Mumbai: Owned by Prosus payu Has withdrew from a 13-month-old deal to acquire billdesk What will be the largest cash purchase in the payments sector for $4.7 billion. The withdrawal comes at a time when many startups trade at a discount to the valuations they receive in the private equity markets.
The deal, which has been hanging for nearly a year due to lack of approval from the Competition Commission, got the watchdog’s nod just before the long stop date of September 30 last month.
“The closure of the transaction was subject to the fulfillment of various conditions, including approval by the Competition Commission of India. PayU obtained CCI approval on 5 September 2022. However, by the long stop date of 30 September some of the preceding conditions were not fulfilled, and the Agreement is automatically terminated in accordance with its terms and accordingly, the proposed transaction will not be enforced. process said in a statement.
Although the reason for PayU’s withdrawal was not known, some analysts drew parallels with Elon Musk’s decision to back down from his decision to invest in Twitter. Some saw it as a buyer’s remorse following a fall in valuation in a business that was subject to regulation by the Reserve Bank of India. Two decades old BillDesk is unlike other start-ups and is profitable and not a retail customer facing business. While RBI regulations favor innovation and digital payments, the central bank has made it clear that businesses such as digital loans can only be undertaken by registered lenders.
The cancellation of the deal is bad news for BillDesk and its promoters, who received $1.4 billion from the deal. This is bad for the payments industry, which has attracted global attention. Finally, the deal saw a huge inflow of dollars for the three Indian founders – MN Srinivasu, Ajay Kaushal and Karthik Ganapathy.
Prosus stated that it has been a long-term investor and operator in India, investing approximately $6 billion in Indian technology companies since 2005, Prosus is committed to the Indian market and growing its existing business within the region. . Statement.
The deal, which has been hanging for nearly a year due to lack of approval from the Competition Commission, got the watchdog’s nod just before the long stop date of September 30 last month.
“The closure of the transaction was subject to the fulfillment of various conditions, including approval by the Competition Commission of India. PayU obtained CCI approval on 5 September 2022. However, by the long stop date of 30 September some of the preceding conditions were not fulfilled, and the Agreement is automatically terminated in accordance with its terms and accordingly, the proposed transaction will not be enforced. process said in a statement.
Although the reason for PayU’s withdrawal was not known, some analysts drew parallels with Elon Musk’s decision to back down from his decision to invest in Twitter. Some saw it as a buyer’s remorse following a fall in valuation in a business that was subject to regulation by the Reserve Bank of India. Two decades old BillDesk is unlike other start-ups and is profitable and not a retail customer facing business. While RBI regulations favor innovation and digital payments, the central bank has made it clear that businesses such as digital loans can only be undertaken by registered lenders.
The cancellation of the deal is bad news for BillDesk and its promoters, who received $1.4 billion from the deal. This is bad for the payments industry, which has attracted global attention. Finally, the deal saw a huge inflow of dollars for the three Indian founders – MN Srinivasu, Ajay Kaushal and Karthik Ganapathy.
Prosus stated that it has been a long-term investor and operator in India, investing approximately $6 billion in Indian technology companies since 2005, Prosus is committed to the Indian market and growing its existing business within the region. . Statement.