Prosus buys India’s BillDesk for $4.7bn

Mergers & Acquisitions updates

Prosus, the funding arm of South Africa’s Naspers web group, has agreed to purchase India’s BillDesk for $4.7bn and merge it with its personal PayU funds enterprise, in one of many largest offers ever within the nation’s fast-growing digital funds sector.

The all-cash acquisition of BillDesk, India’s oldest cost gateway, will create one of many world’s largest on-line cost suppliers with $147bn in annual complete cost quantity, the businesses mentioned on Tuesday.

Amsterdam-listed Prosus has centered on India to develop a global web empire that features food delivery and categorized promoting, however it significantly anticipated the worldwide shift from money to on-line funds to supply a major a part of its future development.

BillDesk is “actually the very definition of an Indian success story . . . the mixture [with PayU] might be a number one digital funds firm regionally and globally,” mentioned Bob van Dijk, chief government of Naspers and Prosus. The acquisition is topic to regulatory approvals.

Amongst different Indian investments Prosus owns a stake in Swiggy, the nation’s largest meals supply firm, which raised $1.25bn from traders final month. The dimensions of the BillDesk acquisition compares to the $6bn that Naspers and Prosus have invested in India’s funds sector since 2005.

India “might be a major driver of our development within the subsequent decade as nicely . . . India stays our primary funding vacation spot,” van Dijk mentioned.

The variety of digital retail funds in India has elevated four-fifths since 2018-19 to 44bn in 2020-21, in keeping with the Reserve Financial institution of India. PayU’s share of those transactions will rise fourfold to 4bn by merging with BillDesk, the businesses mentioned.

Mumbai-based BillDesk, which was based in 2000, has an enormous share in billing and processing funds for presidency portals. It lately joined a bank-led consortium that’s bidding for the licence to determine a brand new retail payments infrastructure in India.

“This funding by Prosus validates the numerous alternative in India for digital funds that’s being propelled by innovation and the progressive regulatory framework put into place by the Reserve Financial institution of India,” mentioned M N Srinivasu, BillDesk’s co-founder.

Prosus is best known for its almost-29 per cent stake in Chinese language web group Tencent, which dominates the market worth of the corporate and its South African guardian, main their share costs to low cost their different investments. 

Naspers listed Prosus in 2019 to accommodate its worldwide investments and deal with the low cost, however the Tencent stake stays so outsized that Naspers dominates the Johannesburg inventory market, forcing traders to restrict their publicity.

Naspers and Prosus have step by step trimmed the Tencent stake over time to construct a multibillion-dollar battle chest for acquisitions. The businesses additionally accomplished a share swap this month to chop Naspers’ outright shareholding in Prosus, and subsequently cut back its native market weighting.

Prosus now owns 49 per cent of Naspers, and Naspers simply over 56 per cent of the funding automobile. Traders have balked on the complexity of the cross-shareholding construction.

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