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Premji Invest-backed FSS starts IPO process, to raise Rs1,000 crore

LiveMint logoLiveMint 05-07-2017 Swaraj Singh Dhanjal

Mumbai: Billionaire Azim Premji’s investment arm Premji Invest-backed Financial Software and Systems Pvt. Ltd has started working on an initial public offering that could see the company raise up to Rs1,000 crore, according to two people aware of the development.

Financial Software and Systems (FSS) powers the retail payments initiatives of banks, financial institutions, processors, merchants, governments and regulatory bodies across the globe.

The company’s end-to-end payments suite is used in retail delivery channels such as ATMs, points of sale (PoS), cards, mobile and internet.

Headquartered in Chennai, FSS has a presence in Africa, Australia, Canada, Europe, Middle East, Singapore and the US.

“The company has revived its plans to go public and it has started working on the draft IPO prospectus, which is expected to be filed by the next quarter. Investment banks Citi and ICICI Securities are working on the share sale. The IPO is expected to hit the market before the end of the financial year,” said one of the two people cited above, requesting anonymity as he is not authorized to speak to the media.

According to the second person cited above, the IPO will be a mix of both primary and secondary share sales. He too, requested anonymity.

“They are looking to raise up to Rs1,000 crore. A large part of the IPO is likely to be a secondary share sale by existing private equity investors of the company, some of whom have been around for a long time now,” he added.

Apart from Premji Invest, FSS counts New Enterprise Associates (NEA) and Jacob Ballas as investors. A spokesperson for FSS said the company has no comment to offer at the moment.

Citi and Premji Invest declined to comment. Emails sent on Tuesday to Jacob Ballas and ICICI Securities as well as NEA did not elicit any response.

In October 2014, FSS raised around Rs350 crore from Premji Invest. NEA and Jacob Ballas picked up stakes in the company in 2009.

FSS employs over 2,000 people and provides its spectrum of payment systems and services to over 100 clients worldwide, including some of the world’s largest public and private sector banks, financial institutions and also payment processors.

Several payment infrastructure firms, such as FSS, have shown interest in going public in recent times.

Earlier this week, Mint reported that Baring Private Equity Asia-owned cash management, cards and ATM network management services provider, CMS Info Systems Ltd, has started work on an initial public offering (IPO) that could see the company raise around Rs700-800 crore.

According to the company’s website, CMS manages 57,000 ATMs across the country, handles over 50% of ATM cash circulation and 48% of retail cash collections in the country.

The company operates over 150 vaults and over 4,000 cash vans.

AGS Transact Technologies Ltd, another ATM and cash management services company, filed for an IPO in 2015. The company is backed by private equity firms TPG Growth and Actis.

AGS provides cash management services to more than 24,000 ATMs through its subsidiary Securevalue India Ltd. However, AGS eventually did not go ahead with its IPO plans.

So far this year, 13 companies have raised over Rs11,700 crore through the IPO route.

In 2015 and 2016, 47 companies raised a total of Rs40,177 crore through IPOs, data from Prime Database shows.

More than two-thirds of these companies were backed by private equity firms.

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