Fairfax Financial Holdings is reportedly in advanced talks with Infibeam, India’s only listed and profitable e-commerce company, to pick up a minority 10-12 per cent stake for around Rs 1,200-1,500 crore.
Following the development, the Infibeam rose 1.98 per cent to hit a high of Rs 1,466.60 on BSE.
The funding from Canada-based finance firm led by Prem Watsa, will reportedly be used by the e-commerce company to fund its expansion plans.
As per ET report, KPMG has helped with the valuation for the deal and investment bank CLSA Singapore has been advising Infibeam.
“Either the company will look to acquire a company or will help a global player with its India entry. In both cases it needs capital,” said a person involved in the discussions.
The proposed investment is expected to be at a marginal premium at about Rs 1,500 per share to the current market price of Rs 1,438. The market capitalisation of Infibeam stands at Rs 7,805.77 crore.
Founded by former Amazon employee Vishal Mehta in 2007, distributed e-commerce market platform provider, Infibeam reported growth of 396 per cent in FY17. It became the first Indian e-commerce company to file an IPO, in July 2015.
The company offers a SaaS platform to vendors through its BuildaBazaar offering, which generates revenue by charging a set-up cost to merchants, as well as through monthly fee and a per-transaction commission.
As per media report, Infibeam was in talks with Snapdeal for a potential acquisition, however the deal couldn’t materialised.
As per the report, CDPQ, Fidelity and Canada Pension Plan Investment Board (CPPIB) had also envisaged interest in the deal, however with its global reach and evergreen fund Fairfax has emerged a front runner.
“Consolidation has started happening a little too early in the sector as it was driven by investors. I believe there is room for multiple players in the Indian market unlike that in the West where one player dominates,” said Harminder Sahni, founder of Wazir Advisors.