TSI India to acquire Tata Communications’ payment unit for Rs330 cr

New Delhi: Tata Communications has entered into a share purchase agreement with Transaction Solutions International India (TSI India) for sale of its entire stake in wholly owned subsidiary Tata Communications Payment Solutions, in a deal worth over Rs 330 crore. Tata Communications Payment Solutions (TCPSL) is a company incorporated in India and registered as a White Label ATM Operator with the Reserve Bank of India (RBI). The proposed transaction is subject to completion of the conditions stipulated under the share purchase agreement (SPA), including regulatory and other nods from the RBI and any other authority as may be necessary, according to a BSE filing. The transaction is expected to be completed by the end of the fourth quarter of FY25.

As per a release accompanying the filing, Transaction Solutions International India(TSI) -- a majority-owned subsidiary of Australian digital payments and financial services provider Findi -- announced that it has entered into a share purchase agreement to acquire 100 per cent stake in TCPSL, a wholly owned subsidiary of Tata Communications. "The deal has been signed for a total amount comprising of Rs 330 crore (AUD 59.1 million), an additional amount reflecting the interchange rate adjustment specified in the SPA, which is estimated to be up to Rs 75 crore (AUD 13.4 million) and is subject to customary adjustments as specified in the SPA," the release said.

The deal is in line with TSI's strategic growth plan to deliver the full suite of financial service solutions to India's underbanked and accelerate its own transformation into a full-fledged payments bank. Launched in 2005, TSI operates a brown-label ATM business, partnering with 12 public and private sector banks (including State Bank of India, Central Bank of India, Punjab National Bank, and HDFC Bank), and has experience of managing backend perations for 10,000-plus white label ATMs (WLA) over the last eight years. It also enables payment services through its network of over 40,000 merchants via the brand FindiPay (started in 2018). TCPSL -- established in 2008 -- has been a part of Tata Communications' broader portfolio.

In 2013, TCPSL unveiled Indicash, India's first-ever network of white label ATMs. Today, TCPSL owns and manages one of the largest networks of white-label ATMs in the country. In addition to delivering over 4,600 operating Indicash ATMs to TSI's existing network of 7,500 plus brown label ATMs in India, this proposed acquisition by TSI will provide it with a white label ATM platform with a WLA licence, payments switch, and an additional 3,000 ATMs to be deployed -- providing it with additional scale. It will also enable TSI to deploy white label ATMs into its FindiPay merchant outlets, driving product and service innovation across the FindiPay business and delivering market-leading customer experiences.

TSI MD and CEO Deepak Verma said, "TCPSL's existing and upcoming ATMs significantly improve our penetration, especially in rural areas. The addition of payment switch capability enhances our service delivery, enabling us to deliver cash and related financial services seamlessly." Verma added, "We foresee strong synergies between white label ATMs and our existing FindiPay merchant network, empowering our merchants to expand their services and better serve underbanked communities.”

As Tata Communications continues to invest in high-growth areas, this "thoughtfully planned proposed divestment" by Tata Communications aligns with its long-term vision to focus on its core strengths, the release said. "The payments solutions sector, a non-core business, operates under different dynamics compared with our traditional or primary offerings. This strategic step will allow us to double down on our core areas of expertise that align with our long-term objectives, while unlocking value and improving profitability," Tata Communications CFO Kabir Ahmed Shakir said.