Money & Banking

EbixCash expects forex business to reach pre-Covid level in 6–9 months

Surabhi | | Updated on: May 23, 2022

No plans to delay the IPO despite market volatility. It will take care of working capital, growth needs

IPO-bound EbixCash is upbeat about business prospects with the ebbing of the Covid-19 pandemic and believes that its remittance business will return to pre-Covid level in the next 6-9 months.

“Our forex business had completely shrunk during the pandemic. We believe we can be back to pre-Covid level in the next six to nine months, “said Robin Raina, Chairman and Non-Executive Director, EbixCash, while noting that business has picked up as people have gone back to travelling.

He also expects the remittance business to pick up as countries open up and resume economic activities.

“The remittance business shrunk by about 10 to 20 per cent, mainly because of the labour market, which hasn’t picked up. We believe it will start to pick up as countries like Qatar and Dubai open up, construction activities resume, and labour starts to earn money and remit it home, “Raina said in an interaction with BusinessLine.

EbixCash registered a profit of ₹230.05 crore in 2020–21, which was 5.5 per cent lower than the net profit of ₹243.34 in 2019–20. This was primarily due to the impact of the pandemic. Its revenue, however, increased 91.36 per cent in 2020–21 to ₹4,152.53 crore from ₹2,170.02 crore in the previous year, led by growth in its forex, remittances, and payments business segments.

The company has filed a draft red herring prospectus with SEBI in March to raise ₹6,000 crore through an initial public offering.

Despite the volatile market conditions, Raina said the company is not looking to delay the IPO and continues to wait for SEBI approval.

“We don’t have any plans to delay but we will wait for SEBI to approve the DRHP. Once it is approved, our intent is to go back to the market within the normal timelines. It has to be withing 30-45 days of SEBI approval,” he said, while declining to give an exact timeframe.

Raina said the funds raised would be used for working capital requirements of the company as well as to repay the parent company.

“The main reason for the IPO is to get funds for working capital. Our business is continuing to grow. Before Covid, we went on an acquisition spree and bought around 26 companies,” he said.

About ₹1,035 crore of the issue proceeds would be used to fund the working capital requirements of its subsidiaries- Ebix Travels and EbixCash World Money.

About ₹2,747.56 crore would be used to purchase outstanding compulsorily convertible debentures from Ebix Mauritius which were issued by certain subsidiaries and for the payment of interest on such outstanding compulsorily convertible debentures.

An unspecified amount would also be used for funding strategic acquisitions and investments.

Published on May 23, 2022
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