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Business News/ Companies / News/  Centrum Group exits forex business, raises Rs1,200 crore
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Centrum Group exits forex business, raises Rs1,200 crore

Centrum Group sells Centrum Direct to Ebix for Rs1,200 crore, Centrum Direct's team and assets will be transferred to Ebix to become a part of EbixCash

Jaspal Bindra, executive chairman of Centrum Group. Photo: BloombergPremium
Jaspal Bindra, executive chairman of Centrum Group. Photo: Bloomberg

Mumbai: Centrum Group plans to explore inorganic growth opportunities and boost existing lending businesses with the capital raised through the sale of its money exchange business Centrum Direct to Ebix Inc., the group’s executive chairman Jaspal Bindra said.

Centrum on Tuesday announced the sale of Centrum Direct to Ebix, an American software and services company, for Rs1,200 crore. The entire team and assets of Centrum Direct will be transferred to Ebix to become a part of EbixCash, an end-to-end financial exchange, Centrum said in a press release.

Centrum Direct’s services include sale and purchase of foreign currency, overseas remittances, prepaid travel cards and travellers’ cheques. It has a nationwide reach through a network of 165 outlets in 55 cities and is the largest airport forex player with presence at 24 airports in India.

Last year in February, Centrum divested 18.5% stake in the forex business to a group of private equity (PE) investors Jacob Ballas, New York Life and Evolvence. “We want to keep a reasonable amount as a kitty, because there are some good inorganic opportunities in the market. We will now evaluate them with more seriousness," said Bindra.

In November, Centrum entered the microfinance business by acquiring FirstRand Bank’s Indian microfinance business. In an interaction with Mint last month, Bindra had said Centrum was looking to enter new business lines such as insurance and stressed assets.

The proceeds will also be used to fund the group’s growing lending businesses and pare debt at the parent company, he said.

“We obviously need some amount of capital for our lending businesses. Last year also when we had raised money from the PE funds, it was all invested in the lending businesses, but it was a small amount. So, now we will feed the lending businesses to the amount that they require," he said.

Centrum’s lending business spans across three categories—SME finance, microfinance and affordable housing finance.

Bindra added that the group was looking at multiple exit options for the Centrum Direct business. In January, VCCircle reported that Centrum had firmed up plans to take its forex business public.

“This one turned out to be the most certain and appealing, because we knew that their determination to acquire was strong," said Bindra.

The business now requires a lot of technology spend and requires a lot of complementary business and Ebix can provide those synergies, added Bindra.

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Updated: 04 Apr 2018, 06:41 AM IST
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