BSE-listed Niyogin Fintech on Monday said it will acquire 51 percent stake in iServeU Technology for Rs 59.2 crore ($8 million) in a cash-plus-stock deal.
iServeU is in the business of providing distributed banking facilities through its next-gen technology infrastructure to rural masses.
The acquisition is expected to be completed within 75 working days, Niyogin said in a regulatory filing.
Subject to receipt of requisite statutory and regulatory approvals, including approval of the shareholders of the company, the Board has approved issuance of equity shares for an amount not exceeding Rs 32.94 crore to the shareholders of iServeU Technology on preferential basis, it added.
“iServeU has seen rapid adoption of its platform and has been processing transactions worth about $500 million annually on its platform. The transactions and platform adoption have accelerated through the lockdown caused by the COVID-19 pandemic, as rural and local communities rapidly moved towards digital adoption,” a statement said.
The acquisition provides Niyogin with deep market access to under-banked India, it added.
Apart from market access for the firms, there are multiple product complementarities such as credit, digital wealth, and payments among others, which the two companies can jointly access to create a strong full-stack fintech value proposition for our customers, the statement said.
“They (iServeU) bring with them a unique platform, reach, and experience that will be of immense benefit to Niyogin. We continue to make strategic investments in effectively using technology to bring digital enablement to unserved.
“Niyogin’s capabilities combined with iServeU’s digital platform strengths will maximise impact to the underserved and unserved customers and allow us to expand the product stack and addressable market,” Niyogin Fintech Chairman and co-founder Amit Rajpal said.
Debiprasad Sarangi, Co-Founder and Chief Executive Officer of iServeU, said the capital infusion will be used to scale and accelerate growth with expanding footprint deeper into rural India and new product innovation.
Equirus Capital acted as the exclusive financial advisor to iServeU for this transaction.
Niyogin shares gained 1.87 percent to close at Rs 46.40 apiece on the BSE, as against a 2.13 percent correction on the benchmark index Sensex.