Chennai-based Financial Software & Systems (FSS) – which counts Azim Premji among its investors – is planning to raise INR1,000-1,200 crore through its initial public offer (IPO) over the next two years. The payments technology and transactions processing provider is growing at a fast clip and aims to double annual revenues over the next two years from the current level of INR600 crore. Funds raised through the IPO will be used to fuel its future growth which will be organic as well as inorganic.
Nagaraj V Mylandla, founder and managing director of the company has already set aside INR150 crore for acquisitions this year, primarily in South Africa, Zimbabwe and Kenya.
We will invest around INR150 crore in the acquisition in a company that has a strong presence in Africa and close the deal in the next 12 months.
Following the latest investment round, FSS is valued at INR2,200 crores. Investors including Wipro Chairman Azim Premji, Jacob Ballas Capital India Pvt Ltd and New Enterprise Associates hold nearly 40% equity stake in the company. The IPO will offer an exit opportunity to existing investors, though it is not decided whether in part or full.
FSS is a leading player in electronic payments. It offers its products, solutions and services across the entire payment eco-system, including ATM deployment and managed services, internet and mobile payment, micro banking and cash management system for debit, prepaid and smart cards. The company is already a major player in its space, employing nearly 1,700 workers. It has a client list in excess of 100 with State Bank of India accounting 15 per cent of the revenues.