Private equity firm Actis, today announced an investment of Rs 220 crore in AGS Transact Technologie (AGS), one of the leading ATM outsourcing and payments company.
The investment by Actis, that focuses on the emerging markets, will enable AGS to strengthen its position in the ATM outsourcing space; it follows the Rs 145 crore investment by TPG in June last year, and a follow-on investment of Rs45 crore in March this year.
The proceeds will fully fund the ATM outsourcing expansion undertaken by AGS on behalf of India’s leading banks and also support roll-outs under the recent PSU contract won by AGS for the HP, Haryana and Chandigarh circle.
Founded by entrepreneur Ravi Goyal in 1992, AGS manages a network of 10,000 ATM machines across India for banking clients, as well as supplying specialised equipment, and automated solutions for major retailers, petroleum and paint companies. AGS has installed in excess of 14,000 ATMs for over 70 banks in India.
“Actis’s injection of additional capital builds upon TPG’s investment in AGS in June 2011. With two large and leading private equity firms backing the company, we are confident we will continue to maintain our leadership position in the market and our strong relationships with our customers which include leading financial institutions such as Axis Bank, ICICI Bank, HDFC Bank and Yes Bank. In addition, we are excited about our new initiatives in the white labelling and the mobile payments space,” said Ravi Goyal, Founder of AGS.
The number of ATMs in India is forecast to increase from approximately 95,000 in 2012 to at least 200,000 in 2017. The recent white label guidelines unveiled by the Reserve Bank of India are expected to give a further fillip to ATM growth. Public sector banks, like the private banks before them, are now adopting a completely outsourced model for ATM expansion. Independent Service Organisations such as AGS are likely to play a major role in expanding this installed base.
Actis has significant experience in the payments processing sector, having built Emerging Markets Payments Holdings (EMPH) into a pan-continental payments processing business operating across 40 countries in Africa and the Middle East. Actis has invested approximately $1.2 billion in 16 companies in South Asia. Current investments include auto components manufacturer, Endurance; South Indian supermarket chain, Nilgiri’s, and hospital owner and operator Sterling Add-Life Emerging Markets Payments Holdings (‘EMPH’) was established by Actis in July 2010 to become a leading payments processor in West Asia and Africa.
Vish Narain, Country Head, India, TPG Growth: “In the one year since TPG invested, AGS has consolidated its leadership position in the ATM outsourcing space. We remain excited by its potential to dominate the ATM space but to also introduce new and innovative payment solutions for the Indian market.”
