The third-largest private sector lender of the country, Axis Bank, has appeared out as the likely victor to obtain FreeCharge. FreeCharge is the digital payments platform possessed by Snapdeal, the troubled e-commerce marketplace, as per 3 people having deep knowledge of the matter.
The digital payments platform has been looking for a purchaser for more than few months now, even as its parent bargains the policies for its own trade. Having its headquarters in Mumbai, Axis Bank is presently performing due diligence on FreeCharge, as per the same 3 sources mentioned above, who expect that a likely agreement might give a payout of almost $100 Million to money-starved Snapdeal. This, on the other hand, might not be separately verified by the media. Snapdeal and Axis Bank did not reply to emailed questions.
In May, the media had reported that a couple of private equity firms and 2 domestic banks had showed interest in Free-Charge, once defined as crown jewel of Snapdeal by Kunal Bahl, its Chief Executive. In 2015, FreeCharge was obtained by Jasper in a cash-and-stock agreement projected at $400–450 Million in what was at that time the biggest acquirement in the Indian business venture space.
A month ago, rival and market leader Paytm had made a non-exclusive term sheet deal while making a proposal of $10–15 Million for FreeCharge, as per 2 sources having deep knowledge of the matter. The surprise appearance of Axis Bank as a possible buyer reflects that Jasper Infotech, the parent company of Snapdeal, had been also hawking FreeCharge to others, sources claimed to the media.
Stocks of Axis Bank ended at Rs 503.30 at 1.25% last week. The trade of logistics unit Vulcan Express and FreeCharge might offer a much-needed break to balance sheet of Jasper. The tormented Gurgaon-based firm is independently negotiating the trade of Snapdeal to competitor Flipkart. At one point, Jasper was aiming an estimation of almost $1 Billion for Free-Charge, as it made efforts to lift cash for the unit. The turnaround in the Snapdeal’s fortunes had a radical impact on Free-Charge, which witnessed the value and volume of transactions fall stridently.
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