Airtel Payments Bank Looks To List On Bourses Soon

Bharti Airtel’s fintech arm Airtel Payments Bank is reportedly looking to list on the bourses in the coming future. 

“It (Airtel Payments Bank) is a profitable company, it’s doing well and growing rapidly. Further, that’s an option as per the RBI (Reserve Bank of India) licence that at some stage we are expected to list,” a top company official told The Economic Times.

Noting that the fintech unit was growing in healthy double digits, the top official further added that the company’s data centre business could also be monetised at a later stage.

Analysts told the publication that they expect the bank to generate annual revenues upwards of $1 Bn by 2030 largely on the back of a sharp rise in its monthly transacting user base and strong revenue generation potential for the payments bank in the B2B space.

Another major takeaway from the report was that the official said that the telecom operator was not looking at a premium pricing for its 5G services. The official further reiterated that Airtel was not in need of the 700 MHz band neither in the future nor for its next-generation services. 

Meanwhile, the telecom operator is also mulling a price hike in the next six weeks even as it waits for its competitors to take a call on the matter. As per the officials, the telco’s trials to hike base rates in two circles showed ‘better-than-expected results with lower-than-expected churn’, adding that the financial call will be taken by the top leadership. 

Airtel’s Fintech Tryst

This comes days after Airtel Payments Bank’s chief operating officer (COO) Ganesh Ananthnarayanan was quoted as saying that digital transactions would coexist with cash transactions for at least another five years. 

The fintech company commenced operations in January 2017 with an initial investment of $440 Mn to develop a pan-India digital payments ecosystem. Owned largely by Bharti Airtel (70% stake) and Bharti Enterprises.(30% stake), the fintech company has since scaled its operations to generate an annualised revenue of INR 1,000 Cr. 

The platform reportedly has around 5 Cr users on the platform and about INR 20,000 Cr in gross merchandise value (GMV). Leveraging Airtel’s huge user base and in-house capabilities, the fintech major has already turned profitable.

Airtel Payments Bank was one of the first 11 companies that received banking licences to operate payment banks including names such as Cholamandalam Distribution Services, Sun Pharmaceuticals, Tech Mahindra and Aditya Birla Idea Payments Bank .

All of these have either surrendered their licences or shut shop in the country. Of the 11, just six remain operational currently pointing to the somewhat dismal state of affairs in the payments bank space.

The domain has failed to scale up owing to a large number of issues including razor thin margins, intense competition and ‘long gestation period for payment banks to become profitable.’

Besides Airtel, just Fino Payments Bank has so far been able to weather the challenges and has also turned profitable. The company has also listed on the bourses. 

However, the space continues to see growing competition as it looks to expand its footprint to other parts of the country to grow its user base and pad its revenues. With fintech startups scaling up rapidly as formidable competitors, it remains to be seen how these digital payment banks perform in the face of new contenders.