Why Infibeam Avenue Share Price is Rising

The fintech sector in India is experiencing robust growth, driven by increasing digital adoption, government initiatives, and a burgeoning middle class.

As one of the world's fastest-growing economies, India presents vast opportunities for fintech companies to innovate and expand their services. Infibeam Avenue is a prominent player in this dynamic sector.

Established in 2007, the company specialises in providing end-to-end e-commerce solutions, including payment processing, digital store setups, and marketplace integration.

The company leverages cutting-edge technology to offer scalable and secure solutions to businesses of all sizes.

Lately, the company became an investor favourite as it rallied 124.8% over the past year. However, the past six months saw some challenges as its share price tumbled 10.9%.

Despite this, Infibeam Avenue has shown resilience, surging 8.7% in the past month and rising 4.4% in the past five days. Let's explore the factors contributing to this recent uptick.

#1 New Acquisition

Gujarat-based fintech company Infibeam Avenues approved to acquire a 54% stake in Rediff, one of India's oldest internet firms.

In a recent announcement the company stated that it invested around Rs 0.5 billion (bn) in Rediff. This investment is divided equally between equity and debt. As a result of this investment, Infibeam will obtain a 54% shareholding in Rediff.

The company aims to finalise this deal within 90 days. Infibeam plans to create a unified ecosystem through this acquisition. This ecosystem will cover payments, ecommerce, cloud services, and content consumption.

Infibeam also intends to use the RediffMoney platform to offer additional services. These services include credit, insurance, and investment products. Rediff currently attracts around 38 million (m) online visitors each month.

This acquisition has boosted Infibeam's share price. The investment in Rediff is seen as a strategic move. It will help Infibeam expand its services and reach a larger audience. This positive outlook has increased investor confidence.

#2 Strong Quarterly Results

On a standalone basis, the company reported a net profit of Rs 3.6 bn. This represents an increase of 31% from Rs 2.8 bn a year earlier.

The operational revenue stood at Rs 6.8 bn, almost the same as the previous year. Breaking it down by business segments, the payments business generated a gross revenue of Rs 6.4 bn. The remaining revenue came from ecommerce operations.

In the payments business, net revenue after deducting payment processing charges was Rs 1.2 bn. This marks a 20% increase from Rs 1 bn in the previous year. This growth in net revenue demonstrates the company's efficiency in managing its payment processing costs.

The company's total payment value saw a substantial jump. It increased to Rs 196.8 bn from Rs 118.3 bn a year earlier. This surge indicates a significant increase in the volume of transactions processed by the company.

The fintech firm also reported an improvement in its take rate. This is the share it earns from each transaction it processes. The take rate increased to 11.2 basis points from around 8.4 basis points a year earlier. This improvement is attributed to better operational metrics, showing the company's enhanced efficiency and profitability per transaction.

Additionally, the company has expanded its merchant base. It now has more than 10 m merchants using its solutions.

The company is also adding more than 2,500 merchants daily. This rapid growth in the number of merchants reflects the increasing adoption and trust in the company's services.

#3 Change in Leadership

The company recently announced that it has Narayanan Sadanandan as an independent director on the board.

The company stated that he brings extensive experience in finance and banking. His expertise is expected to guide the company's strategic direction effectively. The addition of Sadanandan strengthens the company's governance.

Stakeholders expect his insights to lead to better financial management and strategic decisions. This anticipation has already created a positive buzz in the market.

What Next?

The company is focused on several future growth strategies and current initiatives to drive progress. Leveraging the recently acquired Rediff.com, the company aims to synergise various digital payment services. This includes platform business offerings and AI solutions.

Additionally, the company plans to continue expanding in digital media technology. Live events and AI-enabled fraud detection within the fintech sector are also areas of focus. These efforts underline the company's commitment to innovation and market expansion.

The company's strategy includes developing new digital media technologies. This will involve creating advanced platforms for live events and streaming services.

AI-enabled fraud detection will enhance security and user trust. By focusing on these areas, the company aims to stay ahead in the fintech sector. Innovation and technological advancement are at the core of its future plans.

Future growth targets include expanding user engagement and increasing revenue streams. As it integrates new technologies and services, the company expects to achieve significant milestones.

These strategic moves are designed to ensure the company remains a leader in the digital payment and fintech sectors.

How Infibeam Avenue Share Price has Performed Recently

In the past five days, Infibeam Avenue share price has rallied 4.5%. In the last month, it is up 8.8%.

In 2024, so far its share price has surged 47.2% and it has rallied 124.5% in the last one year.

The stock touched its 52-week high of Rs 42.5 on 11 March 2024 and a 52-week low of Rs 13.7 on 18 August 2023.

About Infibeam Avenue

Incorporated in 2017, Infibeam Avenues is in the business of software development services, maintenance, web development, payment gateway services, ecommerce, and other ancillary services.

The company's main aim at present is to emerge as a key player in the AI-based fraud detection and prevention market.

It has made an investment of more than Rs 1 bn by creating a new AI Hub, as an extension to its GIFT city hub.

To know more, check out Infibeam Avenues financial factsheet and its latest quarterly results.

To know what's moving the Indian stock markets today, check out the most recent share market updates here.

Happy Investing.

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...