of the stock in MSCI India Domestic Small Cap Index in November, triggered a positive breakout for the stock. Since then, it has almost doubled. The recent quarterly results (October-December 2019) were also better than expected, they added. After the result, the stock had hit a year-high of ₹61.25 (on January 28, 2020) and then remained in a range.

On the future outlook, Mehta said, “In the next three years, we expect the US will be as big a market as India in terms of processing ($10 billion) for Infibeam.”

Published on February 19, 2020

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