India1 Payments to expand white-label ATM network to 20,000 units in 3 yrs

ICICI Ventures-backed India1 Payments, a white-label automated teller machines (ATMs) player, plans to expand its network from the current 12,500 units to over 20,000 in the next three years.

It will incur a capital expenditure of Rs 120-150 crore per annum over next three years to expand the network and replace the current units in semi-urban and rural areas. 

K Srinivas, managing director and chief executive officer of India1 Payments, said the network expansion would be funded through internal sources. “The hike in the inter-change fees for ATM transactions in 2021 has improved our cash generation to spend on our own expansion and we do not need to take debt,” he said.

White-label ATMs are units run by a non-bank organisation and allow customers from any bank to withdraw money and receive other value-added services. The total ATMs in the country stood at 259,000 at the end of March. Of which 36,000 were white-label ATMs, according to Reserve Bank of India data. Other key players in the white-level ATM space include Hitachi Payment, Tata Communications Payment Solutions, and Vakrangee.

At present, white-label ATMs represent 15 per cent of all ATMs in India. In developed countries, this share is over 60 per cent. Srinivas said there was a huge scope for expanding the network to meet requirements of customers.

While it had filed a prospectus with Securities and Exchange Board of India for the proposed listing, there is no clarity when it will hit the market. The decision about timing for Initial Public Offering (IPO) rests with shareholders, company officials said.

The shareholders (promoter group and ICICI Ventures) have infused over Rs 450 crore since the company’s inception. ICICI Ventures acquired a 48.95 per cent shareholding in India1 Payments during FY14.