Temasek 'eyeing' online payments firm

Along with a co-investor, it is reportedly in talks to acquire a stake in BillDesk of India

Temasek Holdings and a co-investor are reportedly in talks to acquire a significant minority stake in BillDesk, an online payments firm in India.

United States-based private equity major General Atlantic would have the majority stake in the investment, valued at about 10 billion rupees (S$215 million), Indian media reports said.

Temasek would contribute up to a quarter of the total investment, the reports said.

General Atlantic and Temasek Holdings did not comment on the the Indian media news report.

This is the fourth round of funding for BillDesk, which provides online bill payment services to banks and billing companies in India, since its founding in year 2000.

Three other investment rounds since 2001 saw stakes by big names such as Bank of Baroda, State Bank of India and US-based private equity firm TA Associates.

BillDesk has first-mover advantage in India's online bill payment market, but competition is stiffer with the advent of other players like Payt m, PayUmoney, and Citrus Payment Solutions among others.

Paytm has raised US$635 million (S$892 million) through deep- pocket investors such as China's Alibaba Group Holding, while others such as ZipCash Card Services and Razorpay Software have all raised funds from private equities and venture capitals.

Analysts said that BillDesk has nearly 70 per cent of the market under its belt owing to its first-mover advantage.

Its clients include leading banks like State Bank of India, Citibank India, HDFC Bank, ICICI Bank, and big telecom firms such as Reliance Communications, Vodafone India, Bharti Airtel and Tata Teleservices.

"With the expected growth in electronic payments and government's thrust on it to avoid cash transactions, the opportunities in this sector are immense," said Mr Sanjeev Krishan, leader (transaction services and private equity) at PwC India.

The online bill payment market in India is likely to grow at an annual rate of 50 per cent in what is expected to be a 300-billion-rupee market by 2020.

If successful, the BillDesk deal will be General Atlantic's second investment in the financial services sector in India this year. It has already acquired a 21.61 per cent stake in IIFL Wealth Management, a unit of IIFL Holdings, for 11.22 billion rupees.

As of March, Temasek had investments worth US$190 billion in India, according to Indian media.

A version of this article appeared in the print edition of The Straits Times on October 31, 2015, with the headline 'Temasek 'eyeing' online payments firm'. Print Edition | Subscribe