Share price of Info Edge, the owner of Naukri.com, rallied as much as 6 percent in morning on Tuesday after the company through special purpose vehicle picked up 9 percent stake in Etechaces that owns PolicyBazaar and PaisaBazzar.
Diphda Internet Services, a newly incorporated wholly owned subsidiary of the company, purchased 8.93 percent stake in Etechaces Marketing & Consulting Pvt Ltd (Etechaces) by investing $90 million. The stake, which picked up, is on a fully diluted basis post completion of fund raise exercise with other investors.
The owner of Jeevansathi.com informed exchanges that Soft Bank has agreed to invest an amount equivalent to about $45 million for 49.99 percent stake (on a fully diluted basis) in Diphda Internet Services for the time being.
Whereby the company has also agreed to invest an amount equivalent to about $45 million in Diphda for 50.01 percent stake (on a fully diluted basis), it said.
For 49.99 percent stake in Diphda, Info Edge has entered into an agreement with SVF India Holdings (Cayman), a wholly owned subsidiary of SoftBank Vision Fund LP, of which SoftBank Group Corp is a limited partner.
“As part of company’s strategic investments, the acquisition would help the company to consolidate its presence into the business of Insurance & financial products aggregator within the internet services industry,” the Naukri.com owner said.
Etechaces is a fintech and marketing company which works extensively in the financial sector (insurance and non-insurance) and offers an online marketplace for insurance products under the name & style of policybazaar.com and for other financial products like loans and credit cards under the name & style of paisabazaar.com.
In the financial year ended March 2018, Etechaces recorded consolidated (unaudited) net sales of Rs 333.94 crore.
While maintaining Overweight call on Info Edge with a target price at Rs 1,900 per share (implying 61.6 percent potential upside), Morgan Stanley said the announcement of investment in Etechaces, which owns Policybazaar and Paisabazaar, is significant and that signified company’s appetite to go for larger deals.
Post this fund raising, the implied valuation of Etechaces would be over $1 billion and value assigned to Info Edge’s stake increased to Rs 63 per share from Rs 26, it added.
At 09:25 hours IST, the stock price was quoting at Rs 1,243.10, up Rs 67.50, or 5.74 percent on the BSE.