As India’s digital payments ecosystem grows, financial tech companies like Findi Limited (ASX: FND) are getting to make the most of the boom. In fact, the Company has received notice from the State Bank of India stating that its supply of 3912 ATMs into several states in India has been extended to 31 December 2023 or until a new contract tender is awarded with new machines deployed.
In doing so, the Company is attempting to establish a strong foothold in the rural regions of the country, thus aiding accessibility. Initially, the contract was supposed to end by December 2022 with a tender process to run for the replacement of the ATMs. SBI has elected to extend the existing contract for a further 12 months.
Findi had not factored SBI’s contract extension into its revenue guidance in August and has a positive outlook following this news. The Company’s revenue and EBITDA guidance (reported to ASX in its announcement on 16 August 2022) assumed that the contract with SBI would end this year on December 31, 2022. As a result of the 12-month contract extension, Findi expects to generate an additional $8 to 10 million in revenue per quarter as long as the SBI contract remains operational.
Findi’s Non-Executive Chairman, Nicholas Smedley, shared, “While we remain of the view that we are very well positioned to retain the SBI contract long term, it is an added bonus that we will retain the contract in its current form for a further 12 months. On the back of our recently announced capital raising, it places the business in a very strong financial position moving forward.”
Recently, the Company raised $2.8 million in a placement of new shares, and it has its eyes set on growth in India.Major shareholders of Findi committed $2.25 million while the Board of Directors contributed a combined $550,000.
The SBI contract, originally established in 2012, sees Findi responsible for the supply, installation and maintenance of ATMs which are located across the states of Odisha and Chhattisgarh, Rajasthan, Karnataka and Goa, Gujarat and the union territory of Daman, Diu, Dadra and Nagar Haveli.
Rest assured, Findi is going full steam ahead with its Indian growth plan. Besides the SBI contract, the Company has also secured a five-year agreement with the Central Bank of
India, which is expected to bump its revenue up 6 to 13% year on year increase, amounting to $47 to 50 million and a 100% year on year increase in EBITDA of A$13-14m (100%+ year on year increase).
In FY21, India recorded over 40 billion digital transactions amounting to over a quadrillion rupees. No doubt, this market offers great potential for Findi and with contracts like the ones with financial giants SBI and the CBI, it might be right to expect a profitable year. Since the announcement, the Company appears to have removed its August 2022 revenue guidance, possibly in preparation for a new and SBI-adjusted one.
Alinda is a Business Reporter for The Sentiment
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