Infibeam Avenues posts Rs 27 Cr profit in Q1FY24; to set up AI Hub in GIFT city

Payments infrastructure firm Infibeam Avenues on Tuesday posted a standalone net profit of Rs 27 crore for the quarter ended June 31, 2023—a 17% jump compared to the corresponding period a year ago. 

This was, however, 27% lower on a quarter-on-quarter basis. It reported a net profit of Rs 37 crore for the quarter ending March 2023. 

Operating income and expenses jumped almost 3X to Rs 697 crore and Rs 662 crore, respectively. 

On a consolidated basis, Infibeam reported a revenue of Rs 742 crore—about 77% higher year-on-year. Of this, Rs 686 crore was contributed by payments business and remaining from e-commerce platform business.

Meanwhile, consolidated profit was down by 34% at Rs 25.4 crore compared to the quarter prior. 

“The company has achieved historical milestones despite a seasonally weak first quarter. The gross revenue and adjusted EBITDA (operating profit) in the quarter has been the highest in the history of Infibeam. The operating profit and PAT have been adjusted to exclude the notional value of mark-to-market investment gain/loss for the accurate evaluation of the company’s operating performance,” a company statement read. 

Meanwhile, Infibeam also saw a substantial increase in merchant adoption of its digital payment platform. It claimed to have added 9,500 merchants on an average daily for the quarter, taking the total number of merchants across its online business to 10 million. 

The surge in demand for Infibeam's payment gateway solutions comes following RBI's diktat on its rival firms like Razorpay, Cashfree Payments, PayU, and Paytm, which have been ordered to pause onboarding new merchants since November last year.

Its mobile payment solution, CCAvenue TapPay, was downloaded by over three lakh merchants by the end of June 2023.

The total payment value (TPV) rose 26% to Rs 1.18 lakh crore from Rs 93,356 crore in the said quarter. Overall, the company processed transactions worth Rs 4.5 lakh crore in FY23. 

Infibeam, which recently got the licence to operate as a payment aggregator, is exploring plans to build buyers and sellers apps for small merchants and also for large companies and retailers to facilitate their integration with the ONDC (Open Network for Digital Commerce). 

The company said it is awaiting a retail payment network license.

AI Hub in Gift City  

Infibeam said it will soon establish AI Hub at GIFT City, with an initial focus on fintechs building AI solutions for fraud detection and authentication and risk identification (FAR) for the domestic and global market. The company will make strategic investments in the next three years in the project.  

Initially, the priority areas will be in the digital payments and financial space, where AI and ML algorithms detect fraudulent activities in online transactions, including credit cards, online banking, and ecommerce, on a real-time basis. 

In the long term, the in-house team will be developing customised fraud detection and prevention solutions for banking, financial services, insurance, FMCG, manufacturing, fintech, utility sector, government and government agencies.

“Under FAR initiative, setting up AI HUB is a bold and strategic move with a comprehensive plan to foster AI innovation, attract talent, and create a supportive ecosystem that will develop and offer frauds management solutions,” said Vishal Mehta, Managing Director, Infibeam Avenues. 

List subsidiary 

On Tuesday, the NSE-listed fintech firm’s shares closed at Rs 14.75, up 2.08%, following its announcement to list its digital marketing subsidiary—Odigma Consultancy Solutions—on Indian exchanges.

The wholly-owned subsidiary is into content, web development, social media management, email marketing, and search engine optimisation, among others. It posted a net profit CAGR of 13.4% and revenue CAGR of 11.43% in the last two years. 

“The rapidly expanding digital marketing industry is poised for exponential growth in the upcoming years, attributed to the widespread digitalisation of economies worldwide,” said Mathew Jose, CEO of Odigma Consultancy Solutions.

Increased stake in Fable Fintech

Infibeam said it increased its stake in Fable Fintech, a digital cross-border remittance solution provider, by an additional 25% (increasing its stake to 41%) for a total cash consideration of Rs 3.2 crore and an additional Rs 1.4 crore through Compulsorily Convertible Debentures (CCDs). 

The solution can be integrated into multiple payment systems and compliance networks, enabling companies, including banks, to launch their own cross-border transaction services. It posted a turnover of Rs 14.92 crore in FY23. 

As per the exchange filings, the company aims to increase cross-border ecommerce business transactions and make the remittance business cash free through fintech solutions. 

(The story was updated with a correction on revenue numbers)