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India1Payments Ltd., the country’s largest white label ATM operator, is looking to double the number of ATMs to close to 25,000 in the next four to five years by penetrating deeper into some of the existing and newer markets it has added. It currently has close to 12,500 ATMs operating largely in the southern and central part of India including Bihar, West Bengal and the Uttar Pradesh.
The company, which has been registering 30-35 per cent growth in turnover, ended 2022–23 with revenues of around ₹560 crore. It is hopeful of sustaining the growth rate on the back of the rollout of more ATMs, given the low penetration of machines in semi-urban and rural areas.
ATM penetration
According to K Srinivas, MD and CEO, India1Payments, the penetration of ATMs in the country is abysmally low as compared to not just the developed countries but also some of the developing countries. With close to 2,60,000 ATMs, India currently has only around one-fourth the number of ATMs in the US.
A major chunk of these ATMs are in Tier I and Tier II towns. Of these, close to 36,000 are operated by white label operators accounting for nearly 13-14 per cent of the total number of ATMs in the country. But when it comes to semi urban and rural areas, the share of white label ATMs is higher at around 25 per cent which means that one in four ATMs in semi urban and rural areas are contributed white label operators. Moreover, 80 per cent of the incremental deployments have actually come from WLA operators.
“We currently have close to about 12,500 ATMs across the country, and 90 per cent of our ATMs are in Tier III, IV, V, and VI cities. That is basically the semi-urban and rural areas. We consciously decided not to go to the big cities,” Srinivas told businessline.
Though the per capita income in urban markets is higher than that in rural areas, the density of ATMs in urban area is more than those in rural areas. So the average ticket size of withdrawal is not very different between urban and rural areas, he said explaining how it is profitable to deploy machines in these markets.
Need for more
“We believe that the country needs anywhere around 400,000 ATMs. We are currently still at about 260,000, and obviously a large part of this has to be in the semi urban and rural areas, especially in the Hindi belt and thenorth eastern and eastern States. We are committed to that,” he said.
India1Payments, which had planned to come up with an initial public offering, has put the plans on hold as the markets do not look too “favourable” at present.
“We are a private equity-funded company, and when we decided to go for the IPO at that time, it was predominantly to sort of give some partial exit to the shareholders. We were generating enough cash to roll out our own ATMs. So the IPO was planned to be basically a secondary sale. But then there was a bit of turbulence in the markets, and now we were not sort of desperate to go (for IPO) and the shareholders were quite happy with the way we’re going,” he said.
There is no specific time frame for the IPO as of now and the board and shareholders will discuss when and what would the right time, he added.
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