What drives the flight of Infibeam? Find out!

India’s e-commerce story is a familiar one—cash burn, negative unit economics and a pipe dream called profitability, all in the name of customer acquisition. But Ahmedabad-based Infibeam Incorporation Ltd, the country’s first online retailer to go public, has scripted a growth story that flies in the face of the prodigal ways of other, heavily-funded e-commerce players.

It not only continues to be profitable quarter-on-quarter, but also believes that expanding margins, particularly from its business-to-business (B2B) enterprise platform, will help it sustain the growth momentum. However, if you thought the B2B strategy was all there was to the Infibeam story, you have another think coming. The company is treading a carefully-charted growth path, winning projects, striking new collaborations with government and private partners alike, and stitching value-accretive deals.

CCAvenue: Gateway to growth 

Earlier this month, Infibeam entered into a pact to merge CCAvenue with itself in a deal that is expected to value the payment gateway firm at Rs 2,000 crore ($298 million then). The e-commerce company, which already owns 3.85% in Avenues India Pvt. Ltd-run CCAvenue through subsidiary NSI Infinium Global, will acquire another 7.5% stake in it by investing Rs 150 crore, according to stock exchange filings.

Experts feel CCAvenue will be heavily accretive to Infibeam, which also reflects in the company’s stock price rise and the subsequent hike in its market cap. On February 28, the company had a market capitalisation of Rs 7,419 crore compared with Rs 5,035 crore on November 16, 2016.

CCAvenue, one of the largest payment aggregators in India, provides a platform to over a lakh merchants to collect payments online. It also has tie-ups with close to 50 banks. CCAvenue also intends to engage with Bharat Bill Payment Systems (BBPS), which will let it offer payment facilities for utilities and other services in the Indian market.

Mayank Babla, research analyst at KRChoksey Shares and Securities Pvt. Ltd, says CCAvenue’s merger is expected to add incremental revenues of Rs 200 crore to the top line and Rs 40-50 crore to net profit following the amalgamation. In a research note earlier this month, Babla said he expected the CCAvenue merger to boost revenue growth, since the payment aggregator has grown at a CAGR of 45-50% per annum between FY14 and FY16.

“[The] merger with CCAvenue will not only add ‘transaction fees’ charged by payment aggregators for B2B and B2C services, but also the potential revenues from Bharat Bill Payment Systems or BBPS operations. We believe that launch of BBPS is a huge trigger for CCAvenue’ revenue growth as the government of India plans to shift 70% of Rs 6,22,300 crore in utilities payments to the online payment system,” Babla said, who has an ‘accumulate’ rating on the stock and a target price of Rs 1,461.

On Tuesday, Infibeam’s shares were trading at Rs 1398.95, down 0.16%, on the BSE in afternoon trade. The stock has more than tripled since its listing in April 2016. It had ended at Rs 445.55 on the listing day, up about 3% from the issue price of Rs 432.

Clients & collaborations 

Infibeam is fast acquiring clients both domestically and globally. In December, it agreed to provide online e-commerce platform services, including advanced machine-learning algorithms for enabling automated products classification, to Sears Holdings Management Corp, an American firm that owns retail store brands like Sears and Kmart, among others.

Infibeam will also provide the government of Sikkim a unique and verified digital identity platform with authorised and secured digital wallets for people. The company will also develop a dedicated tourism portal for the state.

The company has also entered into an MoU with IL&FS Township & Urban Assets Ltd for implementing projects in the digital and e-commerce space for the central government, state governments and private partners. It will set up a special purpose vehicle (SPV) in Gandhinagar to provide its technology and office premises for expanding and implementing digital projects.

The SPV will offer a revenue opportunity of Rs 1,250 crore over a period of five years, starting FY17, Infibeam’s founder and chief executive Vishal Mehta told News Corp VCCircle.

“We are getting into global markets, we have the appetite to work with the government and we have signed clients in the Middle East and the US. All this will show positive results from the next two quarters,” he added.

Service revenue, profits on upswing

Infibeam categorises income from the B2B business under service revenue, which is on an upswing. For the quarter ended December 2016, it grew 49% to Rs 40.2 crore, compared with Rs 27 crore a year ago.

“We are investing in last-mile logistics. There is demand for supply. Service revenues used to be 15% of the overall revenue earlier, but now they are 40%. It’s a high-EBITDA margin business. As our service revenues goes up, profit also goes up with it,” Mehta said.

For the third quarter of FY17, Infibeam’s total revenue grew 14% to Rs 102.7 crore, compared with Rs 90.1 crore in the same period a year ago. EBITDA grew 348% to Rs 21.2 crore, compared with Rs 4.7 crore a year ago while profit after tax rose a whopping 2,411% to Rs 12.8 crore compared to Rs 50 lakh in Q3FY16.

Revenue from the e-commerce vertical slipped 1% to Rs 62.5 crore during the quarter, and the company attributed it to the “withdrawal of cash on delivery services”, saying business has picked up since then.

Mehta said the growth witnessed in the service business segment will continue on the back of new alliances. “In e-commerce, there are three potential obstacles: building capacity, supply and demand, and we solve all of them. We are a one-stop solution provider in the e-commerce segment offering purchases to payments solutions under one roof, and that puts us in a strong position,” he said, referring to Infibeam’s unique business model.

Unlike other e-commerce firms that focus mainly on business-to-consumer (B2C) offerings, Infibeam is heavily focused on B2B. Apart from its flagship marketplace portal infibeam.com, the company has an enterprise platform called BuildaBazaar.com, which is growing sustainably quarter on quarter. BuildaBazaar.com provides small, medium and large merchants a commerce platform to help them start online stores under their own domain names. The cloud-based, do-it-yourself platform integrates operation support services like payment gateway, logistics, order management, marketing and search engine optimisation and catalogue management, among others.

Merchants, including SMEs and MSMEs, are increasingly going online and that’s helping the firm. The number of merchants on Infibeam’s BuildaBazaar platform rose to over 66,000 in the quarter ended December 2016, up 36% from the previous year.

Source: vccircle.com

Infibeam Incorporation Limited Reports Stellar Performance with Highest Ever Profits in Q3FY17

Ahmedabad 13th February, 2017: Infibeam Incorporation Limited (BSE: 539807; NSE: INFIBEAM), announced financial result for the third quarter of the financial year 2017. The company has reported highest ever profit in Q3 attributed by excellent growth of its Service business segment.

Financial Performance Highlights –

Total Revenue:

• Q3FY17 grew by 14% to Rs 1,027 Mn compared to Rs 901 Mn in Q3 FY16
• 9 Months FY17 grew by 23% to Rs 3,205 Mn compared to Rs 2,614 Mn in 9 Months FY16.

Service Revenue:

• Q3FY17 grew by 49% to Rs 402 Mn compared to Rs 270 Mn in Q3 FY16
• 9 Months FY17 grew by 40% to Rs 1060 Mn compared to Rs 755 Mn in 9 Months FY16.

Product Revenue:

• Q3FY17 down by 1% to Rs 625 Mn compared to Rs 631 Mn in Q3 FY16
• 9 Months FY17 grew by 15% to Rs 2,145 Mn compared to Rs 1,859 Mn in 9 Months FY16.

EBITDA:

• Q3FY17 grew by 348% to Rs 212 Mn compared to Rs 47 Mn in Q3FY16
• 9 Months FY17 grew by 205% to Rs 594 Mn compared to Rs 195 Mn in 9 Months FY’16.

PROFIT AFTER TAX:

• Q3FY17 grew by 2411% to Rs 128 Mn compared to Rs 5 Mn in Q3FY16
• 9 Months FY17 grew by 326% to Rs 307 Mn compared to Rs 72 Mn in 9 Months FY16.

Business Highlights for Quarter Ended December 31, 2016

Service Segment: Distributed E-Commerce Market Place, an E-commerceenabler Platform for Merchants.

The Company’s Distributed E-Commerce Market Place segment revenue growth has been significant and has grown by 49% to Rs 402 Mn in Q3FY17 compared to Q3FY16. The growth is attributed to strong demand for distributed market place platform & digital services from domestic and international market and other emerging markets. The number of merchants comprising of Enterprise, SME’s & MSME’s on BuildaBazaar platform has increased to 66,109 up by 36% compared to previous year.

Q3 FY’17 Service Segment Operational highlights

• Number of Merchants – 66,109 [ Y-o-Y 17,385: growth of 36% & Q-o-Q 4,861: growth of 8%]
• Service Revenue – Rs. 402 mn [ Y-o-Y Rs. 132 Mn: growth of 49% & Q-o-Q Rs 66 Mn: growth of 20%]
• % Service revenue growth compared to Q3FY16 [Y-o-Y growth of 49%]

Product Segment: Market Place, E-Retailing Platform
The Company’s E-Commerce Retail Segment growth is marked down by 1% to Rs. 625 Mn in Q3FY17 compared to Q3FY16. The impact of withdrawal of Cash on Delivery or CoD services led to this muted performance in Q3FY17 for most of the e-commerce retailers. Infibeam must be among the least affected company in the given scenario. The business has picked up since then and in Q4FY17, the company is expected to see normal performance in ecommerce retailing business. There has been a shift noticed in consumer’s behaviour as consumers have moved to cashless payment methods using the digital payment instruments. Infibeam’s e- commerce retailing grows steadily in B2C space with neutral performance. The bigger brands are reportedly growing with losses, however Infibeam is careful in not burning cash while focussing on value sales.
Q3 FY’17 Product Segment Operational highlights

• Number of Active users – 8.11 Mn [ Y-o-Y 0.31 Mn: growth of 4% & Q-o-Q 0.13 Mn: growth of -1.6 %]

• Product Revenue – Rs 625 Mn [ Y-o-Y Rs -6 Mn: growth of -1% & Q-o-Q Rs 186 Mn: growth of -23%]

• % growth compared to Q3 FY16 of - 1%

Consolidated Financial Highlights: Q3FY17 vs. Q3FY16

In Mn	Q3 FY17	Q2 FY17	Q-o-Q (%)	Q3 FY16	Y-o-Y (%)
Total Revenue	1,027	1,147	-10%	901	14%
Service Revenue	402	336	20%	270	49%
Product Revenue	625	811	-23%	631	-1%
EBITDA	212	213	-1%	47	348%
Margin (%)	21%	19%		5%
Profit Before Tax	153	136	12%	3	4676%
Margin (%)	15%	12%		0%
Profit After Tax	128	80	60%	5	2411%
Margin (%)	12%	7%		1%
Basic EPS	2.4	1.51	59%	0.12	1900%

New Business Development

Entered into Memorandum of Association (“MOU”) with Avenues (India)

Infibeam has entered into an MOU with Avenues India Private Limited (“CC Avenue”) for investment of Rs 150 Cr for acquisition of 7.5% equity shares of CC Avenue over and above the 3.85% of Equity Shares held by wholly owned subsidiary of Infibeam. Subsequently, amalgamation of CC Avenue into Infibeam by issuance of fresh shares subject to due diligence and regulatory approvals.

CC Avenue is the one of the largest, payment aggregator company, providing payment platform to more than 100,000 merchants helping them to collect online payments in e-tailingin India. Infibeam has more than 66,000 merchants at the end of Q3FY17, who are availinge-tailing solutions from the company. With payment platform of CC A, Infibeam is a uniqueone-stop- solution provider in the e-commerce segment providing Purchases to Payments solutions under one roof.

Infibeam caters to B2E, B2B and B2C segment of business for its customers. Integration of Payment platform with logistic & warehousing, ad and domain registry along with data centre and data analytics, the value added services provided by Infibeam makes a full circle in providing all services under one roof to the customers.

CC Avenue holds a pioneering set up with more than 15 years of experience in digital payments platforms. They offer multi-channel payment platform with tie ups with more than 48 banks for net banking with UPI [Unified Payment Interface], Debit & Credit card payments covering Masters, VISA and RuPay among others. CC Avenue will soon have Bharat Bill Payments Systems which will facilitate all bill payments for utilities and services among others.

The merger of CC Avenue into Infibeam will be highly cash and profit accretive business which will result in to a high growth opportunity under combined strength of more than a lac merchants. Further details will be worked out for creating operating synergising for domestic and international markets which will result in quantum growth in the business of Infibeam.

Signed Agreement with American Holding Company, Sears Holding Management Corporation (“SEARS”) to provide e-commerce platform services

As part of international expansion strategy, the company has executed an agreement with Sears

Holdings Management Corporation (“SEARS”), an American Holding Company and the owner of retail store brands like Sears and Kmart etc. Infibeam will provide e-commerceplatform services including advanced machine learning algorithms for enabling automated Products Classification at Sears Marketplace. The Company has started working on the platform and believes that it will contribute to the overall revenue significantly in subsequent quarters. Sears is a leading integrated retailer focussed on seamlessly connecting digital and physical shopping experience.

Infibeam to establish Unique & Verified Digital Identity Platform on the .000 Domain for Sikkim State

Infibeam Incorporation Limited has received confirmation from the Government of Sikkim to provide a "Unique & Verified Digital Identity Platform" ("Digital Services") on .000 global top level domain (gTLD) with authorized and secured digital wallets for Indians residing in the State of Sikkim. As a part of this program, Infibeam to provide a platform for creation of digital web identity for citizens residing in the State of Sikkim ("Users") to enable access and digital storage of their own citizen centric records. Furthermore, Users will also get benefited by way of getting a free email address for their primary use, free personal web store for commerce and revenue generation opportunity, free 10 GB cloud storage, as well as integrated Digital wallet. Infibeam will also develop dedicated tourism portal for tourists visiting the State of Sikkim from all over the world.

Infibeam signed MoU with IL&FS for implementing digital projects

Infibeam Incorporation Limited has entered into a MoU with IL&FS Township &Urban Assets Limited ("ITUAL") for undertaking and implementing projects in digital space and e- commerce for Central Government, various State Governments and Private Partners. Infibeam shall set up a Special Purpose Vehicle ("SPV") which will be located at GIFT Two Building, GIFT City, Gandhinagar wherein Infibeam will provide its state-of-the-arttechnology and office premises for expanding and implementing digital projects that would be implemented by SPV. The said SPV will target indicative achievable revenue opportunity of INR 1,250 Crores over a period of 5 (Five) years starting from FY17

Issuance of Fully Convertible Warrant into Equity Shares

The Board of Directors in their meeting held on January 24, 2017 approved issue of one warrant fully convertible into equity shares for an aggregate amount not exceeding Rs. 60 crores ( Rs. sixty crores) to a body corporate other than the Promoters and Promoter Group i.e. Bennett Coleman and Company Limited ("BCCL"), on preferential issue basis at a conversion price of Rs.1,375/- per Equity Share (including premium) or at a price determined in accordance with the SEBI (ICDR) Regulations, whichever is higher as per Chapter VII of SEBI (ICDR) Regulations, 2009 as amended. The Company would hold its Extra Ordinary General Meeting on shareholders on February 22, 2017 for approving the same

As on 13th February, 2017 the stock price of the company is Rs 1369.40 and the market capitalization of Rs 7312.33 cr.

Drama Teen- Parents’ Walk Through the Contours of Teenage!

“Impossible to understand. This is the best way to describe this generation.”- Parents.

“They don’t understand me at all.” - Teenagers.

More often than not, this is the skit that goes on loop, in the houses where the “Ghar ke Chirags” are teenaged kids. Ms. Lina with her new book- “Drama Teen” bridges this gap presenting the story from both the perspectives.

“I dream of a society in which every child enjoys the right to a joyful childhood and top quality education.” - Ms. Lina Ashar.

Lina Ashar

As a teacher, realizing the voids in the education system, Lina took it up as a challenge. Engaging children with imaginative and fun-filled teaching was her idea. This idea was certainly a radical thought, and one very new in the India of 90s. Well, who knew this idea will go on to paint the best picture of reality. Along with being a busy educationist, she has also been a successful author who has sought to guide the parents and teenagers time and again. The journey of the author Lina Ashar continues with her new book - “Drama Teen”. Here is an excerpt from the delightful conversation, I had with her:

1. Can you tell us something about your book - “Drama Teen”. How is it different from a normal parenting guide?

Lina Ashar - Most books address only one audience, the unique thing about this book is the format. For each topic I write to the parent and then the teen - giving them a chance to step into each other’s shoes and therefore bridge the generation gap. The process was initiated while I was counseling students to understand their own values and their parent’s values and negotiate their needs from that position. I got a lot of positive response from the students that it worked and helped them get what they want - but not at the cost of their relationship with their parents.

2. School and Curriculum plays a vital role in steering a teenager in right direction. What are your views regarding the system and curriculum in India? According to you, how the education sector of India needs to improve?

Lina Ashar - ‘I was born intelligent. The education system ruined me’ – Mark Twain’s famous quote is true for many educational systems around the world. Kids enter schools as curious and inquisitive creatures and leave the portals as unthinking, uncreative, and undemanding people. We teach children subjects in a lack lustre manner and in most cases they cannot join the dots, this makes them dislike going to school.

The 21st century skills that children need to encompass is collaboration, critical thinking, problem solving and high level of accountability and display of ethical behaviour. We have to a great extent focus on integrated projects revolving around global themes.

3. Most of the engineering students think they did a mistake by joining engineering. Can this problem’s roots be found in teenage? When it comes to career-guidance, how should teachers and parents play their role?

Lina Ashar - Schools and Parents need to first recognize that there are careers and jobs beyond engineering and medicine. Studies have shown that Right Brain jobs that will be in demand in the coming years. A lot of these jobs don’t even exist today. We need to train children to survive in life and train them to build right habits of mind.   

The top paying jobs today didn’t even exist 10 years back.

4. How do you explain pros and cons of excess of things like peer-pressure, social media, and rebellious attitude to a teenager? What is your advice to teenagers based on current times?

Lina Ashar - I always urge the teens that - when they really want to acquire a material possession, they need to find ways of earning the money. Build within themselves a spirit of enterprise. Mowing lawns, and delivering newspapers and milk seem to be a thing of the past, but find ways to do chores over and above the normal household duties for a financial reward.

Our education system is already set up to provide the hard skills, they need to go through life. However, they also need values such as self-esteem and confidence. Necessity is the mother of invention, so they have to think about ways in which they can invent.

5. Impact of Movies on our society is well known. And, teenagers can get very easily

intimidated by movies. What is your view regarding it? What is the way out from the p.o.v of students as well as parents?

Lina Ashar - Often movies unknowingly impact children in a sub conscious manner. They propagate violence, eve teasing, sexual vulgarity etc. The best way to combat this is enforce positivity in children, every time a parent notices such messages being given out, the parent should discuss with the child, this is what the hero should have done, violence has repercussions etc...

This will help make the child aware of the subtle messages and build a positive image.

6. Being an educationist, you have been around these things for major part of your life. What are some lessons that you have learnt from teenagers?

Lina Ashar - Reward and risk often go hand in hand.

Unconditional love is a must.

Practice what you preach - or walk the talk

7. If you think about adding one more dimension or one more chapter to your book- Drama Teen, what will it be about?

One of the aspects that I would have loved to add is the Importance of the stories that we hear, In fact this is now going to be my third book. Stories we hear form the basis of our subconscious programs, therefore beliefs, actions and decisions. Brain chatter or stories we tell ourselves form the basis of the outcome of our lives.

The Third one sounds interesting already!